No-Exit Policies: Central Banks Make Mess, Can’t Get Out

My interview on “Stocks and Jocks” with Tom Haugh & Kathy Dervin. The show aired Friday morning 7 AM Central Time (these guys are good!). Below is my part. Enjoy the ride!

Here is one of the articles we talked about…. OECD Warns Fed, BOJ, ECB of Asset Bubbles, “Risks to Financial Stability,” Pinpoints US Stocks & Real Estate

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  51 comments for “No-Exit Policies: Central Banks Make Mess, Can’t Get Out

  1. Petunia says:

    The end game is to roll up all the debt into an IMF SDR, the mother of all kicked cans. It will buy them more time but it won’t fix the problem. Writing off all the bad debt will fix the problem and reprice the assets, exactly what they fear.

    BTW, forecloses are up in south Florida again, as well as prices. I don’t get that either.

    • d says:

      “BTW, forecloses are up in south Florida again, as well as prices. I don’t get that either.”

      Prices have risen to the point where many foreclosures will no longer be loss making for the lender. After additional costs.

      Hence foreclosures become more attractive to lenders.

      Further distressed debt buyers, will now take profits, by foreclosing on the assets, they brought for pennies on the $.

      • Petunia says:

        No matter how cynical you become, you can’t keep up. Your explanation just goes to show what a racket home ownership has become. Being more prudent and putting down a larger down payment only makes you a bigger target for the banks when you run into trouble, and in this economy you will.

        We lost a home we bought with 40% down in the financial crisis, and we were not unique. Take a look folks, this is the new normal. Boom and bust, until they take it all.

        • Miggs says:

          Everything is a racket today. Insurance, markets, real estate, retail, government expenditures, bonds, commodities, metals, even ebay. If there is real money to be made, some large entity has corrupted it to the core.

      • Saylor says:

        I call that the ‘event horizon’. Taken from physics it is the point that light cannot escape the gravity of a black hole/singularity.
        Prices continue to rise in some small parts of a market (luxury dwellings or ocean frontage…etc.) but the gravity is starting to pull in the more borderline owners. All it takes is to have about 1 in 20 apples to apples listings be a default and the rush for the exit starts. Then the banks are not so willing to foreclose. Wash, rinse…

    • chris Hauser says:

      uh, it’s the bottled up pipeline, and, some new stuff.

  2. walter map says:

    Sartre’s great existential play Huis Clos (“No Exit”) demonstrates three things:

    1. To exit Hell, just walk out the door. It’s not locked.
    2. Hell is other people.
    3. People do it to themselves and are their own worst enemies. The protagonist never does walk out the door, strangely preferring the company of misery.

    The global financial system is much like Sartre’s hell, only more refined, more complex, and a lot bigger. But the misery is still in large part self-inflicted, because in many ways those affected can’t bring themselves to avoid cooperating with the system that makes them miserable.

    • RD Blakeslee says:

      Sartre’s assertions apply to all kinds of “people” experiences.

      For example, if one can stand one’s own company, one can quit fighting life in any of our major cities and become much more self-controlled in the countryside.

      It may not be heaven, but it’s not the hell of the people-pot, either. So walk away.

  3. Mick says:

    That’s been the plan all along. Paint themselves in a corner while simultaneously blowing the biggest bubbles in history.

    No accidents folks. You either believe the rulers of the world are unfathomsbky stupid or evil.

    • night-train says:

      “No accidents folks. You either believe the rulers of the world are unfathomsbky stupid or evil.”

      Why can’t the rulers be both stupid and evil? I vote for both.

