Topics > Economy
The Economy is Going to Implode
AmericanPatriot:
Ann in 8 parts
http://youtu.be/7dFVFJ0iRRA
Libertas:
OK, I'm finished with all these, ufda, what a ride!
Encourage all to watch, for those who haven't the time here is my summary -
Pt1-Mostly into stuff, what money is, what "fiat" means and what real custody of wealth is. (Hint - it is not ones & zeros or any other easily devalued/taxed/destroyed medium)
Pt2-More on the preceding these, nice dig at Ron Paul & Paulbots - "Gold standard is still fiat", pop go the heads!
Pt3-Dude comes into the bank to get a loan wearing a t-shirt that says "What are you looking at dickface?", pretty much sums up who banks are forced to lend to by government force. Doesn't matter where you bank at, the risk is systemic and pervasive, when runs hit nobody will have anything.
Pt4-Debt & GDP: "Economic treason", criminal meet wall and firing squad. Massive deleveraging is coming in one form or another.
Pt5-Deleveraging/ZIPR conundrum, the Cloward-Piven uptick timebomb-either ZIRP forever (good luck with that) or deleveraging and GDP crushing rate increases. The criminal wealth transfer of ZIRP by "oligarch class" can only be defeated by default, secession or war (and any combination thereof), US is likely balkanization candidate.
Pt5 to Pt6-JPMorgan/GoldmanSachs CDS insurance scheme - Sell CDS to Bank A for 1% premium. If default JPM/GS gets bonds (salvage value), the SWAP (proxy put option).
JPM/GS protection racket-Bribes ISDA to never declare bond defaults, thus ensuring the premium whores keep the scheme going. The forced government/bank extortion of the taxpayer is perpetuated by bank agents going to Central Banks to urge bailouts and stop defaults. Doesn't buy into Paulbot "Rothschild" style conspiracy theories, sees them as a distraction from what is really going on.
REPOs-MF Global (psycho criminal Corzine)-Buy Nation A's national debt @ discount via 3rd party nation (everybody owns everybody's sh*t paper) so nation A can have fast cash and avoid bank runs, nation A agrees to buy back paper at full price (with newly printed fiat of course), so MFG gets juice on both ends. Same applies for reverse REPOs. MFG went apesh*t with reverse REPOs (GAAP allows them to be carried "off balance sheet", legalized fraud) and when collateral calls hit (like margin calls) time to pony up, but alas, no cash! Corzine used customer account cash to payoff and this rat bastard roams the streets a free man when he should be convicted and shot at sunrise. Corzine then goes to Fed discount window for ZIRP (0% cash) and uses it to buy more REPOs. MFG gets CDS via JPM/GS making 2-4% spread. (ZIRP: 90 day UST Bill was 5.11% 1/07, is 0.03% 1/12)
Pt7-CDS market:
JPM $1.8T assets with $78T CDS = 43x's leverage (at $15.5T GDP, leverage is 5x's GDP!)
Citi $1.2T assets & $56T CDS = 47x's leverage (3.6x's GDP)
BoA $1.5T assets & $53T CDS = 35x's leverage (3.4x's GDP)
GS=US Govt (Fed/Treas Agent) $89B assets & $48T CDS = 545x's leverage (3.1x's GDP)
Top 25 US $8.3T assets & $249T CDS = 30x's leverage (a6x's GDP)
Global CDS market = $1.5 quadrillion!
Not enough "haircuts" possible to reduce this much risk!
Where is the wealth?
*HFT (High Freq Trades aka Algo's) do 70% of all transactions & 99.9% of quotes (NANEX), they can go in & out in milliseconds (when we see flash crashes etc w/little or no volume it is the bots at work). Can you survive in this environment? EXIT NOW!
*Liquidity is dependent upon Algo's!
*Market breaks - A Balck Swan shocks result in Algo's putting the breaks on, basically there is no "market" or what Ann calls a "no bid" scenario, in seconds. Envision a bank locking its doors. NO MARKET! GTFO NOW!
*Solution? - Open outcry execution, go back to electronic trades having to hit "the pits" with humans, and if you want to engage in arbitrage, get your qass on the floor and do it in person! (Sensible, won't happen now, but a note for the post-collapse "rebuild" effort more than anything for her including it here.
Goes onto the whole unfunded liabilities issue ($222T on a 75 year horizon) and this is only growing worse. Static? Ha! Massive hyperinflation (tax) risk! Critical mass.
Some discussion of healthcare, suggests a catastrophic/high deductible insurance only environment, POP price issue, allowed deductible plans to drive costs up.
Pt8-Whoa! Goes off on pol's, mostly R's since the D's are complete asshat write offs anyway, she places a lot of blame on enablers in the other party, and I cannot discard that even though I may not agree 100%, still 75%-85% is still too damn high!
Basically all pol's suck, all are psychopaths...after this last election I cannot discard that out of hand either...
*Paul Ryan plan - no cuts (cuts in growth "he's lying!") and 5% GDP for 30 years?
*Palin - Blew a great opportunity to use her pulpit, instead we got reality TV shows.
*Ron Paul - King of tokenism (my summation) - gold standard is still fiat and a distraction from core issues, and he's a antisemitic "batsh*t old man!".
*Bachmann- Raised $20m in campaign cash and was running for POTUS as a dual citizen (Switzerland).
*Allen West - Wants to raise a lot of cash and get wealthy, voted for: debt ceiling, Pigford, NDAA, Internet Kill Switch & monitoring, Libya arms for MB/AQ scheme.
Big finale - Bail on markets - inflation (tax) & confiscation coming, don't be a debt slave of the state. Objective? Wealth preservation (PMs). Relocate? Where? NO place to run. ChiCom plans to seize Aus/NZ after US collapse (I would argue our island holding, Hawaii et al too!). An new "dark age" is coming.
What should we have? Land, PMs, livestock, firearms, ammo, firearms, ammo, firearms, ammo, food, water & fuel.
Quo Vadis?
charlesoakwood:
Very interesting, thanks for the rundown.
Got me thinking on that "where to" question.
Mountains are good, natural water supply a
must and not cattle but ... goats.
Pandora:
Thank you, Libertas, for doing this.
Two questions:
What is ZIPR?
What is PMs?
Libertas:
ZIRP is Zero Interest Rate Policy - Fed discount window for banks at 0% interest.
PMs = Precious metals.
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