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Activist Post: No-Brainer Course In Derailing The Trans-Pacific Partnership

Activist Post: No-Brainer Course In Derailing The Trans-Pacific Partnership.

Heather Callaghan
Activist Post

If you don’t know what it is yet – that means it’s working. The secrecy, that is. But once Pandora’s Box is opened, there’s no putting anything back. It will go down in history as one of the worst, oppressive plagues to saturate the planet.

Like Spider Man trying to stop a train from going over with nothing but his strength and shooting threads; we are going to need all the Web we can get to stop the fast-tracking Trans-Pacific Partnership from running over us. Perhaps more aptly, it is a tangled web we’ll be left trapped in as prey if we do nothing.

Here’s a crash-course and the easiest approach – all guesswork removed. But first, here’s a sampling of what you can kiss goodbye if this mammoth piece of legislation goes through…

What’s left of our jobs, food safety, Internet freedom, natural medicine, small farming, choice in medicine, financial regulation, privacy and more. Basically, all your rights. It permeates every area of your life, it’s been ramrodded through the Senate, and the media is not saying anything. It grants the likes of Monsanto, Wall Street and other huge entities full reign with immunity.

Kiss any last American sovereignty goodbye and say hello to your new global crypto-corpocracy complete with international tribunals and the end of domestic law – from your newly refurbished prison cell, of course. After all, you clicked on the wrong Internet link! And your ISP was watching and reported you. In the near future, this article could be enough to jail me, ban my whole family from the Internet, have computers seized and delete the website. No more videos that piece other clips together, or anything that hints at “infringement,” no more fair use, so no more non-corporate news.

It’s been shrouded in secrecy, especially from the People and Congress, planned behind closed doors for years, and proponents are searching for sponsors to have the President push it through now that Congress is back from recess.

The Trans-Pacific Partnership n. 1. A “free trade” agreement that would set rules on non-trade matters such as food safety, internet freedom, medicine costs, financial regulation, and the environment. 2. A binding international governance system that would require the United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and any other country that signs on to conform their domestic policies to its rules. 3. A secret trade negotiation that has included over 600 official corporate “trade advisors” while hiding the text from Members of Congress, governors, state legislators, the press, civil society, and the public.

Here’s your crash course link on the TPP. You’ll be ready for take-off in no time. They’ve made it that simple:

Expose the TPP

After being mind-blown and catching your breath, you can do the absolute easiest thing there is to do by using Twitter with the hashtag #NOFastTrackTPP (but wait, there’s more).

Don’t use social media? No problem, scroll down. For social media users, here are the easiest things you can do, besides sharing memes and links on Facebook. Share things to Reddit andStumbleUpon. Everyone should call their reps (below).

See the Twitter storm event – still going. Pull any memes – share. Only use this hashtag for social media:  #NOFastTrackTPP. Using other hashtags and adding more will split the trends.

Next, Tweet your little heart out to your reps and others. Easily find them by clicking the “Discover” button and typing “congressman” in the search. All their Twitter names appear. Find celebrities, they often re-tweet. Example: @repfitzpatrick or @RepBera

Example Tweet:

@RepBera NO to Fast Track Authority and TPP, or we will not re-elect!! ‪#‎NoFastTrackTPP‬

Here’s another: “Do NOT sponsor FastTrack! Vote NO on TPP! ‪#‎NoFastTrackTPP‬”

Some reps have stood against the TPP, so first you might want to see this:

Spank or Thank?

– OR –

Use a general message for everyone: “I will NEVER support the Trans-Pacific Partnership#NOFastTrackTPP”

Want to jump into the Twitter storm? Easy. Sign up at Twitter, it runs you through a few-second tour and you can figure out the rest, see Help, or ask friends. Use the hashtag #NOFastTrackTPP on Facebook statuses.

Non-Social Media Users:

Find all your representatives’ info/forms in one-click. Just click on your state:
Contacting the Congress

Or use this:
Call President Obama: 202-456-6213
Call your Representative: 202-225-3121
or Toll Free (877) 762-8762

E A S Y  S C R I P T:

(Breathe and talk slowly. You will do just fine. Be polite and confident.)