      • nick kelly says:

        You two- ever think We the People might have something to do with it?
        Recessions are necessary to correct the excesses of the economic cycle- but they are sure aren’t popular. Now we’re paying for electing populists.
        Nixon went off the gold standard because the US couldn’t pay for the war in Vietnam without raising taxes if the US kept the dollar convertible. That opened the door of the liquor cabinet- now self control would be needed- the discipline of gold was gone.
        When Reagan took office the total debt of the US accumulated since independence was one trillion dollars,
        Reagan ran on a platform of good old GOP religion, smaller government and therefore smaller taxes.
        He cut taxes alright- that was POPULAR. Then it came time to cut spending- not popular- and Reagan wanted to be liked.
        So four years later the debt is two trillion.
        The Greenspan years were devoted to avoiding recessions, including
        some that never happened- remember the Y2K scare?
        At one point at the height of his reign it was announced that he had ‘tamed the economic cycle’- there would be no more recessions.
        The Fed would always act to prevent them.
        Did either of you at that time say: He is stupid and/or evil?

        Example from Alberta: hard hit by the fall of oil prices and after decades of overpaying its public sector, it had an election.
        Jim Prentice running for the conservative party that had been in power for half a century said it was going to be tough and belt tightening was needed.
        Result: gone- and in comes the NDP who are ‘fighting’ the recession with a deficit of 10 billion, and 45 thousand new public sector hires.

        So who’s to blame? Dumb voters or a secretive evil cabal of puppet masters? If the latter, we could eliminate them and all would be well.
        This was a main plank of the National Socialist German Workers Party.

        • NotSoSure says:

          The problem is obviously both. Both muppets and rulers want to live in a world with only positive consequences.

        • Meme Imfurst says:

          Nixon went off the gold standard because of Charles DeGalle. France was given cash to help rebuild after WWII, and that snake double crossed America by demanding gold since the dollar said payable on demand for gold. DeGalle demanded gold for the dollars. The fear was that other countries could do the same and bleed the US dry of gold reserves. DeGalle’s hatred of General Eisenhower was DeGalle’s way of getting even. And so began decades of mistrust and distain for France.

          That is why we went off the gold standard…period.

        • nick kelly says:

          You got the part about France right. Thing is, as shocking as it seems today, at one time a US dollar actually WAS worth one 34 th of an ounce of gold. Before 1960 there was almost no inflation- a small Coke out of a machine was 5 cents. Today it’s a buck- 20 times more. So gold at 34 times 20 would be 680- or where it was within the last 15 years- so it wasn’t going to stay at 34, with or without De Gaulle

          When the US kept printing more and more of them and then a flood as the Vietnam war had to be paid for- this devalued the dollar- making gold more valuable.
          France was suspicious of paper money before DeGaulle was born.
          This is because it was the first country (before ancient China)
          to completely replace gold and silver coins with paper money in the mid 18th century- about 1750.
          This was the idea of Scottish schemer John Law, who had broken out of jail, studied early stock markets in Holland, and moved to France. There he finally found a powerful client willingly to try out his alchemy- “I can turn paper into gold”-
          the French King.
          It worked at first and Law was promoted until he became the Minister of Finance, Tax Collector and the CEO of dozens of huge French companies.

          But as they printed more and more- people became suspicious and began switching back to metal coins-so the King forbade them.
          The scheme eventually collapsed wiping out countless fortunes wrecking the economy and sowing the seeds of the French Revolution. It was something like the South Sea Bubble, a huge stock market crash in England but far more serious because it was the currency that crashed.
          The French never forgot this- I believe only the US had more gold than France in 1929.
          As the US dollar became depreciated France was first in line all right but the line was long. (the $34 per oz was never available to Joe Blow) One was a friend of my father’s who began buying in the late 60’s- at 120?

        • d says:

          What you describe in Alberta is the flaw in the current form of western democracy.

          The left make untenable, and long term unsustainable promise, they can not keep, or that will have devastating future consequences, and get elected every time.

          They have bought office, more blatantly than the vampire corporate’s buy office for their people.

          There is a country, that is trying to make it illegal, for any future government to run at a deficit, before borrowing costs.

          As a piece of legislation it is not dead yet.

          Democracy needs to be tuned, to stop the left buying the election, with long term untenable deficit and public spending.

