Rick Santelli On The Fed’s Upcoming “Nixonian” Price Controls

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BLSBureau of Labor StatisticsCPIFree MoneyHome EquityHyperinflationJim RickardsReserve CurrencyRick Santelli

Rick Santelli was on King World News today, discussing the distinction between deflation and deleveraging, or what some have dubbed the phenomenon of surging prices in things that one can buy without leverage (Friday’s limit up open in various commodities being one example), and plunging prices in everything that requires debt (i.e., one’s house). And while the Fed can game the CPI as much as it wants, once middle America see the cost of basic foodstuffs double (and it will once producers hit negative profit margins and are forced to pass input cost inflation to end consumers) they will realize just how serious this problem will be. Of course, the only way to offset this localized inflation is by returning to the time when America could use its houses as piggybanks in the form of taking out equity lines of credit. The problem with that, of course, is that the Fed will be forced to increase home prices at all costs, even as speculators take basic commodity prices up in anticipation of the coming hyperinflation. Which means that the Fed will be behind the ball, and will be forced to increasingly devalue the dollar as it is now obvious that no matter how cheap credit becomes, and how pervasive free money is, the last thing to go up are home prices which make up the bulk of US consumer “wealth.” As such, today’s collapse in the ceasefire in monetary talk is no surprise: every central bank is fully aware that with the monetary component to intervention, via cheap credit, now priced in, but priced in in terms of equities and commodities, the only way to create equity value in housing (of which per some estimates, 25% of all homes (and rapidly rising) are underwater to the underlying mortgage) is to broadly debase the currency. This is now a virtual certainty, and the higher gold (and soybeans, and corn, and what) goes, the faster the Fed will need to destroy the dollar, making the vicious loop of hyperinflation spin faster and faster…

We dare the deflationists out there to look at the charts of coffee, barley, oranges, pork, cotton, rubber, iron ore, and tell us where is this much-hyped deflation…The right answer, of course, lies in one simple word – and as Santelli confirms what every Zero Hedge readers knows, it is “monetization.”

All that is well-known. What is more interesting is Rick’s discussion of what will be the Fed’s next step after another failed QE round: price target levels. This Santelli qualifies as a “Nixonian” approach of price, or specifically, yield controls, such as i.e., 2% on the 10 Year, and the Fed will keep bidding up securities until one after another target is achieved. Of course, for the abovementioned home equity values to reappear, the marginal cost of debt has to be as close to zero as possible, so that readers can refi into a new debt piece, which would make home prices essentially explode as consumer become price agnostic vis-a-vis taking one one dollar or one trillion in new loans: if the rate is zero, there is no cost. And this is what will ultimately happen, and be preceded by outright monetization and the collapse of the reserve currency system, and of monetarism as a result. That is, pure and simple, the end game.

Naturally, all of Rick’s logical objections to the Fed’s launch on this road to dollar debasement will be ignored by the relevant people.

Another amusing observation is the question by Jim Rickards addresed to Rick, and predicted by a Zero Hedge analysis on what is a statistically impossible perpetual upward revision in initial claims, as to whether “someone is finessing the data for the labor statistics.” We agree and disagree with Rick that these adjustment are like noise in the grand scheme of things: agree in that indeed whether it is 450k or 455k is largely immaterial, when in both cases the economy is not generating jobs, yet when it comes to headline scanning robots, the difference can mean a world of difference to the marginal trader, who is being games by both the HFT system and the BLS bias.

A last observation, on what will likely be the source of the next major rant by Santelli in the upcoming week, now that FX wars are the topic du jour, is Santelli’s very correct highlighting of Geithner’s hypocrisy in damning FX intervention by others, when the Fed is the biggest FX debaser courtesy of Bernanke’s printing press, whose only purposes these days it appears is to end the dollar’s status as a reserve currency.

For all this and more, including Santelli’s take on the upcoming mid-term elections, the link to listen to the always entertaining and informative Rick Santelli can be found here.

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by cossack55
on Sat, 10/09/2010 – 20:59
#638698

Why doesn’t Rick run for mayor of the stinking onion?  Oh, thats right , he has ethics.  Sorry.

Login or register to post comments by nmewn
on Sat, 10/09/2010 – 20:59
#638699

“We dare the deflationists out there to look at the charts of coffee, barley, oranges, pork, cotton, rubber, iron ore, and tell us where is this much-hyped deflation…The right answer, of course, lies in one simple word – and as Santelli confirms what every Zero Hedge readers knows, it is “monetization.”

Whoop…der it is bitchez 😉

Login or register to post comments by Popo
on Sat, 10/09/2010 – 21:50
#638771

Deflation is hiding in the closet with his good pal “mark to market”.

Login or register to post comments by Fish Gone Bad
on Sat, 10/09/2010 – 22:23
#638814

Mish actually covered this in great detail.  The definition he has been using is a contraction in credit.  Generally this causes a decline in prices, and it certainly has for things that require credit. 

As far as foodstuffs go, I have been hitting a supermarket that is changing owners, so the new owner wants to get rid of all the “old food”.  I bought 34.5 oz cans of Springfield coffee for $1.99 each, 40 oz cans of Dennison’s chile con carne for $2.00 each, cases of bottled water for $1.99, 50 oz Tide 2X detergent for $3.99, 15 oz cans of (real) abalone for $2.99 each, 40 oz jars of peanut butter for $2.00, big jars of strawberry jelly for $0.79 each, 14-17 oz cans of Raid bug spray for $2.00 each, big cans of albondigas soup for $1.00 each (and they had a coupon for 55 cents off).

A month ago I picked up a Nissan D21 engine and trans for my truck for $300.  My truck has close to 250,000 miles on it and runs great.  I will eventually need one by 500,000 – 600,000 miles, so I was must planning WAY ahead.

Login or register to post comments by hugolp
on Sun, 10/10/2010 – 01:41
#638982

You can not change the definition of a word to win a debate and you can not base your ideas on random particular examples.

 

Seriously, heavy inflation will hit after QE2 and Mish is just playing with words.

Login or register to post comments by Popo
on Sun, 10/10/2010 – 05:25
#639044

Two responses: First off,  Mish isn’t changing any definitions of words.  The term “inflation” has been used for over a century to mean different things to different schools of Economics.  

Inflation can be used to describe the general effect of the expansion of the money supply:  Rising Prices.

Or it can be used to describe the expansion of the money/credit supply itself.   (This latter definition is the one used by the Austrian school, btw)

Furthermore, the limited definition of “inflation” which pertains only to rising prices was championed by Keynesians who of course would rather you not notice expansions of money and credit.   ie: Please notice the rising prices, not the shrinking value of the dollar which is entirely our fault.

 

More importantly:  (Second response)  There seems to be a very limited understanding on ZH of price-effects in a deflationary environment.

The layman’s understanding of pricing under a deflationary credit contraction is that prices ‘decrease’.  And that is mostly true.  But as we have seen throughout all historic depressions, while it may be “mostly” true, it is also very commonly not the case.  Why?  Because collapsing credit (and the associated capacity-overhang which defines deflations) causes implosions of industry, and such implosions of industry cause supply-chain disruptions.  Supply chain disruptions frequently create scarcities in a wide variety of related products whose respective demand-levels have not yet collapsed.  Such supply-chain disruptions frequently cause rising prices of specific goods and services in a deflationary environment.

Other increases in pricing occur from increased credit to specific industries, which can cause distortions in speculation (such as in commodities) and pricing. Such limited increases in credit, (and their corresponding distortions in asset pricing and speculation) are not representative of net monetary expansion.

This is not at all a reworking of the definition.  This is part-and-parcel of an understanding of the microeconomic effects of a macroeconomic deflation.

To all those who point to rises in granular pricing data and proudly conclude “inflation”, you are missing the forest for the trees.

Mish is not playing with words at all.  He knows his shit cold.   

 

 

p.s.:  If one wants to play the game of tossing out individual datapoints in an effort to win the inflation/deflation argument, then try this one on for size:

“Wages”.

Whoop…. ‘der it is!

 

 

Login or register to post comments by sushi
on Sun, 10/10/2010 – 05:28
#639051

 

 

+ 3600

Login or register to post comments by Hephasteus
on Sat, 10/09/2010 – 22:32
#638819

Deflations a nice fairy tail to drive people into cash so you can spread the debasement out far and wide and not have to pound idiots into paupers. Fed used to actually constrict money supply to start it off before debasing. Now they just bluff.

Login or register to post comments by Rogerwilco
on Sat, 10/09/2010 – 23:06
#638856

@Hephasteus

This inflation narrative only makes sense if wages rise along with prices. That is obviously not happening now, and with 15% unemployment it’s not going to happen anytime soon. Food and energy price increases will just reduce consumption for other non-essentials. The real economy (absent bogus government stimulus) will continue to deflate.

