2012: Calm Before The Storm

Zero Hedge ^ | December 23, 2012 | Gordon T. Long

[Errant]

We have a new era dawning in Global Monetary policy. It is a new day with the monetary skies already red. Within 90 days the captains of monetary policy have steered the world into uncharted waters and on a course that history warns us against. Federal Reserve: QE3 "Unlimited" and QE4 within 90 days, ECB: OMT "Uncapped", BoJ: QE 10 and the newly elected Prime Minister Abe's mandate for "Inflation at any cost" BoE: UK's newly appointed BoE Governor, Mark Carney's Monetary Evan Rule targeting. These untested and newly commissioned captains all have PhD's from the finest Economic schools in the world, but they clearly have not studied nor grasped the key lessons of history. To any sane person, who has a grasp of what is presently occurring, it is obvious that the current state of affairs is unsustainable. The question is how long can the Monetary Captains' misguided policies keep us off the shoals of our economic destruction. How long can policies of "Extend and Pretend", Kick the Can Down the Road" or "Fake it Until You Make It" continue? The answer is likely unknowable, the certainty of it ending badly is not.

[Errant]

Direct link to Scribd hosted 9 page article.

[RegulatorCountry]

The author needs an editor to strike out nearly all the adjectives and turn the hype knob down several notches. It’s overshadowing decent information.

They’ll keep playing pretend so long as every major currency goes along with the game. So, it could go on for a while yet. The game will end quickly when even one of them stops playing along, due to war or some other large scale event.

It can’t end well, that much is evident to any honest observer. But, here we are. It’s held together better since 2008 than I would have expected. Delaying the inevitable will make matters worse when it finally comes down, I suspect.

Governments will fall.

[TLI]

Governments will fall

This one?

.

[RegulatorCountry]

Our currency appears to be the sacrificial lamb in all this. What is going to replace it with tens of trillions of unpayable debt attached to it? Answer that question and you’ll have an answer to your own.

[Errant]

Agree, except I’m afraid we’ve past the point where how bad it could get if we don’t do something, is no longer much of an issue.

[RegulatorCountry]

Keep the music playing as long as possible and maybe we’ll get the last chair.

[Errant]

Yeah, you can count on them doing that, while planning to catch the last plane to their island retreat (e.g., Hawaiian mansion).

Tens of millions of less fortunate will be left to deal with the consequences as best they can, IMO.

[hosepipe]

The federal reserve has been printing FIAT money for many decades now.. Currency is not money anyway.. Dollar bills are IOU’s to the federal reserve they are not tangible assets..

America is playing Monopoly has has been for a long time..

[ckilmer]

If no budget deal is struck by Jan 1, the big trillion dollar annual deficit will be sliced down to something like a 100 billion by raising taxes and cutting budgets—which is totally manageable.

If a budget deal is struck by Jan 1, the big trillion dollar annual deficit will be sliced down to something like a 100 billion by raising taxes and cutting budgets—which is totally manageable.

Either way the big US budget deficit goes way down.

Ain’t no financial apocalypse coming to the USA.

Then there’s the 50-100 trillion dollars worth of oil and gas that have suddenly and miraculously appeared on US balance sheets. There are no oil independent countries with weak currencies.

All that said, I don’t know what’s coming to other countries.

[DB]

Raising taxes isn’t going to raise revenue significantly.

It will only further erode the private sector.

[ckilmer]

Raising taxes isn’t going to raise revenue significantly.

It will only further erode the private sector.
//////////////
It will shave growth. The pubbies are correct that better growth provides more revenue.

But raising taxes does provide more revenue. Just not as much.

[Bshaw]

The bond bubble is about to burst, and along with it our currency, wealth and standing in the world.

Meanwhile back at the ranch, Homeland Security builds its inwardly directed militaristic infrastructure, which now includes Fusion Centers, (i’e. concentration camps), billions of rounds of ammunition, aerial drones and APV’s.

