Skip to comments.You Know How This Ends Right? This Ends Through War.
Posted on 12/31/2012 9:07:36 PM PST by blam
You Know How This Ends Right? This Ends Through War.
December 31st, 2012
In 2006, when Americans were flying high on ever-expanding credit and double digit real estate growth, hedge fund manager Kyle Bass came to the conclusion that something was very wrong. He and his investors determined that a massive real estate bubble was forming in sub-prime mortgages. But rather than just making a prediction, they put their money where their mouth was, and took a $4 billion gamble that the real estate market was about to detonate.
At the time, many in the industry and within financial circles thought him crazy.
History, however, proves he was right.
When the real estate bubble did finally burst, stock markets plummeted and mortgage backed securities fell to pennies on the dollar. Bass and his hedge fund made billions in the process.
Bass foresight was 20/20, and now he has issued a warning so dire that it, like the real estate crisis and recession that followed, is unimaginable for most Americans.
In many of these situations the quantitative analysis is already done. Its just a question of when will this unravel and how will it unravel, which I think is the key when were thinking about the chronology of events and the likelihood of events going forward.
Something that I think is really important to pay attention to, in the last 10 years debts around the world this is total credit market debts, this is on balance sheets, sovereign obligations, corporate debt, household debt has grown from $80 trillion to just over $200 trillion.
We sit today at the worlds largest peacetime accumulation of debt in world history
You know how this ends right?
This ends through war
I dont know whos going to fight who, but Im fairly certain in the next few years you will see wars erupt, and not just small ones
Youre going to see more social unrest.
You saw HUGE riots in Greece, and youre seeing HUGE riots in other parts of the world over food (and lack of food) and those are actually derivatives of the financial problems that were seeing. Were exporting inflation to some other nations. Going forward its going to be a problem.
Theyre not going to tell you [that a collapse is coming]. Youre going to have to see it for yourself. [During the Tequila crisis], the Mexican government affirmed they would not default, that they would not devalue, almost daily. The day after they said we wont devalue, they devalued by 60%.
The governments never going to tell you that its going to happen.
Greeces Yunker said recently, When it becomes seriousyou have to lie. These guys are never going to tell you the truth, because they cant tell you the truth. Their job is to promote confidence, not to tell you the truth.
Watch Kyle Bass: Full Speech at the AmerCatalyst 2012 Conference (Approx 1 hour)
The United States, Europe and the rest of the world have created more debt than has ever existed in the history of the world. Debt is nothing more than a representation (and expectation) of future earnings future work. But, as many of us know, there has been so much money borrowed that we cant possible every expect to pay it back. In fact, the only thing we can expect is that we will continue to take on even more debt.
At some point in the (near) future, the plug is going to be pulled and no one is going to lend anyone any more money. We saw this on a small scale in 2008 when credit markets around the world froze up. No one was lending money. There was so much risk that banks not only refused to lend money to individuals and businesses, but they refused to even lend each other money.
Central banks around the world, namely the U.S. Federal Reserve, calmed financial markets by pumping out trillions of dollars in emergency lending. This gave many a perception that things were returning to normal, but as Kyle Bass points out, we are in anything but a normal situation.
Debt has sky rocketed and were not going to pay it back ever.
Like the mafia does when debts dont get paid, our creditors are eventually going to resort to breaking some legs.
But were talking about debts of entire sovereign nations here, so the tools used to take care of it wont be crowbars or baseball bats, but rather, soldiers, tanks and intercontinental ballistic missiles.
War is coming just as it has throughout history.
And the 99% of Americans who believe in a benevolent, all knowing, all caring government will be the last ones to get the memo.
Ignore the warnings at your peril.
and most Americans don’t think anything is wrong except those evil Republicans holding back more freebies
And Happy New Year Blam.
I correspond with someone in India on a regular basis. He tells me people there expect their food prices to skyrocket in 2013.
I like Kyle because he's Texan and also has 20 million nickels as a hedge against inflation...
Food prices will go up here too.Another drought like last year-we will be in serious trouble.
Given we had close to 60 million voters for the R candidate, it would probably be easier to mobilize on a peaceful footing with real results. Not sure how the war proposal will inspire those unwilling to take action now with obviously fewer deleterious consequences.
The thing is Red China needs us to keep buying what they make, if they nuke us, they lose a huge market. Still, if they try to take us down, we must be reads to take them with us. We are in uncharted waters but I believe there is no mathematical way to pay off the debt, unless we print a 20 trillion dollar bill or something (that might not work either but when all else looks bad, well?), we might just as well default and reboot.
The only part of the article I disagree with is that it was “peacetime” debt. We’ve been in a cold war with communism for many decades, while they put their pawns in the government, schools and the media; laying their legislative roadside bombs the whole while. Their “H-bomb” was getting Obama elected, and it may very well turn into a “hot” war.
Thanks for the link!
I have a way to go, but have many nickels.
I see a Civil War coming. We just can’t sustain this kind of spending! We’re already broke! Tax hikes without spending cuts in this new supposed “fiscal cliff” deal! Our rights being trampled, our guns being threatened. Not that I’m a big gun lover, but our Constitution protects our right to bear arms. Not for hunting, but as protection against an oppressive government. Obama has been the absolute best thing for gun sales which are through the roof as is ammunition sales.
First post for 2013
...and from SHTF....
Happy New Year blam.
The BBC did a story a few months ago noting that there is double digit food price inflation in the world (15 percent rate).
Food isn’t included in the inflation stats here in the US, but back in 2011 the story from Australia was that food price inflation was running at 15 percent.
I make up the grocery list every week and read the prices and packages when I shop.
Food prices are going up either by the same package costing more or a new smaller package costing the same or slightly less.