Login or register to post comments by tmosley
on Sun, 10/10/2010 – 00:34
#638924

lol, I guess food isn’t part of the real economy.  Only iPads and Detroit housing exist in the real economy.

Hyperinflation can easily happen with high unemployment and stagnant wages.  It happens all the time.  Just look at the history of any and every hyperinflation that has ever happened.  Sure, wages rise EVENTUALLY, but they never keep up.

Hyperinflation isn’t just really bad inflation, it’s a currency crisis.  You don’t have to have a lot of it to know that it’s worthless.

Login or register to post comments by quartshort
on Sun, 10/10/2010 – 00:49
#638937

Fast food is the new soup line. Lots of 99 cent poop sticks in a wrapper these days. Garbage gut bomb still goes for pocket lint.

Login or register to post comments by idoubtit
on Sun, 10/10/2010 – 01:31
#638971

This is a point I’ve been struggling with.  We’ve all heard about people in the Weimer republic showing up with wheelbarrows of cash to buy bread and stuff.  I can see the Fed influencing commodity prices, but I want to know when the wheelbarrow of cash is going to available to me.

In short, without wage growth and with declining credit, how are we supposed to pay for $140 oil?  This is a genuine question.  I think the answer is we don’t.  Because companies have no pricing power all Bernanke is going to do is to squeeze company profits.  If you want to sell me oil at $140, I’ll ride my bike.  The oil companies need to sell oil.  if nobody can afford to buy it, they’ll lower the price, plain and simple.

Login or register to post comments by Hephasteus
on Sun, 10/10/2010 – 02:23
#639002

This isn’t going to be like weimar. This is going to go down EXACTLY like the russian collapse. Complete with government killing it’s own citizens to regain power. This is subjugation of every nation. Russia was just the 2nd hardest super power to thrust into poverty. The problem is the dog on a leash phenomenon. You take an aggressive dog and leash them up to attempt to control them and the second they get free they bite someone. Russia had a lot of pent up dogs on leashes because the kgb was always there suppressing people. America not so much. They’ll probably collapse the place waiting for it to get bad enough that people beg them to come in and take back control. It’ll probably backfire and 2 years after they collapse the place it will be as clean as a whistle.

Login or register to post comments by M.B. Drapier
on Sun, 10/10/2010 – 02:01
#638995

The obvious question to ask here is what proportion of the consumer basket goes on food as opposed to more credit-sensitive things.

Login or register to post comments by Burnbright
on Sun, 10/10/2010 – 01:04
#638947

@ Rogerwilco,

Prices can rise without an increase in the money supply or an increase wages. A decrease in the supply of goods and services also drives up the prices of things. Which is why hyperinflation is actually more likely to occur during massive unemployment. Do me a favor and go check the label for point of origin of everything you buy and figure out for yourself how much crap we don’t supply ourselves with and how that would effect the price of things you wanted to buy.

Login or register to post comments by title examiner
on Sun, 10/10/2010 – 00:15
#638913

Rapid deflation leads to hyperinflation as scales of economy unravel and markets fall lower than companies can produce at or meet.  They go BK.  Successive systems fail to this and the ability to supply collapses.  Rebuilding supply proves more expensive than anticipated.

Governments attempt price controls to prevent this sudden shift from occurring.  I haven’t ever found a place where it worked.

 

 

 

Login or register to post comments by 99er
on Sat, 10/09/2010 – 21:01
#638702

(Reuters) – Emerging powers won a battle on Saturday for heightened IMF scrutiny of rich countries’ economic policies as world financial leaders sought to defuse mounting tensions over currencies. | Video

Login or register to post comments by zen0
on Sat, 10/09/2010 – 21:05
#638705

Americqns have way more to eat than they need. There could be a lot of resistance to higher food prices. Supply vs Demand. Food nazis may have to deal.

Login or register to post comments by New Revolution
on Sat, 10/09/2010 – 21:07
#638711

A Revolution is a process, the first of which is the ‘turning of the intellectuals’, not that I’d place Santelli there, but moreso than a Brad Pitt (who called for Capital Punishment for those responsible for the BP Gulf disaster) and probably in line with the yet unseen performance of  Matt Damon in ‘INSIDE JOB’, ie, the people most sheople look to as an authority, or someone with an inside look which they respect.   As that number turns the actual turnover inherent in a Revolution occurs rapidly.   Then the real battle begins, because there remain factions to fight over the seat of power, to govern over what is left of what historically, is a bankruptcy of government which is as good a definition of a Revolution as there is.  

The point being is that we are rapidly approaching this time where the ‘intellectuals’ turn against the government and the government loses its authority to govern.   Its a race against time now, to disseminate the problems and solutions for the sheople in mass in order to give definition to a direction that will lead them out of the quagmire and support the winning ticket.

There will be blood, but hopefully, provided we can keep the battle confined to the ballot box, it will be minimized.   But as I said,… we’re running out of time.   The peaceble legal transfer of the reigns of government must occur by the elections in 2012 which is a pretty high order.

I’m sure we’ll all do our best and know our duty. 

Login or register to post comments by jeff montanye
on Sat, 10/09/2010 – 22:04
#638792

good thoughts.  imo the greatest accomplishment of barack obama was adopting the worst policies of george w. bush and making them even more unpopular, in part by allowing republicans to hate them without fear of disloyalty.

Login or register to post comments by New World Chaos
on Sun, 10/10/2010 – 00:38
#638928

Obama also got a large chunk of the left to hate the Democratic leadership.  With control of the White House and Congress, there is nobody else to blame for creeping fascism, Obamacare, kleptocracy, etc.  Little people on both the left and right now see the two-party system as a fraud and a distraction set up by the puppetmasters behind the scene.  This realization is a necessary condition for revolution.

Login or register to post comments by zaknick
on Sat, 10/09/2010 – 23:38
#638884

government loses its authority to govern

 

Ha! You must have no idea who you’re dealing with here. They’ve killed presidents, congressmen, anybody who gets in their way and they have the guns. These people have been committing ethnic cleansing, genocide, crimes against humanity and the peace and you really think they’ll go peacefully into that good night?

 

I don’t think so!

 

 

 

Login or register to post comments by Dapper Dan
on Sun, 10/10/2010 – 06:06
#639062

New Rev.

The point being is that we are rapidly approaching this time where the ‘intellectuals’ turn against the government ..

Don’t you mean ‘where the intellectuals get rounded up and disappear’ ? 

Login or register to post comments by tmosley
on Sat, 10/09/2010 – 21:07
#638712

Shortages, bitchez.

Canned ham buried in the back yard is looking pretty good if this is really what is coming.

Login or register to post comments by frankTHE COIN
on Sat, 10/09/2010 – 21:07
#638713

Bernanke is YURI.

Login or register to post comments by zaknick
on Sat, 10/09/2010 – 23:34
#638880

Berwanker is:

 

Login or register to post comments by doolittlegeorge
on Sat, 10/09/2010 – 21:11
#638717

interesting thoughts here but simply not possible.  i did try and make a joke about “the Fed’s using price controls to keep housing prices up” but it was only picked up by some black dude interviewing a highly brilliant  Shill from Yale on SA.  In short “you can’t have price controls and bail out your real estate buddies.”  More than that “you have trillion dollar deficits”!!  Oh, yeah–and did i mention “foreign borrowers control most of our debt”?  Perhaps it’s too blunt to say “this is the shit sandwich for your vote” but frankly “this is the shit sandwich for your vote.”  And of course I include “your non vote, too” which is the very definition of pure evil in my book.  Again WHO THE FUCK IS GOING TO PAY FOR THIS STUFF.  Raising taxes won’t work.  Flattening them might–but that’s a moral issue so that won’t happen.  You can begin rampaging through…like Sherman through…

Login or register to post comments by hungrydweller
on Sat, 10/09/2010 – 23:35
#638881

Yes but the Fed is now 2nd on the list of owners of our debt.  With one new round of QE, the Fed will be the largest owner of our debt and the Chiinese will really be in a pickle.  Fish or cut bait bitchez!

Login or register to post comments by Apostate
on Sat, 10/09/2010 – 21:13
#638720

It’s also possible that the USG will just default. From current posture, however, it’s totally unclear as to what the results of that will ultimately be.

You can hyperinflate and destroy the currency or default and cause trading partners to revolt… and destroy the currency. 

Login or register to post comments by espirit
on Sat, 10/09/2010 – 21:24
#638735

But doesn’t everyone owe the US more than we owe them, except for maybe China?

