Topic: The Economy is Going to Implode

[Libertas]

Easy peasy...

http://www.zerohedge.com/news/2014-08-26/it-begins-council-foreign-relations-proposes-central-banks-should-hand-consumers-cas

WTF do I care?  Do it!

[Weisshaupt]

Send in the Helicopters!

A second factor explaining the persistence of the old way of doing business involves central banks’ balance sheets. Conventional accounting treats money — bank notes and reserves — as a liability. So if one of these banks were to issue cash transfers in excess of its assets, it could technically have a negative net worth. Yet it makes no sense to worry about the solvency of central banks: after all, they can always print  more money.....

Those who don’t like the idea of cash giveaways, however, should imagine that poor households received an unanticipated inheritance or tax rebate. An inheritance is a wealth transfer that has not been earned by the recipient, and its timing and amount lie outside the beneficiary’s control. Although the gift may come from a family member, in financial terms, it’s the same as a direct money transfer from the government. Poor people, of course, rarely have rich relatives and so rarely get inheritances — but under the plan being proposed here, they would, every time it looked as though their country was at risk of entering a recession.

You see its an inheritance-- passed from your unborn children to you, today! 
After all we can always print more money!
The economic ignorance here is just staggering.
There will always be more money.. that is what "more" means... ( I know I have heard that quote somewhere in a film- if anyone knows which one - enlighten me!)

you see its okay to debase the money ( by borrowing it no less!)
-- with fewer people laboring as the boomers retire, robots replace people, and  and the free money being dropped from helicopters  makes work something only suckers engage in... less value is created, and the the value per dollar decreases.

Oh wait.  A bit of savings and decreased demand from boomers isn't going to offset that is it?

But there you have it.. the first call to actually drop money from Helicopters because it won't cause inflation..
Oddly , I bet if I suggested that we use this same method to pay everyone's taxes this asshat would object...I wonder why..

[Pandora]

An inheritance is a wealth transfer that has not been earned by the recipient, and its timing and amount lie outside the beneficiary’s control. Although the gift may come from a family member, in financial terms, it’s the same as a direct money transfer from the government.

NO, it is not the same.  Good grief!

Conventional accounting treats money — bank notes and reserves — as a liability.

And this is why so many people do not understand the "modern" economy because it turns everything people think they know about money on its head because it's not money, it's "money".

[Weisshaupt]

An inheritance is a wealth transfer that has not been earned by the recipient, and its timing and amount lie outside the beneficiary’s control. Although the gift may come from a family member, in financial terms, it’s the same as a direct money transfer from the government.

NO, it is not the same.  Good grief!

No, its exactly the same - except your family member worked his entire life to accumulate that money, paying taxes all of the while and another chunk to the government before you get it, and the government just had an employee type some zeros into a computer.  EXACTLY the SAME.

[Weisshaupt]

Good news!
hyperinflation in the US is impossible!

    Similarities [with Weimar]? What Similarities

        Germany lost World War I
        The Treaty of Versailles imposed repayment conditions on Germany that could not be met
        To enforce the treaty, France occupied parts of Germany
        Germany printed money so fast people burnt stacks of money for heat


    What part of that remotely resembles anything that is happening in the US today?

Um, the part where the economy is tanked, recovery can't occur for political reasons, and the government is printing money as a way of kicking the can?

    Summers notes that China, Russia, Brazil, India, and now South Africa are moving to trade more in their own currencies (not the US Dollar), saying "All of these items are real and documented."

    Yes they are real. They are also essentially meaningless. It makes perfect sense for countries that trade with each other to do so in their respective currencies. Even though oil is priced in dollars, oil trades in Euros right now. Oil trades in Yen now. Currencies are fungible. So if a few minor countries want to trade in Yuan now, it will not matter one iota in the grand scheme of things.

Yeah, a "few, minor countries" which make up the same percentage of the Wolrd GDP as the United States does. And you know, the US having the reserve currency DOESN'T MATTER in the grand scheme of things, because, you know, currencies are fungible.