“Hi, this is (your full name). I am a constituent of Rep/Senator (name). I live in (name of city). I am calling to request that Rep/Sen (name) vote NO on Fast Track Authority. It is important to me that Congress follows the Constitutional directive to negotiate international trade and that all trade agreements are given full consideration, debate and amendments as needed.

Do you know Rep/Sen (name) position on Fast Track Authority? Will he/she vote Yes or No? (wait for an answer)

Do you know Rep/Sen (name) position on the Trans Pacific Partnership Agreement? Will he/she vote Yes or No? (wait for an answer)

(regardless of their response, just continue)

Once again, I am requesting that Rep/Sen (name) vote NO on Fast Track Authority and NO on the TPP! Please be sure he/she gets my message. Thank you.”

Go to the Crash-Course site and print off PDFs to share. Actually, that whole website is designed to help you take action, online and off. You can still share the hashtag in any way you choose – it gets the point across fast.

URGENT:

If you can target these two reps, you could stop the fast-track today:

1) MIKE QUIGLY (IL-05)
D.C. 202-225-4061
District: (773) 267-5926
Twitter: @RepMikeQuigley
https://www.facebook.com/repmikequigley

2) GREG MEEKS (NY-05)
D.C. (202) 225-3461
District: 347-230-4032 & 718-725-6000
Twitter: Gregory Meeks
https://www.facebook.com/gregorymeeksny05

Lastly, if you have done something, no matter how small to derail the TPP fast track – THANK YOU!!

Special thanks also to Andrew Pontbriand, Emily Laincz and Nick Bernabe for their tireless organizing, efforts and information  – and to all those who joined them. Without them, this article wouldn’t be – nor will it with the TPP!

The smallest action is bigger than the greatest intention.

 

Heather Callaghan is a natural health blogger and food freedom activist. You can see her work at NaturalBlaze.com and ActivistPost.com. Like at Facebook.

Recent posts by Heather Callaghan:

The Real China Threat: Credit Chaos | Zero Hedge

The Real China Threat: Credit Chaos | Zero Hedge.

“There is an unresolved self-contradiction in China’s current policies: restarting the furnaces also reignites exponential debt growth, which cannot be sustained for much longer than a couple of years.”

The “eerie resemblances” – as Soros previously noted – to the US in 2008 have profound consequences for China and the world – nowhere is that more dangerously exposed (just as in the US) than in the Chinese shadow banking sector as explained below…

Submitted by Minxin Pei via The National Interest,

The spectacle of a game of financial chicken in the world’s second-largest economy is both entertaining and terrifying. Twice in 2013, the People’s Bank of China (PBOC), the country’s central bank, tried to demonstrate its resolve to rein in runaway credit growth. In June, it engineered a sudden credit squeeze that sent the interbank lending rates to more than 20 percent and caused a short-lived panic in the Chinese financial markets. Apparently, the financial turmoil was too much for the Chinese government, which quickly ordered the Chinese central bank to reverse course. As a result, the PBOC lost both face and credibility.

However, as credit growth continued unabated and activities in the most risky segment of China’s financial sector – the so-called shadow banking system – displayed alarming recklessness, the PBOC was left with no choice but try one more time to send a strong message that it could not be counted on to provide unlimited liquidity to the banking system.

It did so in December 2013 with a modified approach that provided liquidity only to the selected large banks but pressured smaller banks (which are the most active participants in the shadow banking system). Although interbank lending rates did not spike to nose-bleeding levels, as they did in June, they doubled quickly. Most Chinese banks held on to their cash and refused to lend to each other. Chinese equity markets fell nearly 10 percent, giving back nearly all the gains since mid-November, when the Chinese Communist Party’s (CCP) reform plan bolstered market sentiments.

Unfortunately for the PBOC, the renewed turbulences in the Chinese banking sector were again viewed as too dangerous by the top leadership of the CCP even though it seemed that the PBOC initially received its support. Consequently, the PBOC had to beat another hasty retreat and inject enough liquidity to force down interbank lending rates. Thus, in the first two rounds of a stand-off between the PBOC and China’s shadow banking system, the latter is widely seen as the winner. The PBOC blinked first each time.