Default on China? Trade stops, and the lights go out. Do we even make light bulbs here anymore?

Login or register to post comments by Apostate
on Sat, 10/09/2010 – 21:33
#638749

Either way, it’s a default. What’s happening right now is a selective monetization program with trial balloons floating for large scale monetization programs.

China has an interest in maintaining the status quo for fear of social unrest at home. Theoretically, the US could negotiate some kind of resolution with China. Unfortunately (or perhaps fortunately from the perspective of liberty), our government is resolved to piss them off as much as possible during this process.

Login or register to post comments by tmosley
on Sun, 10/10/2010 – 00:40
#638929

Hahaha, where have you been for the last two decades?  The US owes everyone and has very little in terms of foreign reserves of any type other than a rather large alleged gold hoard.

Login or register to post comments by Dapper Dan
on Sun, 10/10/2010 – 06:20
#639065

I have been looking for construction related items that are only made now in China and not manufactured in any quantity in other countries.

Have readied a list of those items and am prepared to buy quantities of them at the first sign of trade stops.

Sheetrock Screws Bitches!

  

Login or register to post comments by Rusty Shorts
on Sat, 10/09/2010 – 21:14
#638721

“Oil and Gold never travel in the same direction”

Login or register to post comments by jeff montanye
on Sat, 10/09/2010 – 22:12
#638801

1973 to 1980 (up)?  1980 to 1999 (down)?  2000 to 2007 (up)?

Login or register to post comments by Double down
on Sun, 10/10/2010 – 00:07
#638907

False friends

Login or register to post comments by Atomizer
on Sat, 10/09/2010 – 21:15
#638722

Open your wallet and grab a FRN.

This note is legal tender for all debts public and private.In God WE Trust.

Faith based currency is being fucked over as it has in the past & future debasement cycles. History repeats.

People still don’t get the joke being played on them. You must stop this madness before it becomes your very life. We can only warn, you need to react

http://www.you.tube.com/watch?v=EgMSe_0o9Bo

Login or register to post comments by doolittlegeorge
on Sat, 10/09/2010 – 21:57
#638781

if you’re a town judge or even a big city one you get the joke.  the word “legal” does appear and “it ain’t funny.”  now smokin’ a joint while riding a motorcylce with a monkey ridin’ beach while passing the cops “in their usual location” and flippin ’em off…THAT’s funny.  at least i thought it was funny until…

Login or register to post comments by Rusty Shorts
on Sat, 10/09/2010 – 22:03
#638794

 – “interest bearing debt instrument” = FRN = legal tender;

 

 – so, what is “Lawful Money”?

Login or register to post comments by hugolp
on Sun, 10/10/2010 – 01:46
#638987

Anything two people choose to use as money.

Monopolies are bad. They are bad in food, clothes, computer and the rest, including money.

Login or register to post comments by Alchemist
on Sat, 10/09/2010 – 21:17
#638727

This is what no inflation looks like despite occasional rants on price action in corn and soy beans:

 

http://www.bls.gov/cpi/cpid1008.pdf

Login or register to post comments by traderjoe
on Sun, 10/10/2010 – 00:24
#638917

Are you really using the BLS on ZH to try to prove a point? 

Spend some time reading up on the CPI methodology – and how it has changed over time. Geometric weightings, home equivalent rents, etc. 

Go visit shadowstats.com and learn a little more about the lies, damn lies, and government statistics. 

Login or register to post comments by tmosley
on Sun, 10/10/2010 – 00:48
#638936

Hey, you’re an alchemist, so I guess that means you can turn iPads into bread, so real inflation doesn’t matter much to you.  To us normal humans who have to eat edible food, it means poverty is creeping into the ranks of the middle class like a killer in the night.

Want to pay less than two day’s salary for a loaf of bread?  There’s an app for that (maybe, for now).

Login or register to post comments by williambanzai7
on Sat, 10/09/2010 – 21:26
#638736

Now that we have jumped the bailout/moron hazard Rubicon, why not throw centralized economic planning into the pot. Yum yum!

Login or register to post comments by traderjoe
on Sun, 10/10/2010 – 00:27
#638920

Maybe a picture would make the point? 😉

Enjoy the graphics WB7, glad you’re a contributor now…

Login or register to post comments by Missing_Link
on Sat, 10/09/2010 – 21:26
#638737

Amazing move in DAG on Friday.  18% in one day?  I’ll take that.

http://www.google.com/finance?q=dag

Wonder if this is the start of something bigger.

Login or register to post comments by Mitchman
on Sat, 10/09/2010 – 21:31
#638746

It’s only a matter of time before the “speculators” start getting blamed for higher food prices.

Login or register to post comments by scatterbrains
on Sat, 10/09/2010 – 21:44
#638764

why can’t it be a sort of flanking attack by those countries getting screwed by the fed ? They can buy dollars, they can also conspire to buy ags/softs/metals to try and discourage BB and the ink jets no ? How much does it take to move those more illiquid markets? Imagine lock limit up days for weeks and weeks until BB backs off..  just saying

Login or register to post comments by Mitchman
on Sat, 10/09/2010 – 21:51
#638774

Excellent thought.  But how would they not also be hurting themselves in the process?  Knowing their strategy would they be hedged?

Login or register to post comments by Hedge Jobs
on Sat, 10/09/2010 – 22:52
#638839

the collapsing US$ is abit of a natural hedge. for every other country outside the US the current rise of hard and soft comods is not really an issue just yet. yes, they are paying more in USD’s as the prices rise but as the USD is collapsing against their own currency they are not really paying any more for them. You are really only f*cked if you are an end buyer paying USDs (US citizen / business) or pegged to the USD. watch the chinky chonks revalue the yuan pretty quickly if comod prices in USD’s continue to soar.  

Login or register to post comments by anvILL
on Sun, 10/10/2010 – 03:13
#639021

> they are not really paying any more for them.
This is simply not true.
The charts on the right half are (mostly) commodities in USD.
The charts on the left half are commodities in JPY.

http://www.fuji-ft.co.jp/chart/frame1.htm

The commodities market is much more smaller than the currency market, so if people start buying commodities as a way to hedge the devaluation of the most liquid currency in the world, it will mean higher price of commodities everywhere in the world.

Login or register to post comments by doolittlegeorge
on Sat, 10/09/2010 – 21:59
#638786

BB is going to be out of job soon. This “party” is just gettin’ started.

Login or register to post comments by collegepunk
on Sat, 10/09/2010 – 21:54
#638778

haha, seriously

Login or register to post comments by anarkst
on Sat, 10/09/2010 – 21:26
#638738

It seems to me that this world could get along pretty darn well with very little credit.  I think we should give it chance.  “Progress” will just have to slow down a bit.  No big deal.

Login or register to post comments by jeff montanye
on Sat, 10/09/2010 – 22:16
#638805

and it might make it a bit less likely that we will drown in our own poop.

Login or register to post comments by traderjoe
on Sun, 10/10/2010 – 00:31
#638923

The only reason “growth” is worshiped is because it supports the global Ponzi (growth and/or inflation prolong the Ponzi) – therefore it is ingrained in the indoctrination. Global stability or even ‘rationalization’ would be healthy for the Earth, economies, and communities.  

Login or register to post comments by gwar5
on Sat, 10/09/2010 – 21:30
#638744

Thanks, I like both Rick and Rickards. The more insights the better on such things. The picture is becoming clearer. I still ponder the unintended global consequences. 

We hold our collective banana republic breath.

Login or register to post comments by Edwardo
on Sat, 10/09/2010 – 21:32
#638747

“A Revolution is a process, the first of which is the ‘turning of the intellectuals’, not that I’d place Santelli there, but moreso than a Brad Pit.”

Brad Pitt an intellectual?  As for capital punishment for those who are responsible for the Gulf catastrophe, one wonders if Mr. Pitt includes the after the fact coverup by The Obama Administration.

Login or register to post comments by knukles
on Sat, 10/09/2010 – 23:09
#638852

Interesting, I had the same thought.  Brad Pitt and Matt Damon as intellectuals.  Straight out of the neo-modern, ex-Liberal, still Cadillac communist, Newly Self Defined as Mature Optimist, Income Redistributative, Ego Soaked Hollywood far Left Coast Central Casting Cattle Call.  All and all Wholly Infuriated and Pissed off at the Past Gubamint which is Blamed for the Continuation and Escalation of Past Gubamnit Policies by the New Gubamint, which is No Different than Any Other Group yet seen Slopping at the Public Trough whilst Further Abrogating Citizen’s Rights.

Yessireee.  Now that’s an intellectual.  One of the Financial Elite Supportive of the Delusions and Diversions Flooded Upon the Masses by MSM’s Tabloid Silicon Enhanced Propaganda.