 The problem is Oil is priced in Dollars which , however briefly exist when the customer converts his Yen to dollars to buy the oil..  The dollar is the middle man currency between a lot of countries and this causes dollar demand.  If that demand lessens, a lot of dollars return to America. But you don't want to address that do you? Just like you don't want to address what happens when a LOT of countries start using BRICS currency instead of US Dollars for the same operation.  When they keep BRICS debt in their vaults instead of US Debt because they now have a trade imbalance with the BRICS nations INSTEAD of the US. That won't matter at all, right?

    Inquiring minds are looking at the May 13, CPI Release from the BLS.

    The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in April on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.2 percent before seasonal adjustment.

Yeah, because no one uses food or fuel.

    Mish Response: Once again we see the silly statements regarding the pricing of oil in Euros or some other currency from someone who does not understand that currencies are fungible.

    It does not matter one iota what oil is priced in unless one tried to do it in Yap Island stones or some other highly illiquid currency. Oil already trades in Euros and Yen just as gold does. One does not need dollars to buy oil any more than one needs dollars to buy gold.

Because, you know, someone else might have already supplied the dollars and is now willing to sell it to you in some other currency.  And why are Yap Island Stones highly illiquid? Is it because they are seen as worthless in most circles? They couldn't happen to the dollar why?

    Myopia

    Hyperinflationists have myopia. They only see (or only focus on) problems in the US. They ignore overheating in China, enormous problems in the UK, and huge structural issues in the EU.

    The US may have more problems than elsewhere (or not), but that does not imply the dollar might collapse to zero against the currencies of other countries.

    Intermediate-term, I actually expect the dollar to rise, but should it sink, it will not be a sign of impending hyperinflation.

But

    Massive Inflation in China

    Those looking for a huge inflation problem can find it in China. Credit growth in China is rampant. Please consider Ponzi Financing Involving Copper Trade Gone Wild In China

    China is building cities no one lives in, malls that are vacant, trains and airports no one uses yet Williams thinks the Yuan is better than the dollar. Why? For that matter why is the Euro or the British Pound?

    The entire global banking system is insolvent.

So hyperinflation can't happen in the US, but its is happening in China and the entire world  banking system is f**ked.  But you see, the US dollar sucks the least so everything is fine.. till someone else sucks the least, right?

    For all the massive amount of printing the Fed has done, note that total credit market is roughly 27 times the size of M1 and roughly 6 times the size of M2 (not shown).

    Can that credit be paid back? The answer is no and it will act as an economic drag for a long time.

    So another trillion in printing is going to cause hyperinflation? When the total credit market is $50 trillion? Please be serious.

Of course they don't even publish M3 anymore because the number is so bad, .
But hey whats another trillion in a market of 50 trillion?  2%  why do you ask? And two percent - andthe next year, and the next and the next.
Did they cover exponential growth in any of your classes in college? But right - they could print 50 Trillion and no one would notice because the credit markets wouldn't loan it out. Unless they did - because they now have enough to look solvent AND loan money out.

    Many of the socialist-Marxist regimes were Latin American populist governments who employed “revolutionary” anti-capitalist nostrums for economic policy. Chile (Allende) and Argentina are good examples. Argentina has had years of high inflation to hyperinflation since 1980. In Africa most countries were a mixture of strongmen with socialist-Marxist policies. I am not suggesting that these were pure socialist governments, but rather the typical situation where the government seizes or controls large parts of industry and issues regulations controlling much economic activity.

    These hyperinflations all had one common denominator: during a period of instability, spending was used as a political tool and it got out of hand. I understand that the circumstances of each country were different and that it is perhaps unfair to say, lump Israel in with Argentina. But each country faced political factors that created instability or a national crisis; the government spent heavily to gain popular support, and resorted to the printing presses to pay for their spending

Right, because there is no banking crisis or big socialist big changes happening in America right now forcing spending as a political tool.  NO Sir.
No massive health care systems, stimulus package giveaways or anything like that.

What a moron.

[Pandora]

Speaking of "because no one uses food or fuel", 93% lean ground beef cost me $5.55 lb. yesterday.

Yup, everything comin' up roses.

[Libertas]

We're going to make Zimbabwe look like a bunch of idiot babies in comparison...

Beyond epic...

Biblical.

[Libertas]

The Fed just lied its ass off!

http://www.zerohedge.com/news/2014-09-08/how-fed-mysteriously-eliminated-7-trillion-us-debt

Any mistake is purely intentional...