For the moment, the conventional wisdom is that, as long as the PBOC maintains sufficient liquidity (translation: permitting credit growth at roughly the same pace as in previous years), China’s financial sector will remain more or less stable. This observation may be reassuring for the short-term, but overlooks the dangerous underlying dynamics in China’s banking system that prompted the PBOC to act in first place.

Of these dynamics, two deserve special attention.

The first one is the rapid rise in indebtedness (or financial leverage) in the Chinese economy since 2008. In five years, the country’s total debt-to-GDP ratio (including both public and private debt) rose from 130 percent to 210 percent, an unprecedented increase for a major economy. Historically, such expansion of credit hasrarely failed to inflate a credit bubble and cause a financial crisis. In the Chinese case, what makes the credit explosion even more risky is the low creditworthiness of the major borrowers. Only a quarter of the debt is owed by those with relatively high creditworthiness (consumers and the central government). The remaining 75 percent has gone to state-owned enterprises, private real-estate developers, and local governments, all of which are known to have weak loan repayment capacity (most state-owned enterprises generate low cash profits, private real-estate developers are overleveraged, and local governments have a narrow tax base). Staggering under an unsustainable debt burden of roughly 160 percent of GDP (equivalent to $14 trillion), these borrowers are expected to default on a significant portion of their bank debt in the coming years.

The second dynamic, closely related to the first one, is the growth of the shadow-banking sector. Two drivers shape activities in this sector, which operates outside the banking system. To minimize their exposure to risky borrowers, Chinese banks have curtailed their lending. But at the same time, these banks have embraced the shadow banking activities to increase their revenue. Specifically, Chinese banks peddle new “wealth management products” – short-term securities promising high interest rates – to their depositors. The issuers of such securities, which are not protected or insured by the government – are typically high-risk borrowers, such as local governments (and their financing vehicles) and real estate developers.

In the meantime, these borrowers are facing rising pressures for loan repayments in an environment of overcapacity and unprofitable investments. Unable to generate cash to service their loans, they have to turn to the shadow-banking sector for credit and avoid default. The result is an explosive growth of the size of the shadow-banking sector (now conservatively estimated to account for 20-30 percent of GDP).

Understandably, the PBOC does not look upon the shadow banking sector favorably. Since shadow-banking sector gets its short-term liquidity mainly through interbanking loans, the PBOC thought that it could put a painful squeeze on this sector through reducing liquidity. Apparently, the PBOC underestimated the effects of its measure. Largely because Chinese borrowers tend to cross-guarantee each other’s debt, squeezing even a relatively small number of borrowers could produce a cascade of default. The reaction in the credit market was thus almost instant and frightening. Borrowers facing imminent default are willing to borrow at any rate while banks with money are unwilling to loan it out no matter how attractive the terms are.

Should this situation continue, China’s real economy would suffer a nasty shock. Chain default would produce a paralyzing effect on economic activities even though there is no run on the banks. Clearly, this is not a prospect the CCP’s top leadership relishes.

So the task for the PBOC in the coming year will remain as difficult as ever. It will have to navigate between gently disciplining the banks and avoiding a financial panic. Its ability to do so is anything but assured. It has already lost the first two rounds of this game of financial chicken. We can only hope that it can do better in the next round.

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Activist Post: Rand Paul Exposes the Crony Federal Reserve on the Senate Floor

Activist Post: Rand Paul Exposes the Crony Federal Reserve on the Senate Floor.

Rand Paul

The Slow (But Inevitable) Demise Of The US Dollar | Zero Hedge

The Slow (But Inevitable) Demise Of The US Dollar | Zero Hedge.

Nothing lasts forever (as we’ve shown before) – except perhaps gold as a store of value it would appear.

 

 

Central banks around the world are increasingly diversifying their currency reserves away from the US Dollar. Even as overall holdings soar to a record $11.4 trillion, the US Dollar accounted for 61.44% (down from well over 65% at the peak of the crisis in 2008). With China outspokenly concerned at the US Dollar’s future status, we suspect this will only become more ‘diversified’.