If there are Alien Beings surveying the Earth, reading all of our electronic emissions, considering its demolition to make room for an Intergalactic Truck Stop, they’d have no compulsion whatsoever deciding upon our immediate demise.  

Intellectual, my ass. 

   

Login or register to post comments by RoRoTrader
on Sat, 10/09/2010 – 23:24
#638871

knuckles…….you have some serious writing talent happening…….wow!

the flip side of the adoration that gives currency to the ‘intellectualism’ of the actors guild you describe also happens to be the lowest common denominator, which therefore puts you my friend light years away in the night sky……..not a bad place to occupy.

brad pitt for president…….

brad pitt nominates matt damon to make a film to save America……….the sequel; save the world.

The FED version; save the consumer……

why bother……..let the fucker burn.

Login or register to post comments by MilleniumJane
on Sun, 10/10/2010 – 01:22
#638962

Yes, but it was still a good point.  Watch for it happening any second.  We will begin to see exactly who is in the pockets of the elite and who has the ethics and balls/ovaries to help stop this shit.

 

 

Login or register to post comments by merehuman
on Sun, 10/10/2010 – 01:52
#638991

butt think

Login or register to post comments by tmosley
on Sun, 10/10/2010 – 00:50
#638940

What, you mean Brad Pitt isn’t Tyler Durden?

Damn, my world is shattered.

Login or register to post comments by breezer1
on Sun, 10/10/2010 – 06:52
#639082

brad pitt an intellectual? why is he even mentioned here? he is a dolt.

he belongs to the media. and who are they?

what part of ‘ thou shalt not kill ‘ is giving you trouble?

Login or register to post comments by collegepunk
on Sat, 10/09/2010 – 21:51
#638775

Brilliant interview

Login or register to post comments by monopoly
on Sat, 10/09/2010 – 21:59
#638787

Rick and Diana Olick are just about the only times I take the idiot channel off of mute. When these two decide to leave it is lights out for the worst business channel on the planet. The end game is known, oh, 1/2 my kingdom to get the timing right. What a disaster this is going to be.

Login or register to post comments by max2205
on Sat, 10/09/2010 – 22:01
#638789

My head hurts. Ben can’t force a recovery in housing unless he burns down all the empties. Corn don’t go up cause there’s too much corn

I call BS on this theory and that he might think this would work. BS.

Login or register to post comments by RockyRacoon
on Sat, 10/09/2010 – 22:20
#638807

Santelli might not be much longer on CNBC.  Remember Ratigan.

The truth will get ya run off from the pump-n-dump network.

Login or register to post comments by SoCalBusted
on Sun, 10/10/2010 – 00:35
#638925

I’m shocked he has made it this far, what with all the Tea Party talk and what not.

I stopped watching CNBS after GE squished Kudlow and when there were fewer appearances by Joe Battipaglia.

Login or register to post comments by TheGoodDoctor
on Sun, 10/10/2010 – 01:13
#638956

I know I keep waiting for Rick to get the axe.

Login or register to post comments by Conrad Murray
on Sun, 10/10/2010 – 02:49
#639016

They won’t get rid of Rick unless he does something on air that can’t be forgiven.  They know he’s about all they have over there.  The hosts salivate every time they get Santelli and LIESman on at the same time.  They do what they can to taunt them into battle.

Login or register to post comments by breezer1
on Sun, 10/10/2010 – 06:56
#639083

the ‘ tea party ‘ is all bullshit and will stay bullshit until it only offers support to those who sign a document saying that the country will return to a government owned hard currency and they will resign if they don’t support action to this end as soon as they are elected.

Login or register to post comments by Gloomy
on Sat, 10/09/2010 – 22:23
#638813

Broken BRICs
by Martin HutchinsonOctober 04, 2010

With Brazil’s election apparently a big victory for the leftist candidate Dilma Roussef, Russia facing increasing political and economic uncertainty, India in the grip of spiraling inflation and even China’s growth prospects seeming dimmer, the great growth story of the last decade is acquiring a few dents. For the first time, it is reasonable to ask: are the BRICs broken?
 
Brazil is the most straightforward case. Its finance minister Guido Mantega this week denounced the “currency war” he saw developing among the world’s major economies, by which each country attempts to devalue its currency to reflate its economy. Such a war was a minor but contributing factor in the Great Depression but at present, since all the major economies seem likely to succeed in their devaluations, it will merely cause a nasty burst of global inflation. In any case, Mantega’s true motivation in proclaiming a currency war was to protest the Brazilian real’s rise above Rs.1.70=$1, and divert the Brazilian electorate from the country’s true economic situation ahead of Sunday’s election.
 
The real is rising because of the mass of hot money flowing into Brazil, attracted by its apparent rapid growth and commodities wealth. In a well-run economy like that of Chile, currency inflows of this kind are sterilized by the government creating a rainy-day fund, which can be used when commodity prices drop back. However that requires the government to keep public spending under control. As Mantega perfectly well knows, being finance minister, Brazil has done nothing of the sort. While official public spending has been kept nominally under control, lending by the state development bank BNDES and investment by Brazil’s 118 public sector companies, financed by borrowing, have been allowed to explode ahead of Sunday’s election – both are up 30-40% on the previous year.
 
The Brazilian public lulled by the popularity of outgoing President Luis Inacio Lula da Silva and apparent prosperity, are giving their votes to Dilma Roussef, Lula’s former development minister, an avowed Marxist who believes in the rapid expansion of state control. You can already see the result in the Petrobras share sale, in which $42.5 billion of the nominal $70 billion of proceeds was paid to the government in return for overpriced oil rights which Petrobras had thought it already owned. This kind of seizure, accompanied by meddling, can be expected to affect Brazil’s other resource behemoths going forward, even those nominally in the private sector such as the iron ore giant Vale and the forest products titan Fibria.
 
With Roussef in charge, far from being an emerging world superpower, Brazil will relapse fairly quickly into its habitual third world chaos. The respected central bank governor Henrique Meirelles, whose monetary policy of double-digit interest rates has kept the Brazilian economy stable throughout Lula’s reign, is unlikely to last long. Once he goes interest rates will drop and the inflationary forces will become overwhelming.
 
If natural resource endowments per capita are overwhelming as in Argentina and Venezuela, bad governments can combine with a resource boom to produce a semblance of normality, albeit with gradually worsening living standards, violation of property rights and soaring inflation rates (suppressed in official statistics.) A country with successful private sector companies and perhaps a private pension system can provide loot for the socialists and mafiosi for several years, as Argentina has shown. However Brazil’s economy is less dominated by natural resources because of its immense population; hence the descent into chaos is likely to occur more quickly. As for the country’s fate if and when the current resource bubble bursts, it does not bear thinking about.
 
Russia, next, is a much simpler case, economically if not politically. Its economy is more resource based than Brazil’s because of its oil and gas wealth. However its propensity to use its gas resources as a political bludgeon has caused its potential customers to search frantically for alternative sources of supply, and the availability through new technology of massive shale gas deposits in Poland and China suggests that customer freedom is not far off.
 
Economically, the Russian economy will survive, though hardly be a beacon of growth while the relatively moderate albeit corrupt President Medvedev remains in power.  The Economist team of forecasters project growth just above 4% in 2010 and 2011, but those two years combined will not make up for the 7.9% drop in GDP suffered in 2009. Then in 2012 the presidential election allows the probable return to power of Vladimir Vladimirovich Putin. Putin is a true wizard at the nastier forms of power politics, but his economic understanding is negligible; he has turned Russia into a kleptocracy for his cronies in which independent forces who achieve wealth but do not make their escape to Knightsbridge are likely to end up in jail with their property stolen.
 
Russia under a renewed Putin regime is Venezuela without the nice weather and with a more effectively aggressive foreign policy. Countries of the former Soviet Union should rightly fear Putin’s efforts to restore it. The domestic economy will be a swamp of inflation, expropriation and declining living standards. Oil output, no longer buoyed by major international investment and technology, will follow the same path of accelerating decline as has Venezuela’s. In the short term, Russia is an important enough oil supplier that this may prop up global oil prices. In the long term, alternative energy sources will be found and Russia’s oil export earnings will go into terminal decline.
 
The other two members of the BRIC quartet, India and China, would benefit from a decline in commodity prices, but they have other problems. India has enjoyed rapid growth for the last decade thanks to the reforms brought in by Atal Bihari Vajpayee in 1998-2004. However the foolish ingratitude of the Indian voters in 2004, replacing his government with the Congress party, responsible for half a century of stagnation, and then re-electing Congress in 2009, is now bringing its just reward. Prime Minister Manmohan Singh is a gentleman, and in a mild way reformist, but he has no effective control over the corrupt leftist barons who control the Indian government, led by the odious Gandhi family and their stooge, finance minister Pranab Mukhergee, whose previous term as finance minister was in 1982-4, the most benighted era of Indira Gandhi’s state-controlling quasi-dictatorship.
 