          Or it is doomed, as in its present form it is a failed experiment. The current global financial and trade mess proves this.

          The ultimate cause of the problem, has been untenable leftist policy spending. To repeatedly buy Election’s.

    • Miggs says:

      Yeah spot on. They are so far ahead in their thinking they know exactly where this is headed. They knew Lehmen was going down well in advance, they knew what the CDO’s were going to do, they knew exactly what repealing Glass-Steagall would do, they knew exactly how to game the rating agencies, and on and on.

      Don’t forget about clamping down on Mom and Pop so they can’t take any real money out of the bank without someone knowing about it. They used 911 for that one.

      We are witnessing a controlled demolition.

      I fear war is next.

      John 3:16

  4. Northwest Resident says:

    Good interview!

    Very interesting take on why Japan is so hell bent on buying up such a large portion of Japanese corporate and government debt — to avoid disorder. That sounds like a good plan, but do they have contingency plans for global market meltdown and subsequent mayhem? Japan is not self-sufficient especially in oil/energy, which means their plans of maintaining control might run into a little snag one day.

    Did I also understand from the interview that you believe the FED is trying to figure out how to walk away from the mess they’ve made? That would be synonymous to “pulling the plug”, wouldn’t it? We all know that the only thing preventing the global economy from imploding instantly in nuclear meltdown is the concerted efforts of central bankers led by the FED. (Don’t we?)

    Is that a Canadian accent I detect? :-)

    • MC says:

      Mr Richter has done well his homeworks: that idea that Japan is monetizing debt now to avoid a meltdown down the road is probably the correct one and the only one making sense.

      The problems Japan is facing however are not a worldwide meltdown (those waiting for it may be disappointed, unless their idea of a meltdown is the same as Hemingway’s idea of a bankruptcy) but the same as other big exporting countries.
      First is no matter how crazy your monetary policies to thrash your currency and hence stimulate exports, your potential customers will behave even crazier.
      Second is the big exporters depend on one chief market: the US. As personal consumption and capital investments stagnate in the US, it becomes obvious the US economy is maxed out. No 1929 style depression, but a prolonged stagnation lays ahead, which is probably the worst possible outcome.
      Third is China. If China sneezes, the rest of the world catches pneumonia, starting from Germany, Japan and Korea, all of which export massive quantities of goods to China. All three of them had better pray and hope the Chinese Communist Party finds some way to keep the local economy into overdrive without melting the engine.

    • Wolf Richter says:

      Thanks for the kind words. I’ll give your questions a shot…

      1. I don’t know if the BOJ has a contingency plan. I can’t imagine what it might be. I do know that a yen crisis – if well managed, it could be a “slow” crisis – would be easier to deal with and less chaotic than a debt crisis. As along as they have a trade surplus, they’ll receive more hard currency than they need to spend on their imports. Which means, they can work through a yen crisis.

      But a yen crisis has devastating internal effects: it destroys yen-denominated wealth. If wages don’t pull up fast enough, it will make Japan very competitive, but it will kill domestic consumption.

      2. Yes, I think the Fed is trying to ease away from these policies without crashing the markets. And every time they tried, or even talked about seriously, markets come down hard, and the Fed throws in the towel for a while. They’re totally focused on the markets.

      3. The accent you detected is a mix. There’s broad disagreement as to what it is. Because I’ve moved around so much, I’ve become, what I call, linguistically unstable, and my accent changes.

      • EVENT HORIZON says:

        Imagine my accent:

        Born to American Parents working in Brazil (Airline Industry)
        Next, raised in Hong Kong
        Next, moved and raised in Luxembourg
        Next, moved and raised in Germany
        Next, moved and raised in Beirut, Lebanon

        Didn’t really have anything to do with America until finishing High School. (PS: this is also why my grammar and spelling is odd).

      • VowelMovement says:

        You know, I have the same thing going on. When I go “down South” my Vowels Move. That’s right, I get off the plane and right away I have a Great Big Old Vowel Movement.