 

Is This The End Of The Phony Recovery? : Personal Liberty™

Is This The End Of The Phony Recovery? : Personal Liberty™.

 

Is This The End Of The Phony Recovery?

PHOTOS.COM

While the mainstream media continue to push the meme that the economy is in (slow) recovery, some important facts point out that things are not as rosy as you are being told. In fact, most Americans feel the recessionnever ended.

An analysis of retail sales post-Christmas indicates that in-store retail sales decreased more than 3 percent over the same week last year. Retail brick-and-mortar shopper traffic decreased by 21.2 percent over thesame period in 2012. The lack of in-store sales didn’t translate to an increase in Web sales.

In September, homes sales dropped more than at any time in the last 40 months. New mortgage applications dropped 66 percent from an October 2012 peak, reaching a lownot seen in 13 years.

We are now seeing business and personal debt reaching levels not seen since 2007, right before the last crash. Household incomes have not improved at all and, in fact, have dropped. The unemployment numbers are completely cooked. The unemployment rate will drop again due to the ending of benefits to 1.3 million workers who will no longer be counted.

There are 107 million Americans on government assistance. About 50 million Americans get food stamps. The U.S. population has increased by 16 million people since 2006, but there are 1.5 million fewer Americans employed today. Workforce participation rates are the lowest in decades.

According to the consumer price index, the economy is growing at about 2.5 percent. But official inflation is also 2.5 percent. Real inflation is closer to 8 percent.

Yes, the stock market is hitting record highs. But that’s because the Federal Reserve is dumping $85 billion a month into the economy through QE to infinity to prop up the banksters and the market.

The Fed has inflated your dollar away to nothing. One dollar is now equal to 5 cents.

All so-called “growth” in the economy can be directly attributed to inflation. Inflation is not increasing prices, which is a symptom of inflation, but an increase in the money supply.

Inflation is a hidden tax on the wealth of the people.

Helicopter Ben Bernanke has succeeded in creating the illusion of a recovery. The illusion is about to end.

Jim Rogers Warns “Bernanke Has Set The Stage For The Fed’s Collapse” | Zero Hedge

Jim Rogers Warns “Bernanke Has Set The Stage For The Fed’s Collapse” | Zero Hedge.

With Bernanke’s term due to expire in January, Jim Rogers warns Mineweb that the Fed-head will be remembered as “the guy who set the stage for the demise of the Central Bank in America. We’ve had three central banks in America. The first two disappeared. This one’s going to disappear too in the next decade.” With precious metals, bonds, and stock markets obsessing over Fed actions, Rogers says, in the next 10 years or so, “People will realise that these guys have led us down a terrible path,” and collapse is “not a possibility,” he adds, “it’s a probability.”

Via Mineweb,

100 years ago you could not have named the head of most central banks in the world,” Rogers told Mineweb. “Now they’re all rockstars.” Gold and equity markets have increasingly been locked in Fed-watch mode in 2013, obsessing over when or whether chairman Ben Bernanke would taper the bank’s vast bond buying scheme.

Rogers however, an ardent free-marketeer, says the market’s narrow focus on the Fed reflects the bank’s rising and now extreme interference in global markets, propelling the likes of Bernanke in the US and Mario Draghi in Europe to near household name status.

“Everybody knows them,” he says, “but that’s only a phenomenon of the last 20 years, when central banks have been pumping money into the markets and everybody’s singing hallelujah.”

With Bernanke’s term due to expire in January, Rogers says he will be remembered as “the guy who set the stage for the demise of the Central Bank in America. We’ve had three central banks in America. The first two disappeared. This one’s going to disappear too in the next decade.”

“It’s not a possibility,” he adds, “it’s a probability. People will realise that these guys have led us down a terrible path. The Fed balance sheet has increased by 500 per cent in the last 5 years and a lot of it’s garbage.”