The chaos over the Commonwealth Games venue has brought Indian corruption to the notice of the western public, but it has always been notorious to those doing business there. Under Mukhergee, the “permit raj” is back in full operation, with public spending soaring out of control and a public sector deficit this year, national and local of over 10% of GDP, in a year of 8% growth.   Inflation has been running well into double digits for more than a year, while interest rates are held down artificially low at around 6%. India is due for a gigantic blow-up, with either hyperinflation or a massive foreign exchange crisis, when enthusiastic foreign investment can no longer stem a growing current account deficit. Like Brazil, India needs to rein in its public sector, but shows no sign of doing so.
 
Unlike, Brazil and Russia, where political and cultural norms currently seem insuperable, India has a reasonable chance of long-term growth and prosperity – but it must go through an economic crisis first, in order that the Indian electorate can come to its senses and elect a reasonably pro-market, less corrupt government. Since, absent a major crisis, its first chance to do so is only in 2014, the current outlook must be negative.
 
Finally there’s China, the only one of the BRICs where prospects remain reasonably good. Even here the Asian Development Bank (ADB) caused a stir by suggesting that China’s growth rate could slow sharply from its current 9-10% to 5.5% per annum over the 2010-2030 period. That contradicts Goldman Sachs’ forecast of the Chinese economy surpassing the U.S. economy by 2027, pushing that momentous cross-over point out past 2040. The ADB’s rationale is that the capital deepening of the Chinese economy has passed its most productive point, and that the country’s reserve of working-age labor will grow only slowly in the years ahead because of low birth rates after 1980.
 
That looks right, and of course the effect of lower birth rates is wholly positive in a country of 1.3 billion people whose living standards have only recently risen above subsistence level. An aging China is a more stable China, less likely to engage in military adventurism because it will not have immense supplies of surplus youth for its armies.
 
There are other reasons to expect Chinese growth to slow. Because of its size, the country has forced up commodities prices worldwide, a factor that itself will produce consumer price inflation and possible resource shortages. Further, the immense Chinese export machine is running into increasing resistance in the West. With European and U.S. growth subdued for several years, it is likely that various forms of protectionism and “voluntary restraint” will restrict its further growth. China must increase domestic wages and thereby consumption, but by doing so it will find its export industries undercut by cheaper competitors in India and elsewhere. Finally, China’s banking system, state sector and commercial real estate industries are a mass of corruption and undeclared losses.
 
The ADB’s estimate of 5.5% growth for China over the 2010-2030 period is probably on the high side. China’s trajectory is likely to be one of financial crisis followed by several years of very slow growth and adjustment, followed by a much healthier “catch-up” period. Both China and India probably have a healthy long-term future, but it is not quite as untroubled as current markets predict.
 
For the West, the BRICs’ troubles will be something of a relief – their extraordinary growth in the last few years has caused huge stresses in Western economies that require time to adjust. The process of wage differential shrinkage between western and emerging markets will continue (there are, after all many emerging markets beyond the BRICs, most of which have not yet enjoyed their fastest periods of growth) but maybe at a slightly slower pace. Provided interest rates are regularized within the next year, so that saving in the West can resume and its de-capitalization cease, the period of BRIC setback can be one of global rebalancing, in which the inevitable tensions of a changing balance of global economic power can be defused. Certainly two, maybe more of the four BRICs are by no means broken, but they will all suffer some damaging blows in the years ahead.
 
Naturally, those who have rushed ahead too fast to embrace the new world of the BRICs will lose their shirts. But then that is the fate of pioneers; as the immortal Saki said: “It’s the early Christian that gets the hungriest lion.”

Login or register to post comments by eigenvalue
on Sat, 10/09/2010 – 22:59
#638846

If anybody looks at China closely and meticulously, he will know China is a gigantic bubble and sordid scam.

Login or register to post comments by Rusty Shorts
on Sat, 10/09/2010 – 23:18
#638868

 – talking about a scam;

http://www.the-privateer.com/paper.html

Login or register to post comments by geminiRX
on Sat, 10/09/2010 – 22:24
#638815

Mish’s comment in 3…2…1…

Login or register to post comments by Apostate
on Sat, 10/09/2010 – 22:35
#638823

Mish seems to be flipping, at least to me.

The deflation thesis required that you take Ben at his word when he said that he wouldn’t monetize.

That’s line’s been crossed in a big way, with more to come…

Login or register to post comments by RoRoTrader
on Sat, 10/09/2010 – 23:04
#638854

Yea, and Bullard may be thinking he has been fucked too……..at least if you listen to what he said on Friday.

Login or register to post comments by Mark Noonan
on Sat, 10/09/2010 – 22:25
#638817

Or maybe they are just getting people to price up commodities so that the really connected can sell what they bought last year for a huge profit, then they’ll allow the normal economy to take its course, with their wealth fully protected?

 

 

Login or register to post comments by primefool
on Sat, 10/09/2010 – 22:55
#638844

The big money, the Players only need to do one thing to grab more and more of the good assets. Create volatility.
because, the little guy cannot stomach a 10% or 20% decline. The little guy will panic out and sell if his investments decline 10-20% quickly.
The hedge funds also are like the “little guy” in the sense they have a very low threshold for pain. So they will also get shaken out.
So- for instance if you wanted to buy more gold off these shallow-pocket players – all you have to do is engineer a 20% “crash” and they will all sell their gold to you.

Login or register to post comments by MilleniumJane
on Sun, 10/10/2010 – 01:26
#638968

I agree.  The smart people will continue to hold onto their precious metals while the gamblers throw their hands.

Login or register to post comments by primefool
on Sat, 10/09/2010 – 22:31
#638821

It is nonsense to assume that as bond yields go towards zero, the price of houses must go up. First of all there are those property taxes, and insurance premiums. On a 500,000 house, typical property tax and insurance would be about 15,000/year. The capitalized cost of this will skyrocket as discount rates tend to zero.
ie. If you ask yourself how much you need to invest in treasuries , so that your investment will pay all property tax and insurance on your house for the rest of your life – that number, the number to buy your freedom from tax slavery; the number to ensure that some goons wont throw you out on the street – out of your “fully paid for” house when you are 75 years old; – will skyrocket.
At todays yields around 3%, to generate 15,000 in interest , you will need to put aside 500,000 in treasuries.
So, interestingly, even as your mortgage payments go down ( assuming you can refinance), the capitalized cost of your tax obligations will skyrocket.

Login or register to post comments by primefool
on Sat, 10/09/2010 – 22:40
#638827

Oh , I was assuming you could earn 3% (after tax) on long term treasuries to “defease” ( look it up) your property tax burdens. Thats probably a bit too high in today’s market – more like 2% .
So, on your 500,000 house, you will need to set aside $750,000 in long term treasuries that will earn the 15,000/year after tax to pay your property taxes in your old age.
Oh, and as yields go down even further, say to 1% after-tax, you will need to save and set aside $1.5 million to earn enough after -tax interest to pay your property taxes.
See – where Iam going?
And – you will probably need to save this $1.5 million during a time when your cost of living doubles – food, oil, etc.
No sir, inflation of the bernanke kind is an absolute killer for 90% of the population. Its the one hing people should fear more than anything else – if they used their brains and some 6th grade arithmetic ( look it up).

Login or register to post comments by soesbandit
on Sat, 10/09/2010 – 23:19
#638869

No amount of money will free your mind.  The simple act of paying is all they want.

Login or register to post comments by traderjoe
on Sun, 10/10/2010 – 00:49
#638938

Yes, it does not make sense. No, it will not work. Millions will die from food shortages, riots, etc. around the world. BB and the Fed do not care. They are a privately-held corporation that will do whatever it takes to maintain their control over ‘our’ money. Even if it is only to buy 6-12 months of time.

Fractional reserve banking is mathematically destined to fail as all geometric/exponential growth curves are. We are at the end game (for this iteration). They have had a terrific run of almost 100 years of skimming from the top and controlling virtually everything.

This will not end well, but they are not our friends. They are not looking out for us. They are sociopaths looking out for only themselves…

Login or register to post comments by robertocarlos
on Sat, 10/09/2010 – 22:49
#638835

I think 32$ an ounce is a fair price. 😉

Login or register to post comments by Jake3463
on Sat, 10/09/2010 – 23:17
#638867

Price controls lead to shortages, we are truly following the Soviets.