        • Edward E says:

          Well, I’d advise probably be a little aware that in some places in the beautiful South a wowel movement can get a bit awkward.

          To wit I was down in Texas in the late nineties and several ebullient locals were picking at the way I tawk, being from the Awkinsaw Ozarks and all. I finally said, “Look, Ah regrets about Bubba Clinton raised ya taxes.”
          They started whacking on me… I sez, “What-n-‘eck do that for? Awwl Ah sed was I’m sorry Bubba increased your taxes.” They apologized, “Oh… we’re sorry, we thought you said Bubba Clinton was raised in Texas!”

      • d says:

        “3. The accent you detected is a mix. There’s broad disagreement as to what it is. Because I’ve moved around so much, I’ve become, what I call, linguistically unstable, and my accent changes.”

        A common problem, I get accused of being American or dutch depending on where I am currently I wouldn’t want to be either.

        Just as languages are live so our enunciation in changing environments. Or even social circles.

      • JerryBear says:

        It sounds a little bit Southern to me but like you said, a mixture of influences. The other guy sounds like he is from around the Chicago area.

      • exiter says:

        “…if the BOJ has a contingency plan…”

        BOJ is not a person, It has no awareness, no intention nor attention. It is only a mechanical tool under the control of persons.

        Certain persons, like a CEO, use the tool for direct benefit, such as millions of Yen salary; or indirect benefits, such as for intimidation of competitors.

        That person does have a contingency plan. His personal plan ensures that the success or failure of the BOJ-tool either continues great rewards or, at worst, he disconnects from the tool [divesture ] and connects to a new investment tool.

        I. e., if BOJ-tool or Japan-tool suffers/sinks, move operating base to elsewhere where preparations have already been made. Homes, land, bank and legal affairs already sit quietly ready. Peru? India? Argentina? USA? Australia? England?

        The person just moves his tools [game-pieces] accordingly. The “public” is just another tool, useful according to the person’s choice of game in life.

  5. Jonathan says:

    Stocks make me LOL.

    Just look at some company like AMD: A perpetually loss-incurring chip designer who had it stock rose from $1.83 to $7.40 with nothing but blowing hot air on future products. This is the kind of insanity raging when the overall investment scene is so starved of yield.

    • Petunia says:

      I think of AMD as the cockroach of the tech world. It has been going out of business since the 80’s and is still around. If I was going to bet in the stock market, which I’m not, I would bet on them being around in the future.

      Having said that, who is even thinking of putting money in this crazy stock market. It is no longer a real market. Every time it falls below 18K they pump it up. I am not trusting enough to think they can do this forever, or will. When they stop pumping, how low is the floor. I have no idea, but it could be zero.

      • Saylor says:

        …”cockroach of the tech world”…..that got a chuckle out of me. I use to live in the tech world of the bay area before moving south. AMD was always this peripheral news item about to go down for the third time.
        I see a market play now being something like playing baccarat. Only without the attractive women bringing me drinks for free.
        Hence, I’d rather play at a casino.

  6. Ptb says:

    Japan is an interesting case to watch as they have a demographic that is aging without 100% replacement and they’re anti immigration. But they’re also the world leaders in robotics and automation. Robots don’t pay taxes, income deceases after retirement and health care costs rise. Higher corporate taxes? More debt monetization?

    They’re also world leaders in debt monetization. Holding most of your debt in money that no one ever worked to obtain and has no collateral and is held by your CB. Who would be hurt on a default? But default won’t happen in an infinite monetary policy world anyway. The logical outcome is a slow devaluing of the currency…assuming Japan keeps its relative position as a world class productive capacity country.

    • chris Hauser says:

      money is a medium of exchange and a way to count.

      it isn’t always real.

      that’s it.


  7. EVENT HORIZON says:

    Before you all get too upset about the Central Banks buying up these stocks and bonds, just imagine what is going to happen when/if the Stock/Bond Markets collapse under their own intrinsic non-value.