THE BIG CULPRIT IN THIS IS THE USE OF FOOD TO MAKE FUEL (EHTANOL).
I'm lookin for a way off this planet and I'm not thinkin about suicide, either because that's a sin IMO!!!
If he's right... true peace is only gonna come from one place... you figure it out... Happy New Years and years and years, everybody, may you live in peace that passeth understanding!!!
The debt can be paid back, but the debt owners would have settle on getting just the principle back and forego any, and all, interest.
Even then, it would take 500 years for all this debt to be paid back by everybody.
Yes. It is the inevitable fate of fascist states to have to invade their neighbors right after they have destroyed their own wealth.
They need their neighbor’s resources to keep the party going.
Canada has vast untapped natural resources.
Mexico has a vast underutilized labor force.
The leaders do have other options like the “botox Evita” of Argentina Kirchner did a few years back.
She seized all the private pension funds and combined them with the country’s Social Security system.
All that 401k and pension money in this country is still untapped to feed the monster.........
Yep. Inevitable doesn’t mean next. The USofA hasn’t yet had all its own wealth destroyed.
Humans tend to get themselves into this predicament - hence the Biblical “Year of Jubilee” every half century. We’re gonna screw it up on a predictable basis, so just plan to hit reset.
I warned my son about that possibility when he was here Christmas.
And check out this thread...for some dialogue:
There’s a reckoning coming, no doubt about it. This country is occupied by two nations that absolutely loathe each other. The question is timing. What will be the spark? Will it be tomorrow, or will it be decades from now? One way of dealing with the uncertainty is to be absolutely sure who your friends are, and start digging now to identify potential future threats within your community. Which of your neighbors would be likely to support a regime drifting into tyranny? ID them and file it away in the back of your mind. Update every time you meet or learn about someone new, or when you have to correct initial data. It’s a slightly tinfoil-hat perspective to take, but having an advance notion of who to trust and who to frag could save your life in the chaos of civil conflict. Ugly thing to contemplate.
What Good Can a Handgun Do Against An Army?
It could end through war, although that would be awful for a lot of people to suffer war over something not their doing.
A better solution would be to depose and remove the problem leaders. Instead of millions hurt and inconvenienced, hurt or killed, there are maybe 1-500 people who could be banished from the country and end the drama and problems. Perhaps more if the media is included.
Gasoline is still 20¢ a gallon, if you use silver dimes.
“But were talking about debts of entire sovereign nations here, so the tools used to ..take care of it “....
which is the reason for the panic deal to push it through, and the imposter Roberts to gavel the final vote.
and a “tax” was decreed....
The number one debtor is going to attempt to secure it’s downgraded debt, on the shackled backs of decent U.S. citizens beginning in 2014.
They were actually counting on the “cliff” to coincide with 2014, to begin leveraging the average citizen, but it shows how fast (rate) the debt is accumulating.
Watch for coming Arbeitsziehungslager
Could it happen again?
It will be the US vs. China. Time to pay the piper. You get into bed with the devil, and now the devil demands his piece, and you will pay dearly.
China is more apt to be the "Arsenal of Democracy" with us playing the part of Britain, and ? (Mexico, Canada, Nigeria, whoever) playing the Axis.
Except China will be supplying whoever is playing the Axis, too...
I’m thinking about taking bets on when obama signs an EO eliminating all nukes, just like he promised Putin. Then we will be totally defenseless. Maybe Russia is going to hit us hard and that’s why he won’t allow any adoptions.
I don't think they can make a bottle small enough....and even if they did, ya couldn't dump a nickle bag of peanuts into it.
Those people traded their independence to the State for a mess of pottage. It is their doing. War is their heritage.
They might, when the dollar has been devalued by 99% or so.
FWIW I’m in India, and I don’t see that much to indicate a major rise.
That might - might - prevent the accumulation of additional debt. Keep the situation from getting even worse.
It would do absolutely nothing to reduce the present debt.
The problem is that each and every debt is also counted as somebody else's asset.
Writing off the debts would mean pensions, and 401ks, and every other investment in the world would suddenly crash.
In the long run, that might be a good thing. In the short run it would be catastrophic for the economy.
What WILL NOT happen is for us to continue into the indefinite future as we have for the last few decades.
When something is truly unsustainable, it won't be sustained.
Paint it black, go for broke.
This could all be avoided so easily. So fast could things go right, if only the productive class quit paying taxes. They hold the purse strings. No government operates without steady revenue; that is the “consent” of the governed.
Quit enabling. If you really think disaster is on the way, war and famine and the rest — surely you can choose the relatively minor risk and inconvenience of ceasing to pay taxes. Legally if you wish, illegally if you dare.
Maybe then you won’t have to stockpile chow and guns — although it sure is exciting, isn’t it?
“The thing is Red China needs us to keep buying what they make, if they nuke us, they lose a huge market. “
Is China neccessarily wedded to markets that are, or might China come up with a grand plan of markets to be? Junk the order of today, suffer some privations along the way, in order to have full power and authority in a new world setup. People are crazy and the old bipolar world kept many ambitions in check. The fall of the USSR is “old” news but the pace of History is slower and finer than the human attention span.
Mexico has a vast underutilized labor force.
You are correct. Of course the US also has large untapped petroleum resources. At 20+ per cent real unemployment the US also has a vastly underutilized labor force, some of whom even speak a form of English.
I would urge everyone to view the Bass speech. He might be the smartest man in America.
Reality can be ugly sometimes, but it still needs to be dealt with.
How will already broke governments finance them without being able to borrow?
Their votes made this all happen.
There supposedly is a plan being worked on that would propose doing just this. it’s “1035 something or other..” I can’t remember the specific name, but the number 1035 is in the name.