Soon we will have items in display in our stores, that no one can actually buy.

Login or register to post comments by JR
on Sat, 10/09/2010 – 23:45
#638889
Quote :

“Inflation is theft of labor by dilution. One should understand that the taxation/enslavement/inflation/property-seizure axis has one common denominator and one goal only: State seizure of labor…

“After centuries of government meddling in coinage and debasement, the stage was set for the introduction of the least understood and greatest scam in the annals of history; governmentally issued paper.

“When governments place their name on money, they are placing their name on the most generic form of private property, on the most commonly exchanged commodity.  This is no different than if government placed its name on all clothing, houses or humans.  The most damaging consequence of this action is that governments have taken control of the most exchangeable form of life, which is the most important aspect of money and its relationship to trade.  Money makes the real medium of exchange more convenient.  Based on this fact, government has placed it name on man’s greatest physical instrument of morality.  It not only captured the most liquid form of productive labor, it imposed its name on the atmosphere that surrounds the free and honest dealings among men.” – Hugh A. Thomas, STORED LABOR A New Theory of Money

And no one except savers blinked an eye when Gluskin Sheff economist David Rosenberg agreed that the Fed should target and rob savers with ZIRP, i.e., the prime source of sound money and stored value, because by not doing so “the stock market would be hurt.”

Well, didn’t those savers store their labor in Federal Reserve Notes that are issued at the discretion of the Board of Governors of the Federal Reserve System? Well, apparently what the governors issue with their name on it, the governors can take away.

Login or register to post comments by Mercury
on Sat, 10/09/2010 – 23:47
#638892

Rich echoes what I’ve been complaining about recently – that halting foreclosures will severely retard the critical de-leveraging and capital re-allocation process plus it rewards bad economic decision making – causing the prudent and honest to feel like fools. 

XYZ Bank  doesn’t have a good title to the defaulted mortgage? Find out who does.

Login or register to post comments by Jake3463
on Sat, 10/09/2010 – 23:59
#638903

Still doesn’t solve the MBS problem.

Login or register to post comments by Mercury
on Sun, 10/10/2010 – 06:19
#639064

If the MBS trust or whatever never had a good title to the mortgage, back up enough steps until you find out who the last good holder was – or unwind the MBS or both. It’s complex but it’s not impossible. The original mortgage was valid – maybe that will be the last time everything was legit, maybe not.  Put the girl with the dragon tattoo on it.

Login or register to post comments by Rodent Freikorps
on Sat, 10/09/2010 – 23:51
#638897

I have an idea.

Just burn it all to the fucking ground. Less time and less pain overall.

Login or register to post comments by zaknick
on Sat, 10/09/2010 – 23:54
#638901

O/T

 

@EVERYMAN

 

Dude, I’m with ya’, buddy!  Death to the fascists!

 

It’s us or them if you folks didn’t know it yet!

Login or register to post comments by SoCalBusted
on Sun, 10/10/2010 – 00:27
#638921

My kids have even figured it out…

“Dad, we are paying the same price for stuff but getting less of it than before”

When they could enter a grocery store and walk on their own two feet, I told them to not only look at the price but also quantity and better yet, price per quantity.

 

Login or register to post comments by MilleniumJane
on Sun, 10/10/2010 – 01:39
#638978

Yep.  For instance, I bought some store brand ice cream at our national chain grocery store about 4 months ago.  Didn’t notice until I got home that what I thought was a half gallon of ice cream had decreased to a quart and a half for the exact same price.  The packaging was very clever too.  Exactly the same as the old 1/2 gallon, but just a tad shorter.  I had just gotten off work and was in a hurry to get the shopping done and go home to make dinner so I didn’t notice it in the store.  I wondered if anyone else had noticed this or if everyone is so stressed out that it’s the least of their problems. 

Login or register to post comments by SoCalBusted
on Sun, 10/10/2010 – 03:00
#639017

That’s what they prey on.  You’re in a rush and just looking at the price.  Then you read the container when you get it home – it reads just a few ounces less than the standard sizes: 8oz, 16, 32, 64, etc.

All the while the government keeps on saying there is no inflation. 

Login or register to post comments by kengland
on Sun, 10/10/2010 – 00:28
#638922

“We dare the deflationists out there to look at the charts of coffee, barley, oranges, pork, cotton, rubber, iron ore, and tell us where is this much-hyped deflation…The right answer, of course, lies in one simple word – and as Santelli confirms what every Zero Hedge readers knows, it is “monetization.”

 

What a fucking joke…you do know that inflation/deflation is the result increase to or decrease in money supply right? You know…Mprime-M3 and credit…that stuff. If not, then no wonder that the CPI is still debated. Too many bafoons buying into the notion that price is a function. However, I will take the bait and ask you where global wage rates are about right now? I know, I know…labor probably represents only a fraction of total finished price. Fuck it!

Login or register to post comments by JR
on Sun, 10/10/2010 – 01:10
#638954

There is more than one way to look at inflation. And who would know what Bernanke is doing with M3, even if he hadn’t discontinued “reporting” it? Whatever, central banking is nothing more than centralized control of labor. To tell us “the money supply is being inflated” tells us nothing on the surface. To understand inflation in the context of life, we should say “money’s value is being diluted.”

In economics,  inflation is a rise in the general level of prices of goods and services in an economy over a period of time. When the price level rises, each unit of currency buys fewer goods and services; consequently, inflation is also an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy. A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time. – Wikipedia, Inflation

Excerpt from John Williams’ Shadow Government Statistics (SGS) September 17, 2010, Newsletter Commentary

U.S. Economy Continues to Falter as Investor Concerns Mount as to Soundness of U.S. Dollar.  Relative economic, political and fiscal strength and stability are key supports for any currency, and the U.S. dollar increasingly is in trouble.  The latest numbers show faltering economic activity and mounting criticism of the sitting government (weak presidential approval ratings often lead dollar weakness). Presumptions of ongoing economic “recovery” are vanishing, and fears are increasing as to what the federal government and the Federal Reserve will have to do in order to maintain systemic stability.  While actions taken may provide short-lived relative stability, the cost of same will be an extreme inflation problem…

Alternative Consumer Inflation Measures. Adjusted to pre-Clinton (1990) methodology, annual CPI inflation was roughly 4.5% in August 2010, the same level as in July, while the SGS-Alternate Consumer Inflation Measure, which reverses gimmicked changes to official CPI reporting methodologies back to 1980, was about 8.5% (8.50% for those using the extra digit) in August, versus 8.6% in July.

The SGS-Alternate Consumer Inflation Measure adjusts on an additive basis for the cumulative impact on the annual inflation rate of various methodological changes made by the BLS (the series is not recalculated).  Over the decades, the BLS has altered the meaning of the CPI from being a measure of the cost of living needed to maintain a constant standard of living, to something that no longer reflects the constant-standard-of-living concept.  Roughly five percentage points of the additive SGS adjustment reflect the BLS’s formal estimate of the annual impact of methodological changes; roughly two percentage points reflect changes by the BLS, where SGS has estimated the impact not otherwise published by the BLS.

http://www.shadowstats.com/

Login or register to post comments by Burnbright
on Sun, 10/10/2010 – 01:42
#638979

What a fucking joke…you do know that inflation/deflation is the result increase to or decrease in money supply right? You know…Mprime-M3 and credit…that stuff. If not, then no wonder that the CPI is still debated.

I get it, you want to argue about the definition of what deflation so that you can claim inflationists are wrong even though prices are increasing, you’re too cute.

Too many bafoons buying into the notion that price is a function.

Stupid comment of the week. No your right genius, price isn’t a function of the supply of money and the supply of goods. (/sarcasm off)

However, I will take the bait and ask you where global wage rates are about right now? I know, I know…labor probably represents only a fraction of total finished price. Fuck it!

Not sure really what you are trying to say here, maybe that you feel that because wages haven’t increased that inflation can’t happen, only you would be very wrong. Notice that prices are a function of the supply of money and the supply of goods and services. If the rate of production is dropping faster than the rate of deflationary forces then you will get “price inflation”. 

Login or register to post comments by trip nixon
on Sun, 10/10/2010 – 00:37
#638927

I am Richard M. Nixon

Login or register to post comments by gs_runsthiscountry
on Sun, 10/10/2010 – 01:08
#638951

The trillion dollar question is, when will the worlds nations..i mean central bankers, stand under a proverbial Buttonwood tree and create Bretton Woods part Duex. And, the SDR will morph into and be known as? Whos faces will adorn this new Utopian-fiat-currency?