    Just imagine the total hell.

    Every Pension fund, Insurance company, Annuity, Retirement Plan, etc., will be a complete and total failure.

    We, you and I and the World, can not have that. So, Central Banks PLEASE keep on buying.

    • Ptb says:

      I think that a lot of pension funds, annuities, etc…are mandated to be heavily invested in treasuries. And the return is so low that their respective plans will not stay solvent.

      But for many other investments, yes, the stock market being inflated is absolutely critical. 401k’s and executive compensation packages being major benefactors of an inflated stock market. And coincidentally these are popular in Washington DC and corporate America.

  8. Ishkabibble says:

    Depending on one’s particular definition of “collapse”, one COULD say that the “traditional” US economy already collapsed with the bailout of TBTF banks, TARP, Dodd-Frank, etc. (Of course all of that was necessitated by the repeal of the various post-1929-depression legislation and the predictable return by the TBTF banks to doing what caused the Great Depression 1.0)

    At the very least, one would have to say that what the Elite’s central-bank slaves have be doing since “the Financial Crisis” a few short years ago is “flying by the seat of their pants”. Or, as one Lord Rothschild very recently said ….

    Of course the irony is that if large investors started selling stocks, bonds, etc. and started buying PHYSICAL gold and silver in large quantities, this would not only cause the price of physical gold and silver to skyrocket, but might very well force the Fed, etc. to prevent the DJIA from crashing by becoming the share-buyer of last resort. That is, if the Fed, etc. take their “whatever it takes” experiment to the extreme in order to prevent a stock market crash, the Fed, etc. might end up “owning” or effectively controlling some or all of the corporations that are listed on the stock markets.

    So lots and lots of astronomically-priced gold would be owned by all of the stock-sellers, and the central banks would effectively own or control lots and lots of shares of corporations. Now, THAT is what I call experimental, because if you think corporations are buying back their own shares to the extreme now, can you imagine how high Janet’s computer’s number-pad could boost the prices of it’s corporations’ shares “on the stock market”? To infinity and beyond!!

    The Fed might very well be forced to take this latest unprecedented, experimental step in order to keep the US’s war-based economy fighting the perpetual wars whose REAL purpose is NOT defending the US from attack, but to force the other nations of the world to continue to accept Janet’s printed-out-of-thin-air dollars as payment for REAL goods and services.

    In case you didn’t realize it, the USD is no longer on the gold standard. And does any sane individual or nation have any “full faith and confidence” in the ability of the US government to extract from increasingly-impoverished present and un-born Americans enough “money” to repay the federal government’s debts to other nations? No, quite the opposite. They know with certainty that the US will NEVER pay off its debts to other nations. So just exactly WHAT is “backing up” Janet’s USD? The answer is so, so simple, but is NEVER stated or even alluded to in EITHER the MSM or the “alternative media”.

    What creditors to the US DO have full faith and confidence in is the US’s proven track record of destroying any nation who refuses to accept the USD for their REAL goods or follow US diktat. In short, the USD is now on the not-so-experimental “drone standard” and that is the one and only thing keeping the US’s post-2009 experimental economy going.

    It’s the most vicious circle of them all. Janet must continue to do what she’s doing in order to fund the US’s perpetual wars which MUST be conducted in order to force the rest of the world to continue to accept Janet’s monopoly money and US corporate diktat (AKA “to protect US interests”). Should the US’s wars for any reason stop, or be stopped, the US’s drone-standard-currency and its war-based economy would collapse into Great Depression 2.0. THIS is the reason for what the US has been doing in the middle east and why it MUST continue (and Janet’s finger must fund it, and round and round it goes).

    • chris Hauser says:

      you can’t eat gold, and it can’t make a widget. or get you from a to b.

      it’s a shiny fiction, though i concede it does have its industrial and jewelry uses.

      i don’t want it.