You see, once our planned collapse is complete, all will be in place to respond to the newly enlightened citizenry who will rightly be, “up in arms.”

I now return you to the ongoing national discussion on the disarming of law abiding citizens and those pesky, “assault magazines.”

Merry Christmas voters!

[bert]

-——but they clearly have not studied nor grasped the key lessons of history——

I would argue to the contrary. I would argue that they have not only studied their history well but have all more or less reached the same conclusion. The only way to conquer the debt is to inflate it away. The key lesson of history is that debt is dissipated by inflation

[Errant]

“Fiscal Cliff” put in a much better perspective.

Lesson # 1:
* U.S. Tax revenue: $2,170,000,000,000
* Fed budget: $3,820,000,000,000
* New debt: $ 1,650,000,000,000
* National debt: $14,271,000,000,000
* Recent budget cuts: $ 38,500,000,000

Let’s now remove 8 zeros and pretend it’s a household
budget:
* Annual family income: $21,700
* Money the family spent: $38,200
* New debt on the credit card: $16,500
* Outstanding balance on the credit card: $142,710
* Total budget cuts so far: $38.50

Ain’t no financial apocalypse coming to the USA.

Unfortunately your're very wrong about that. Not only have we abandoned our wild/independent nature for the taste of "free" corn, those who have baited us are now ready to spring the trap.

Steps can be taken at the personal, local, and state level to ease some of the pain. Those steps need to be taken now. Falling into a normalacy, this can't happen here bias will only make matters worse.

[Errant]

I agree that the ones behind the levers know history and know how to manipulate the controls of government machines to achieve their goal.

However, I think inflation (eventually hyper inflation) is primarily the natural outcome of all attempts at utilization of fiat currency.

The one advantage the world might have today from previous societies, thanks to the internet, is the ability to rapidly combined and spread knowledge. Using this technology, this time around, we may actually be able to overcome our inept governments and those who wish to run the world.

Below is a story on ZH as an example of a partial answer to some of the above. Some States are passing legislation to allow the use of gold. All States need to make preparations for the possible collapse of the US dollar, IMO.

Demand For Gold "CombiBars" Soaring

[bert]

What you have described is likely true and is the result of change on the horizon. The Combibar is super cool. It is a modern version of the small gold trinkets worn by Jewish and eastern women for centuries.

I personally believe there will never be a reversion to physical gold as a medium of exchange. There will be a new concept of some sort of gold/silver backed electronic ledger. Your plastic will actually trade the micro amounts of the heavily inflated gold within a bank with the zap of electrons.

I have read this book several times and it is a really great reference on the subject of gold, silver and national conomic difficulties

http://www.amazon.com/s/ref=nb_sb_ss_i_1_17?url=search-alias%3Dstripbooks&field-keywords=the%20power%20of%20gold%20the%20history%20of%20an%20obsession

[sport]

Yes, this one. My FRiend, the 2012 election results proved that we no longer have the collective intelligence to make our daily decisions on how we live our lives. Some of us do, actually a lot of us do, but in the big scheme of things, we are in the minority.

As some are proud to trumphet, we are a [in my opinion]a deply divided Nation. We are divided into two camps:1. Those who believe that we should individually be allowed to make the decisions on how we conduct our daily lives. 2. Those of them who prefer to live as slaves rather than live free. Both political parties and the main stream media fall into camp two. They just hope to be the ones in control.

[Errant]

Thanks for the book recommendation. I will check it out as it seems like an excellent reference.

Likewise, you may find this article about John F. Kennedy vs the Federal Reserve interesting. From the article:

Who owns the FED? The Rothschilds of London and Berlin; Lazard Bothers of Paris; Israel Moses Seif of Italy; Loeb and Warburg of Germany; and the Lehman Brothers, Goldman, Sachs and the Rockefeller families of New York.

I wouldn't say that gold/silver will never be used again as a medium of exchange. It's occurring now at some levels plus the technology we've discussed may someday make possible extremely fractional amounts of gold and silver easily exchanged.

My two bits...