Login or register to post comments by JR
on Sun, 10/10/2010 – 01:34
#638976

At the moment, it looks to be a tie between Ben Bernanke and Robert Mugabe.

Login or register to post comments by pitz
on Sun, 10/10/2010 – 01:26
#638969

What about Stock Equity Lines of Credit?  Why must houses be the only things that are used to reflate consumer spending?

Login or register to post comments by Dan The Man
on Sun, 10/10/2010 – 01:32
#638972

I like Santelli.  I think he gets it, but can’t look like an apocalyptical blowhard like me on CNBS.  He seems genuinely stressed about the USDollar. 

Login or register to post comments by eigenvalue
on Sun, 10/10/2010 – 02:08
#638997

From http://www.forecastfortomorrow.com

The following transcript is a recorded phone call from a high-ranking bank employee who has
agreed to share his insider knowledge of possible events known and implemented by several
highly ranked elite bankers associates in the U.S and also the European region.
We have agreed to keep this person’s identity confidential for obvious reasons and for the full
release of this document. For privacy reasons we will refer to him only as JOE.
Participants: JOHN (FFT Managing Director), JOE (Informant) ,
Call Started 1:04pm AEST
Transcript :-
JOHN : Hello Joe!, is that you?
JOE : Hi John!, thanks for calling back. I am here and can hear you fine.
JOHN : OK! That is great. I know it is late where you are, so I will not take up too much of your
time.
JOE : John, yes it is quite late but I feel I have to do this. Go ahead.
JOHN : Sure, I understand. Now I believe you are a subscriber of mine over at our
http://www.forecastfortomorrow.com website. Is that correct???
JOE : Oh for sure. You have quite a nice following over there, and I have been a
subscriber for a few years, and receive your newsletters as well. I am quite amazed at
some of your information, and accuracy and that is kind of why I contacted you via email
in the first place.
JOHN : Oh really!, well I do appreciate that. We try our best, to help people out. I do not normally
do this sort of thing, but your email intrigued me. I wanted to find out more, so can you tell me a
little bit more about you and your background?
JOE : (nervous) Ahh, yes…..well….ummm… I have been working for ..(large US Bank)..
that is affiliated with ..(Large US broking Firm).. I have many roles but manage large
accounts for various wealthy clients both here at home in the U.S, U.K and also other
European areas. I authorize loans, deals and accounts and have close contact with many
wealthy bright bubbly characters.
JOHN : So you see people from all walks of life ey?
JOE : Eh, no most of my clients are the big wigs, wealthy and very important. I think their
ego’s are far bigger then their bank balances if you know what I mean (laughs)
JOHN : (laughs) Yes I am sure!
JOE : They are a different breed of people. And some of the meetings I have attended
lately have alarmed me, especially the way they talk about things, and events that are
possibly coming.
JOHN : You mean to do with the economy, right?
JOE : Well not just the economy….other things as well. But economic talk is high on their
agenda yes!
JOHN : But hang on. These meetings that you attended, were they just normal meetings you are
required to attend as part of your job.
JOE : Yes, but once the small talk and business dealings were out of the way these guys
had no hesitation at talking about the bigger issues and their insider knowledge at hand. I
felt like they should be asking me to leave the room, but they simply did not do this.
JOHN : I see! So you don’t think these guys are some secret powerful elite group setting us all
up for destruction.
JOE : I can honestly say no. But the way they kept talking and hinting at things that
happened months later. It was simply amazing!. I know these guys were not directly
responsible for these events but they sure do know some very powerful men in powerful
places. They like to brag about this to each other also.
JOHN : So these guys would be like the next of kin or something if you had to put a title on
them.
JOE : The way they talk, act and behave, most likely yes John! They know a lot more than
both you and myself.
JOHN : OK I see, so……is it…or…can you give me an example of this?
JOE : Well remember back to the stockmarket crash, back in 2008?
JOHN : Yes sure. We were warning our client’s months before?
JOE : Yes, But I remember these guys talking about a crash too, and getting their money
out of the market. That was back in June of 2008. But they were also talking about bank
bailouts at the same time. Months before Obama came on the news and said that bailouts
were needed, and before anyone was using the term “BAILOUT” It was quite amazing
when I did hear about this on the news, I realized these guys knew this was going to
happen way before anyone else. I was simply stunned. I knew then it wasn’t just a
coincidence.
JOHN : hmmmmm…. I see now. Go on…
JOE : At first I thought they were just educated guesses. But as time went on, there were
too many of these coincidences occurring. At least three or four occasions if I remember
correctly.
JOHN : So it was at this point, your thoughts changed about these guys. You were thinking they
knew a lot more than meets the eye?
JOE : Oh my word! They would say one thing, have a joke about it. Weeks later,
sometimes a month down the track it would happen. When I started taking notes and
seeing these things match up, I was flabbergasted.
JOHN : Ok, why were you asked to attend these meetings in the first place?
JOE : Good question! Apparently two of these guys liked the way I did business. I was
fast, explained things well, and didn’t disrespect them. These guys do not like to be
messed around especially when they are after money or depositing large amounts of
money. I was just there to make things sail along smoothly, and I made sure I did this job
as best I could. At times it was very nerve racking. But once you make friends with these
guys, you are treated like a brother. They never asked me to get up and leave at any of
the meetings I attended.
JOHN : Ok, so you are in these meetings, and helping them whilst taking notes. And I believe
you have something to share with our subscribers today. I mean solid knowledge that you think
is reputable? So whenever you are ready go ahead ‘Joe’?
JOE : Yes John, that is what I want to do (ruffles paper) I have with me here, some notes
that I scribbled during these meetings. And they keep talking about these events, like I
said they joke around and talk about them like it is not even important. Like kids on a
playground. It is really quite amazing.
JOHN : Oh before we get going, can can you tell us when these notes were taken? So can we
have a date or time estimate?
JOE : Oh yes, yes….sure! aghh these two series of notes were taken from back around
the middle of June 2010, yes June and we have not had a meeting since.
JOHN : Yes, hmmm ok…
JOE : Ummm, so I have 3 major things that they kept talking about and referring to. They
were constantly referring to the small things that have already occurred, but these three
events are what they refer to as being the “biggies”. You know, major events that could
be coming down the track.
JOHN : 3 major things huh? Ok I am listening….
JOE : (ruffles paper) Ok the first one I have written down here and they talked about a lot
was do not worry about the stockmarket. It is heavily manipulated, and will go up and
down and eventually change entirely. Especially after the whole economic system
collapses. They gave no timelines, but say it is coming soon.
They were also joking about the media, saying that the lies will continue, and that we are
actually back in a depression right now and it will get worse!. Not recovering like the
mainstream media keep telling us. If the markets do sell off again to deep dark levels the
stockmarket will seem meaningless anyway. That is because they see so many changes
coming. Similar to what you have been telling your clients.
JOHN : You mean there will be no stockmarket?
JOE : No, not entirely. They keep hinting that it will change so much and we will see so
many changes, that it will not be as meaningful as it is today. If the market does exist, it
will change a lot and be much stricter. They know that the government are covering up
how much manipulation and thievery goes on at the exchanges each day. And they do
not want us to know about this.
Many companies that people once thought were solid are doing illegal accounting and
fraud and other things. Think about how many companies have been exposed in the last
18 months. There will be many more to come. This also includes those agencies that
oversee these activities. Many shakeups coming were what they were saying. The
markets, when all said and done, will greatly change as they are not reality based. The
games and efforts to continue the financial cover-ups just cannot continue.
The good thing about all of this crashing. The corrupt cannot continue the game much
longer, as reality does not support it. Once things get worse, and they will get much
worse according to these guys, in the financial and economic sector, everything will have
to be adjusted, revamped and corrected. A good day will no longer be based on the
faulty or moody stockmarkets, if that makes sense. Things will recover but it will take
sometime.
JOHN : hmmmm Right? I see….that doesn’t surprise me in the slightest, but it is important
information. We trade stock and indicies here from day to day, and I have to agree with this.
There is always so much manipulation that goes on, you can actually see it on your screen.
Fake bids, sales order flows and stacks. I know that a lot of people think this is a false, but it
does really happen because we see it on our screens and have also recorded obvious
occurrences from time to time.
It is becoming harder for the retail trader to make money from the market these days I must say.
So I find your comments there very interesting. Continue on ‘Joe’ what was the second thing you
have written down?
JOE : Aghh ok, the second thing down on my list is……agh….. watch the US dollar. They
are saying that either two things will happen. One, they will crash it and send it to the
depths, or before this happens they will stop it trading and bring in an entirely new
different currency. It will hurt a lot of people, and business owners. All they said as they
talked amongst themselves is watch the US dollar. They are going to greatly and
massively devalue this and try and send people broke. This is scary I must say.
They then went on and described in great detail that this would have massive nightmare
consequences. Prices would rise, inflation would come in and most likely lead to massive
hyperinflation. It will happen a while from now, but they kept saying this is imminent.
The most alarming thing for me to hear, was they were buying gold and not just bullions.
Tons and tons of it. Yes they kept mentioning tons. I was totally stunned. They said this
was a safe haven and they are doing deals in gold already because they know of the real
worth of the US paper currency. They refer to paper currencies as “fools gold”. Now I see
why. ‘It has no meaning’ one of them abruptly said this day. I wrote it down. The words
‘No meaning’ really played with me that day as I went to lunch and payed the cashier with
my US paperback. They did not give a specific time for this, but as they said a new
currency will be coming in soon, again they were very solid on this idea, but in what form
then did not really reveal that.
They really talked a lot about gold the last few meetings, and said it will go a lot higher.
They did not give me a level, but they said when the smart people wake up and get into
safety then you will see it rise. But at the moment they are saying the smart people have
not even woken up in the slightest yet. And there really is NOT a lot of people that own
gold right now, like your average investor.
JOHN : Man that is so interesting right now….I say this because as you said that I whacked up a
chart of the US dollar and it is looking very sick particularly in the last few months. Down and
down she goes. (tapping noise) And gold today is at a new highs $1347 an ounce. So maybe
we are only just seeing the start to all of this, according to them.
JOE : I am not guaranteeing anything here, but from their language yes, the dollar will
devalue or stop operating and send gold up much higher. Silver too. They are investing in
silver and other metals at the moment and love talking about it. But gold and silver
because it has real worth. I did not hear them say if gold would go above $1347 an ounce,
but assume that is likely because they talk about it like it being very very safe in years
from now. So I am guessing the price will increase significantly with ups and downs.
JOHN : We have been telling our clients to invest in gold and silver for many years. Some of our
top business clients have made a killing. But they were the ones who took action, so they are
the ones who deserve credit.
JOE : Yes I own a little gold, and have a wife and two kids. I think I will be looking to buy
more down the track, to help secure our future a little more.
JOHN : Wow! Good for you. I agree with this we have been buying large portions of gold
whenever it has big dips down. Ok lets not get sidetracked here ‘Joe’ what else interesting were
these guys saying? Anything we should know about?
JOE : (Paper tares, ruffles) ok sure John! Yes I have one more. It was a bit generalized but
I made sure to write it down, because it was very interesting. They were saying there are
big political shake ups coming. I think I saw one of your forecasts that goes along with
this.
JOHN : Yes, we were saying look for a move by the republicans. Maybe in a big way. Who
knows?
JOE : I see, hmmmmm yes they are saying that this is a rigged game also. Politicians are
very good liars and there are major changes coming. Possibly in line with your thoughts
there John. They are saying congressmen are being set up and rigging things and saying
look for bigger changes in the November elections this year. They didn’t mention who is
going to get in, but they were hinting that there are major players behind in the
background making moves to get rid of the old dogs. It is quite interesting because when
you look at the news today this seems like it has already started. But the way they are
talking, this will continue all the way throughout the year. With the elections being the
pinnacle or highlight of these occurrences. So I am watching with keen interest.
Any new significant changes they say will come and will be very evident leading in
towards 2011. They are saying the political system is nothing more than a rigged family
board game with rules being bent and twisted all the time.
JOHN : That is very alarming to say the least. But I am not surprised in any way. Joe did they
have anything else to say regarding this matter?
JOE : Not really. It is hard to keep up with them as they are always joking and making
reference to things constantly. Just like you and I are talking right now. I just scribble
down anything that I think is of use. Sometimes I think they want to leak the info out just
so they can show off and try to outdo each other.
The only other thing I have written down and took interest in was when one of them said
sternly, ‘when the system really collapses a lot of people will sit or stand in silence in awe
of the new nation that is forming infront of them’. He actually said it in those words, I
scribbled it down as he spoke them. It sort of put shivers down my spine when I did this.
Also this same elderly gentlemen said 2011 will be a shifting year, and things will not
recover for a while like the idiots out there keep saying.
JOHN : I have to say, I agree with this. I think things will recover but that is years away, not a
month or so like the news keeps cramming down our throats.
JOE : Oh yes, spot on there buddy! They are saying things will get a lot worse before it
gets better the way they are talking. We won’t be eating lolly pops under cotton candy
rain clouds anytime soon.
JOHN : (laughs) )
JOE : (soft laughter)
JOHN : Yes! It is sad but true. It will be interesting to see what happens, and if these guys have
a clear case of things to come. Ok it is getting late your end. Do you want to add anything, or
yes, I think we might wrap things up now!!
JOE : well….ahhh I do not have much more at this time. So yeah, its getting late and I
just wanted to help you out. You do some great work so just wanted to help you out. I am
sure your members will find it interesting. I just didn’t want to keep this to myself. I know
you were a bit sceptical, but …..you know, hopefully chatting today has given you a bit
more confidence into what is really going out there in the business world and these little
elite groups that do exist.
JOHN : Well I appreciate that, and I will be keeping a close eye on this. I have not really done
this sort of a thing before and was a bit hesitant, but after listening to you today, it seems that a
lot of this stuff could be very significant, and I was actually taking notes whilst listening to you
‘joe’.
JOE : OH,….oh…you were taking notes. Well that is great. I know this is being recorded
also. Am I correct??
JOHN : Yes that is right, So thankyou for your kind words and for contacting me yesterday. And
for talking with me today. We are living in a very important time.
JOE : That we are my friend. For sure!
JOHN : OK I think that just about does it. So, joe thanks for the info. We will be watching and
waiting to see what happens. But I hope this information can help those who are indeed out
there still wondering what is really happening and why they need to wake up to what is around
them.
JOE : Oh john!
JOHN : Yes!
JOE : I know that right now, there might be people that are sceptical. But I have to say
that I was also sceptical at first. So being sceptical is good. I think it is just who we are
and our protective coating that we have around us.
JOHN : I would agree with that. Ummm…so I am going to let people decide for themselves.
JOE : Ok thanks for your time, I know you have lots to do. So thankyou for giving me the
time to share this knowledge with you.
JOHN : Not a problem ‘Joe’ thanks for taking out time and staying up late to pass on all this info
to us. And we will say our goodbyes and talk later.
JOE : OK, no sweat! Again keep up the great work you do, and if I get anything interesting
I will probably shoot you over a quick message.
JOHN : That would be fine! I would love to hear any more info that comes to light. Thanks a lot.
OK goodnight, and God Bless.
JOE : OK, Goodnight, bye. (hangs up)