      • Fred Hayek says:

        Gold (and silver) satisfy the qualities needed for money (note that I say money and not currency) rarity, portability, durability, divisibility, homogeneity, cognisability, etc better than anything we’ve ever come up with. Their value as money was not arbitrary or somehow “fiction”. That’s why they’ve endured as money for thousands of years and are only relegated to the fringes of things now by desperate government and private central bank intervention in markets.

        Oh, and you can’t eat your 401k either, can you?

    • Peter Forsyth says:

      Ishkabibble. Your comments are a short history of economic events in our times. Remarkable precise. Good luck. Peter.

  9. Saylor says:

    …”if large investors started selling stocks, bonds, etc. and started buying PHYSICAL gold and silver in large quantities”…

    I am convinced that this will NOT happen.

    Keeping such assets liquid for quick turn is problematic. And once collected together into ‘safe’ storage, a target for the desperation of the state.

    • Ishkabibble says:

      Yes, governments can seize, and in the past have seized, privately-owned gold.

      But the reality is that governments can not print physical gold out of thin air and they know it. This is what makes gold so dangerous in the minds of the “Elite” human beings in governments and central banks, when what is in reality a threat to human existence is their own behavior………. and they know it, but they’d rather continue the US’s wars of hegemony and extortion and even start WW3 rather than lose their power and privilege.

      Again, this is exactly what’s going on right now. It’s the one and only plausible explanation for the US’s behavior in a world in which it’s Homeland (Fatherland) has never been LESS threatened.

      • Saylor says:

        I don’t believe ‘they’ would seize it.
        Just tax the crap out of it.

        I have found that anytime there is a major ‘play’ (let us say Nixon taking us off the gold standard…it happened for more than one reason) there are a couple of other things that work in concert.

        The ‘elite’ may be playing the war card to protect power but it is also as simple as defense contractors wanting to test out new gear and sell it to boot.

  10. Agent76 says:

    September 21, 2016 The Three Stages of Empire

    Though Edward Luttwak’s The Grand Strategy of the Roman Empire: From the First Century CE to the Third is not specifically on the rise and fall of empires, it does sketch out the three stages of Empire.

  11. nick kelly says:

    It’s impossible to analyze the Fed’s actions just in terms of its mandate, which is the US economy.
    Take for example, the WS post within the last day or so about the looming collapse of the Mexican Peso.
    As much as the Fed was probably asked by China not to raise rates during China’s stock market crash- the idea of a Mexican economic crash is a clear and present danger. The US is not happy about Mexican migrants now- but it is a steady predictable factor that may be reversing itself.
    Europe has seen sudden outflows from failed states that are anything but- and the truly desperate, like those making ocean voyages on cheap inflatables, are not going to be stopped by a wall.

    It is not in the interest of the US to have a depression in Mexico (although someone will probably comment that the CIA is planning one)
    and therefore it is not in the interest of the US for the Fed to put more pressure on the peso by raising US rates.

    The opponents of globalism, free trade etc. sometimes paint those trends as US financial imperialism.
    Maybe, but as the developing world is more closely tied to the US, the US is more closely tied to it.
    So even if the Fed narrowly (selfishly?) acted only with the US economy in mind, it could still justify considering other economies that impact the US.
    From another angle – the US military budget is bigger than the next six or so countries combined. But many of those on the right who criticize the Fed for being so dovish (because it’s worried about the impact of a rate hike on other countries) will accept or even support the idea of a world- wide US military presence- a sort of global cop.
    But doesn’t the same apply to the central bank of the world’s largest economy with the world’s lead currency?
    When the Fed’s mandate was created- before WWI or shortly after the outbreak, it might have made sense to employ financial isolationism along with political and military isolationism.

    In the aftermath of WWII, and the end of isolationism in the last two spheres should we expect the Fed to embrace economic isolationism, i.e., to embrace only its official mandate?

    If it was doing so it might be on its third or fourth .25 % raise by now.