The real march into oblivion continues unabated...

http://www.usdebtclock.org/

I'll take $116T in unfunded liabilities going "POOF!" for $500, Alex!

[Libertas]

I don't think Neo-Keynesian's think this way...they may parrot some of the words...but actions speak louder...

http://www.zerohedge.com/news/2014-09-08/ten-reasons-condemn-inflation





ETA -

This is hilarious!

http://www.bloomberg.com/news/2014-09-09/treasuries-decline-as-three-year-yield-tops-1-before-auction.html

Fed will raise rates!     BlackRock is merely being the messenger of disinformation for market manipulation purposes!



And this little gem...

http://www.bloombergview.com/articles/2014-09-09/the-reasons-bankers-weren-t-busted

...tell me the Cabal doesn't exist!  Not everybody in the industry is a crook, but the ones with the power...many are corrupted by the system...

[Libertas]

Eh, so what!  what difference does it make?

http://www.zerohedge.com/news/2014-09-16/us-national-debt-has-grown-more-trillion-dollars-last-12-months

With the wave of a hand it could all be erased from existence...so could a lot of people, but hey, no pain no gain...


And hey, enhancement is all the rage today...now we have "credit enhancement"!     We're saved!  Happy Days are here again!

Everything is Awesome!

http://www.zerohedge.com/news/2014-09-16/subprime-back-vengeance

...until the slightest little hiccup, then, ka-blew-eeeeeee, it all implodes!

...and the jackasses didn't even see it coming...again!

 

This is going to end so orderly and politely...

/

[Libertas]

"Satan Signal"?

http://www.zerohedge.com/news/2014-10-09/did-todays-satan-signal-sp-futures-give-all-clear-selling-begin

 

As good as a label as any for puppetmaster shennanigans!

Mention anything smacking of religion though and the ZHer's go apesheeet!  Browse the comments at your own peril!

[warpmine]

Is there another way to view that page...I mean the format is horrible. Going from three inches down to about 1/4 inch is beyond a PIA

[Libertas]

President Obola is winning on all fronts...from a sick, twisted evil "progressive" point of view...

US slips to 12th in "Economic Freedom"

Way to go Prog's!

/

Wait, given these 5 categories...

1. Size of government

2. Legal structure and security of property rights

3. Access to sound money

4. Freedom to trade internationally

5. Regulation of Credit, Labor and Business.

...how can we be that high?

No 1 - I mean, who has more government than us in terms of budget?  Nobody.

No 2 - Legal/property rights?  Seriously?  We are letting statists grab whatever the frack they want to take from us and I am pretty sure we can compete with even the most fascist and totalitarian regimes on the planet for that dubious distiction, and I would argue in monetary terms we have to be up there is not tops...the openly fascist/totalitarian regimes might skew up via current value of nationalized/socialized industries, but on an acquistition basis from individuals we have to be more obscene that a nominally free nation should be!

( Link H/T to Glock32 - X-ref post - http://itsaboutliberty.com/index.php?topic=12179.0 )

No 3 - Access to sound money.        Yeah, OK!

We get that one as default reserve currency...for now...in truth there isn't a fiat on the planet that is going to be worth a damn at some point, so this category should be eliminated!

No 4 - Freedom to trade internationally, provided you greased the right wheels, kissed the right asses and don't have a government or a NGO frick with your stuff.  Almost like #3, let's see what real trade looks like with in-kind exchanges, m'kay?!

No 5 - Seriously, we can compete with anybody on this one!  Outside of maybe China (who has the sheer number of people) we can suck with the rest of them on this one!

12th?

Man, that is charitable!

From the article -

The 10 freest economies in the world are: Hong Kong, Singapore, New Zealand, Switzerland, Mauritius, United Arab Emirates, Canada, Australia, Jordan, and Chile and Finland tied for 10th.

Well, Honk Kong, heh...after they've been pacified the ChiCom way, let's see...

See anywhere worth relocating too?  I sure don't!  (No offense to Canada!  Y'all going the right direction...better direction than us!)

[Libertas]

Small business in America continues to suck...and from my perspective as a moonlighting small business accountant I see nothing to change that view...

http://www.zerohedge.com/news/2014-10-14/small-business-optimism-slides-hiring-capex-plans-collapse

I guess I find it tragically hilarious why anybody under these conditions and under the Obola Regime could possibly expect small business to grow let alone survive...