Login or register to post comments by JonTurk
on Sun, 10/10/2010 – 03:13
#639019

STAGFLATION bitchezz

that is not regular inflation..

there is no way home prices go up in stagflation — its an opinion of a meth head….

Login or register to post comments by 37FullHedge
on Sun, 10/10/2010 – 06:37
#639072

The argument of the deflationists is good, They fail by underestimating the corrupt and determined efforts of the global elite to do whatever it takes to prevent deflation, Inflation is a bullshit word for the truth, Debasement of the countrys currency thats inflation, Debasement = higher prices, The US is doing a good job at the debasement game and higher prices have come no if buts or ands,

Debasement is the inevitable end to a failed economic model Zimbabwe is a good one, The US UK and EU failed economic model is socialism and globalism, Debasement is the forces or nature to correct a failed state of affairs or a total default both are the same thing of correcting wrong doings  but debasement is much more desireble as an elitist tool of correction,

Hyperinflation or more correct a collapse in the faith of a currency, No way will the elitist allow the US $ to collapse they may be corrupt but not that stupid, They may wish the dollar to debase by 5 to 10 percent a year and if the debasement goes over 10 percent you can bet your debased dollars measures will be taken to support the dollar at all cost to prevent the loss of faith in the dollar, Interest rates would rise and tax rises that would support the dollar big time they have the tools, Simple cash will devalue year on year and things like commodities will do well although they look overbought in the short term,

 

Login or register to post comments by Dismal Scientist
on Sun, 10/10/2010 – 06:48
#639076

Wiki on Stagflation:

‘…both stagnation and inflation can result from inappropriate macroeconomic policies. For example, central banks can cause inflation by permitting excessive growth of the money supply,[8] and the government can cause stagnation by excessive regulation of goods markets and labor markets,[9] Either of these factors can cause stagflation.’

There you have it, it is coming and there is no way to stop it given the current incumbents in the Fed and the White House. Deflation is a nonsense. Try telling that to people who see the price of everyday living rising, even without the impact of a depreciating currency.

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