    • Fred Hayek says:

      Gosh, I thought John Perkins’ book, Confessions of an Economic Hit Man was pretty clear that it was anything but isolationism when the IMF would push debt on emerging markets that they knew they couldn’t repay and then screw them over as soon as their was trouble whereupon U.S. banks would swoop in and buy up physical assets on the cheap. Isn’t that a wonderful form of engagement in the affairs of other nations. And it’s not even that horrible isolationism.

    • Ishkabibble says:

      China is now experiencing first-hand the ultimate problem that every other nation on earth must at some point face — how to employ its very own population to “go it alone” WITHOUT exporting or importing anything of vital necessity.

      Chinese authorities are struggling with an economic / political solution to this fundamental problem as I type. China’s relatively recent experience with two different ways of “harnessing human motivation” (the latest through its “banking system”) will serve them well in this endeavor.

      Simply stated, ALL of the individual national economies of the world can / must not depend upon exporting or importing stuff — whether that stuff is TVs or weapon systems or terrestrial resources or food. This necessity is easier to understand if one thinks of the entire world as only ONE nation with only ONE SINGLE economy. Looking at the world this way, to just exactly WHOM would this true macro-economy “export”, the people / economy of Mars? No. Therefore, just as this imaginary one-economy world would certainly have to figure out how to “go it alone”, again, so should all of the real individual nations / economies of the world right now.

      One might argue that a “fully globalized” world of individual nations importing from, or exporting to, each other would in the end be better prepared to go it alone “as a whole”. But all we have to do is look around at the real world of today to see how well that is going and the likely-horrible next steps in the present process.

      In short, exporting and importing are both potentially dangerous to an economy, and, therefore, individual nations should import or export stuff only AFTER they have been going it alone for some period of time.

      China is not alone, not by a long shot. We see how the Japanese “system” has struggled, and is struggling, with its shrinking population. It still relies on exporting stuff, but that MUST change in order for the Japanese people to survive over the long term with a shrinking population. The financial / monetary acrobatics of Abenomics are only serving to DELAY facing reality.

      Then there is the US. Once a great manufacturing powerhouse for the world, in the present more-competitive world, the US has now fully reverted back to employing a much simpler gangster / colonialist / multi-national-corporate economy — ie, extorting / using printed-out-of-thin-air USD to “buy” (steal?) REAL stuff that it needs from the rest of the nations of the world at the point of a gun. Unfortunately for the US, the rest of the world is not going to put up with its “exceptionalism” and “spreading of freedom and democracy” for much longer.

      • d says:

        This centers around the balanced trade argument. To many nations either seek to resolve their issues by exporting, or like china and india among others have a deliberate state policy of a large trade surpluses every quarter.

        The only nations that should be running trade surpluses, are commodity exporter’s. Ex commodity’s their trade should be deficit or balanced.

        If everybody tries to behave like china, and run deliberate huge trade surpluses, decade after decade, nobody will have any money to buy.

        china has caused this more than once globally. The European entry into the existing Opium Trade, was the result of chinas unfair trading practices with silver.

        The European entry into the existing Opium Trade led to the Opium wars, as the west was not willing to let china, again accumulate most of the global silver, and cause another silver crisis as it had already done before.

        China has caused several large global economic cirisi in history currently it is the major factor in this one which most attempt to deny.

        china has 40 years of huge trade surpluses, the problem being, this time it is not in silver and gold bullion in the vaults in Beijing it is in the bricks and mortar of the ghost citys, so can not be liquidated and china is also saddled with huge credit issues, the world will suffer due to china greed again, as in the past, much more than it is now.

        • Ishkabibble says:

          d, I think you may have missed my point, so I’ll change things a bit.

          A few weeks ago I asked my brother-in-law why TVs and tools are no longer being built in Canada and the US. He replied “they’d be too expensive”, “we couldn’t afford them”.