Unlike the wider market, Rogers does not set great store by the Fed’s decision shortly before Christmas to taper its bond buying measures from $85bn per month to $75bn. The announcement put pressure on gold and drove US equities to a new all-time high, in what Rogers views as a relief rally.

“The US went up because people said, ‘Now it’s done, we don’t have to worry anymore.’ But somewhere along the line, markets are going to start suffering. They’ll taper until the markets start hurting and then they’ll panic and loosen up again. They’ve got themselves in a terrible box.”

It’ll turn into a bubble or a very inflated situation, but eventually the markets will say, we’re not going to take your garbage anymore, whether it’s treasury bonds or currency.” Inflation, Rogers says, has only been kept in check in the US by the country’s shale gas discovery, putting a “dampener” on energy prices.

Whist Rogers views mass money printing as untenable, in the short term, he expects equities to turn parabolic, rather than collapse.

“The Japanese Central Bank has said that it will print unlimited amounts of money,” he says. “That’s their word and they’re doing it. When people look back 20 years from now they’ll say that’s what killed Japan, but in the meantime, all the staggering, unlimited amounts of money have got to go somewhere and it’s going to go into Japanese shares.”

Rogers prefers gold over gold mining shares and divisible coins over bullion, but says “there’s nothing in precious metals that I’m tempted to buy at the moment.”Indian import tariffs he views as the single biggest drag on the gold market currently.

“They’ve got a huge balance of trade deficit and the three largest parts are oil, gold and cooking oil. They cannot do anything about oil or cooking oil, so they’re attacking gold, blaming their problems on gold. Gold has not caused their problems, gold is a symptom of their problems, but politicians are pretty simple-minded people and they look for the easy answer.”

For early 2014, Rogers is therefore long inflatable equities and neutral on gold, but longer term, he expects to short junk and government bonds and is ultra bullish on gold. “Gold will become one of the only refuges around,” he says.

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Sat, 01/04/2014 – 21:49 | 4300928new Caveman93
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Anyone have an application they recommend for a one-time-pad cypher they like?

Sat, 01/04/2014 – 21:52 | 4300927new Duc888
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Surely the best news of 2014.  Tomorrow isn’t soon enough.  I wonder what the Powers that Be have in mind now?  Bar codes on the forehead or microchips?

Sat, 01/04/2014 – 21:46 | 4300915new NIHILIST CIPHER
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adventure   Lost count how many times I have sung the praises of the Indian people for owning gold. Not long ago I had a business meeting with a fellow from India, he lamented stories of how families will sell their gold when tough times arise and went into detail about the workings of their system. Banks hate not holding your money ALL of the time……..makes them scheme all the more. If Amerikans would sniff the coffee and store wealth in gold, we could tell the banksters to fuck off.

Sat, 01/04/2014 – 21:38 | 4300863new adventure007
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My mother taught me the importance of gold in times of crisis in India, when she had to mortage her jewelery for an important family need. The banks wouldnt take our home as a guarantee when all we wanted was 2k USD – but took my mothers gold. Thank you Zerohedge community for sharing so many amazing educational essays / artciles and the comments from the community to make people aware of the REALITY.

Jim Cramer – 2007

http://www.youtube.com/watch?v=SWksEJQEYVU&feature=youtu.be

 

Sat, 01/04/2014 – 21:19 | 4300855new spinone
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Credit creation is not a substitute for declining employment and resources.  This is going to be a long trend.

Sat, 01/04/2014 – 21:14 | 4300843new q99x2
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“Everybody knows them,”

Everybody hates them and wants to see them do prison time for their crimes.

I like Jim Rogers for running on a tread mill.

I’m back up to over 8 miles non-stop at the beach. Thanks to my pre-Obamacare medical treatment. Got that taken care of just in the nick of time.

Lots of pilot whales out there today.

Sat, 01/04/2014 – 21:00 | 4300811new NIHILIST CIPHER
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Question:    Is the Fed operating illegally without a charter? How far would we get trying to operate a bank here in the USSA without a charter?