[Libertas]

OK, time for another update here...it seems there is just a whole lot going on...oil markets in meltdown, treasury yields collapsing, Greece on the verge of collpase, Ebola, stagnat economies, currency implosions...yup, it must be October and a psuedo-election year in Amurikah...

And lest we lose sight of all the gains, er losses for us sane folks, that we've come to know and loath...a refresher for where we are -

http://www.zerohedge.com/news/2014-10-14/12-charts-show-permanent-damage-has-been-done-us-economy

Yeah.  Everything is Awesome!  How can it be anything else?

[Libertas]

Volatility...there isn't anything but...

http://www.zerohedge.com/news/2014-10-15/9-ominous-signals-coming-financial-markets-we-have-not-seen-years

...but whatever, today, tomorrow...crap can and will hit the fan...

...keep a weather eye out...

[Libertas]

Print/Monetize...QE 4-ever!!!   

SSDD...

http://finance.yahoo.com/news/fed-official-wants-keep-qe-170830150.html?l=1

Go ahead, peddle to the metal!!!  What's the worst that could happen?! 

 

[Weisshaupt]

If they get this epidemic going its the Black Swan for the economy.  QE won't matter because the velocity of money is going to fall to zero.
Grocery stores won't be getting deliveries, because quarantine zones will prohibit them. Shelves will be bare - Seriously if you don't have at least 6 months worth of food RIGHT NOW, you better get it.  Even if the government is just incompetent and isn't deliberately trying to kill us, you will need to hunker down for MONTHs if this thing gets going.

No one will be going to work. No one will be going to malls or to movies or to stores. If anyone thinks the economy can survive that in the condition its in, they got another think coming.

[Libertas]

If they get this epidemic going its the Black Swan for the economy.  QE won't matter because the velocity of money is going to fall to zero.
Grocery stores won't be getting deliveries, because quarantine zones will prohibit them. Shelves will be bare - Seriously if you don't have at least 6 months worth of food RIGHT NOW, you better get it.  Even if the government is just incompetent and isn't deliberately trying to kill us, you will need to hunker down for MONTHs if this thing gets going.

No one will be going to work. No one will be going to malls or to movies or to stores. If anyone thinks the economy can survive that in the condition its in, they got another think coming.

Yeah, so far they are doing everything to ensure this things has the best chance to spread, and it sneaks up on most because most people in this country have an IQ below room temperature and what looks like simple incompetence flies low under the radar of morons...by the time people realize the stuff is out of control life as we know it will cease entirely.

But hey, the the Feds are cheering because more paper is being bought, the ChiCom's love us once again!  So all is well, eh?

Well, maybe not everything...

What will send us reeling first?  Ebola or economic collapse or fiscal implosion?  Maybe all three simultaneously?

Frankly, it doesn't matter...prepare for the worst (as best you can) and hope for the best (good luck!) and we'll see what we will see.

[Libertas]

Once again, on Economic/Finance matters, Doc Engali nails the Fed strategy again - "I disagree, I think they know exactly what they are doing and the key word in your statement is "acting". Look at what they have accomplished , The cost of borrowing to .gov is virtually nothing, they've shaken out a lot of speculative positions by jawboning, and they drive the "market "higher by luring in shorts with their "skitzo acting". The merits of the fed are another discussion, but to me it's clear they know exactly what they need to do to advance their,an their owners, agenda."

Boom, nails it.  The psychology of the markets is the psychology of the people in the market, the Fed doesn't have to act, it just has to talk about acting and do nothing, it's a bad cop/good cop (well, OK, less bad cop really)/crazy cop/bored cop routine and they only have to act when all the tricks stop working, and then they usually ramp up the QE again...and until it all goes sideways this is not going to change, they will not change...

ETA - A prime example:



http://www.zerohedge.com/news/2014-10-20/feds-comfort-zone-1-simple-chart

Hilarious.

And for those thinking it's always going to be nothing but unicorns with skittles dropping out their butts, think again!

There's so many horses in the race to the end I can scarcely pick a winner.

Well, prepare accordingly, and wait.