          So let’s imagine that all human beings that live outside of the USA for whatever reason dropped dead tomorrow. Now the USA is the one and only economy on earth and must somehow “go it alone” and provide every thing and every service for itself. It either does that or it does not enjoy those things and those services.

          Freedom still exists, so “labor” and “management” are still “free” to organize politically and the “markets” are truly “free” and the “invisible hand” is doing all its magic tricks.

          Now, how are all the citizens of the USA going to “afford” to live from birth through old age when they must pay for all things and services that must be provided by their fellow citizens (instead of by slave-laborers either overseas or imported to do work for slave wages) — citizens who want to be able to retire when they reach physical decrepitude without starving or freezing to death? How must things be “arranged” to accomplish that?

        • d says:

          I didnt miss that point I just added other lines in the same topic zone.

          “How must things be “arranged” to accomplish that?:”

          That will be simple, wages will have top rise, to the point where the workers “back to ford” could afford to be consumers. Or the state would become a “DPRK, Mafia controlled, slave state”

          American real wages have been dropping, as Vampire corporates, with no national loyalty, abusing globalization, offshore their production.To the current cheapest labour source on the planet.

          They have succeed in destroying the American middle class, with O bummer and china’s help, now they complain about a stagnant global economy with no consumption demand.

          The western middle class, was the driving engines of world consumption. The Globalised Vampire corporates, allied with china and O bummer, kill the golden goose “the western middle class’ without first breeding another to replace it.

          The global property bubbles are coming to an end, as the people in those country’s, can no longer afford to buy, at these over inflated prices, (Back to what would have to happen in a single consumer state) and the speculators are starting to sell to each other. When that happens the market will implode as the bigger smarter speculators cash out.

          Property prices, in to many markets, have risen to far for the market to be saved by wage inflation, as the required level of inflation, is to large for the economy to absorb, without huge negative effects.

          Our global economy is way out of balance, one thing a single state needs is a balanced economy no matter its size or level of prosperity.

      • Peter Forsyth says:

        Ishkabibble. The oil is running out so what have you in mind when this situation ocours?

        • Ishkabibble says:

          If for the past 15 years the US had been manufacturing energy production and transmission infrastructure instead of WMDs and war, the US would be energy independent of the middle east and could ignore that place from here to eternity.

          All the US has to do is stop its wars of hegemony and this very day announce that intends to do just exactly that within 15 years and it will be done.

          For obvious political reasons it will not do that. To learn what they are, go to the following:

          and, on the right of the opening page, select “Contractors by State” and then select Virginia. After that, select California. Then all the rest. Only after doing this you will know exactly why the US is, and has been, making all the wrong choices.

  12. ACasey says:

    My reading lends me to believe the financial fiasco generated by central banks, the Federal Reserve in particular, is done purposely.

    Invisible Government by Dan Smoot
    Gold Wars by Kelly Mitchell
    Political Ponerology by Andrew Lobaczewski

    Smoot, former FBI, takes the reader through the history of meticulous decision making by powerful cabals that circumvented power for personal gains, the citizenry be damned, exposing true intent.

    Mitchell reveals particulars of the rewind and replay methodology of the fraud that has dominated finance; repeated over and over, generation after generation exposing true intent.

    Lobaczewski details the reasons otherwise normal thinking people are spellbound and led along by psychopaths and characteropaths and explains steps normal people need to take to recognize and free society from the throttling grip of the true intent of these policy makers.

    The true intent is manifested in the horrible reality on the ground which does not match the narrative of central bankers.

    Central bankers have demonstrated the need for normal people to wrest control of societies finances from these clinically disturbed individuals and it is up to individuals to recognize these people function like a virus, a disease on society, and take steps to replace the sickness mindset of central bankers with that of normal people.

    Smart people are normal thinking and recognize the nonsense of central banker decisions. It is up to all of us to replace these sick policy makers with healthier normal thinking people.

    There is no logic trying to rationalize the actions of the biologically and physically damaged mindset of central bankers.

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