Sat, 01/04/2014 – 21:36 | 4300892new satoshi101
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Why do you guys always talk about “LEGAL”,

The MILITARY is exempt from all CIVILIAN LAW, they have their own courts, the NSA has been off-budget running a black-budget for years, and post 1970’s they too, got unlimited FIAT (USD).

LEGAL don’t have a fucking to do with anything post 1970’s.

Might makes Right, the USA is backed by  a GUN (nuke), that’s all you need to rule the world is FEAR.

***

Mr Rogers offers the world a sanitized feel-good, bring back the old day grandpa approach to viewing reality, perhaps this is why MSM brings Mr. Magoo to the BOOB-TUBE?

Sat, 01/04/2014 – 21:18 | 4300858new NoDebt
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The major banking families wrote the Fed’s charter in 1913.

Sat, 01/04/2014 – 21:36 | 4300893newNIHILIST CIPHER
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Nodebt   I know the history. The charter ended in December, so is it illegal for them to operate past that time?

Sat, 01/04/2014 – 21:45 | 4300913newNoDebt
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Be careful with the word ‘illegal’.  If you can substitute the word ‘unconstitutional’ you’re on firmer footing.  And in that respect, I’m not sure if it EVER was.  So why would the expiration of a charter make it more or less so?

Sat, 01/04/2014 – 20:56 | 4300797new satoshi101
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Rogers has been saying this daily since the 1970’s and it hasn’t happened ( death of FED ), someday of course Rogers will be right, but Rogers will be long dead.

Here’s what is going to happen next.

The NSA is going to admit there was a COUP back in 1950, that the USA has been operating by special Military Power ever since Eisenhower.

That the NSA will now take over the FED’s job of creating FIAT, aka USD.

The FED will remain, but it will be just a bunch of friendly faces (Yellen in a Thong ), but the real USD, and the real budgets in the USA will be decided by the NSA (MIL).

 

The USA will continue too, but only as a dog and pony show, and the courts, they can fuck the civilians to death, as MIL has their own courts.

This is the new world order, and yep you’ll get Hillary Clinton president, and she can fuck with the civilians all she wants, and the MIL don’t give a shit, as long as they can control the world.

 

Sat, 01/04/2014 – 21:23 | 4300870new satoshi101
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Wow all the RED, I love Rogers, … so it can’t be that, … I said the USA is operating under SPECIAL MILITARY Powers, .. yep going back to JFK years, I thought everybody knew this?

So why  the RED?

The NSA has been unbridled for 70 years, and now rules the world, is this news to you? Not to me I was there all along for the ride.

 

Truth hurts? You have to deal with reality, and if you want to be ‘free’ get the fuck out of the USA. Pure and Fucking Simple.

Sat, 01/04/2014 – 21:24 | 4300865newtherevolutionwas
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“…Rogers will be long dead.”  You assume he will soon die.  And you assume Zero Hedgers and their kindered spirits will do nothing.  You are full of shit.

Sat, 01/04/2014 – 21:31 | 4300880newsatoshi101
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Rogers is over 70, he is NOT immortal, unlike you.

I have already said,… the US army delta force was murdered when they stood up and objected ( 1990’s post WACO), and in recent years the Navy Seals (2012+) were murdered when they spoke up.

Now you tell me that the virtual keyboard army aka ZH is going to accomplish what DELTA&SEAL failed? To restore America?

I think not.

***

The USA is the BOILED-FROG the MIL took over in the 1950’s, its now 60+ years complete, there is no returning to a civilian government in the USA.

Denial, or imagining uptopia will never help you, nor will BTC.

The world is full of benevolent country’s that have said FUCK-YOU to the USA HEGEMONY, find one and enjoy life.

 

Sat, 01/04/2014 – 21:12 | 4300836new Soul Glow
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I like how the most common argument against collapse is that “people have been thinking this for 40 years”.  Well, some people are ahead of their time.

Also, I am not sure Rogers has been one of those until lately.

Sat, 01/04/2014 – 21:22 | 4300859newsatoshi101
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Soul Glow, I have been reading your stuff, you are one of the few humans here, not a bot, and not a troll.

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Please define ‘collapse’,

IMHO the collapse happened in the 1970’s, when they took the USD off of gold, after that the USA went full retard MILITARY, and the rest is history. ‘Collapse’ in all of history is slow motion, civilization to ghost-town,

The USD started its decline in the 1980’s, and then for 30 years everything that could be stolen ( tangibles ) were stolen, now nothing is left to steal in the USA.

Rogers is invited to come on TV and he likes to talk, and ‘collapse’ sadly sell’s, is it probable FUCK-NO, but it all depends what ‘collapse’ means to you.

***

I’ll define collapse, If my family has no food to eat, the world has collapsed, if my neighbor has no food, then ALARM bells go off.

All human suffering is relative, even during the great depression while +20% were hungry, the other 80% were fat and happy.

COLLAPSE is situational, in no way will everyone suffer, the only people who will suffer is those in the USA that are not prepared,

If you are a student of Rogers or Faber, then you would know they both advocate leaving the civil war, before the shooting starts.

***

NOW your turn, define ‘collapse’.

 

Sat, 01/04/2014 – 21:00 | 4300803new Tinky
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Presumably you are posting from Colorado.

Sat, 01/04/2014 – 21:12 | 4300831newOwnSilverPlayMusic
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You got a problem with Colorado comrade??

Sat, 01/04/2014 – 21:07 | 4300818new Ralph Spoilsport
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He said he left the country in a post above this one, so…yeah.

Sat, 01/04/2014 – 21:13 | 4300830new Tinky
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Apparently nuance isn’t your strong suit.

Sat, 01/04/2014 – 21:40 | 4300907newRaceToTheBottom
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reefer madness dude……

Sat, 01/04/2014 – 21:17 | 4300851newRalph Spoilsport
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Boulder and Aspen don’t count as being in the country.

Sat, 01/04/2014 – 20:53 | 4300795new Atomizer
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It’s time to re-coin our own fiat currency. Let the multi-national bag holders drown in their own debt obligations.

Sat, 01/04/2014 – 20:55 | 4300792new 1C3-N1N3
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Absolutely not. It’s .gov that’s going under the bus, not the Fed. Hell, the Fed even has their own troops now and regional offices all over the country. They ain’t going anywhere.

Sat, 01/04/2014 – 21:03 | 4300810new satoshi101
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Funny you guys LOVE Rogers, but he lives in Singapore, and never sets foot in the USA.

You guy’s say that people who have left the USA should shut their mouth, but you worship every word from Rogers?

What gives?

I love Rogers, he like myself voted with our feet long ago, and Rogers say’s “LEARN TO SPEAK CHINESE”, … I taught myself Chinese some 30+ years ago,

Everything Rogers says is true, but if anybody else but Rogers say’s it, h is an idiot. Why is that?

***

This article is Bullshit, the NSA/CIA rules the world, and they control the FIAT-USD and always have created all they want, that’s why there were able to dump ‘containers’ of $100 bills in IRAQ to BUY friends,

The US-MIL (NSA) run’s America.

The civilian government gets to FUCK the people, and me and Rogers don’t like to be fucked, so we left the USA.

If any of you were smart, you would do the same.

Sat, 01/04/2014 – 21:19 | 4300850new NoDebt
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No thanks.  I’d rather fight the battle on my home turf.  All those American-friendly places may prove to be decidedly less so if the dollar collapses, and the world economy along with it.  Here’s hoping you’ve laid roots deep enough where you are now to make it though a situation like that.

All major “developed” economies are in roughly the same predicament.  When it gets time for the dollar to take an ass-whipping, they all will.  ALL of them.

Sat, 01/04/2014 – 20:49 | 4300782new Donewidit
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Paradigm shift to true value is what’s occuring.

Sat, 01/04/2014 – 21:11 | 4300841new satoshi101
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BTC real value? I have a virtual bridge to sell you.

Perhaps in Asia people have always respected only GOLD in the hand, nobody on in ASIA buy’s paper-gold (ETF/ETN), but the USA is clearly heading into a virtual 24/7, …

I would say just the opposite, that the USA has permanently left the tangibile to the intangible.

 

Sat, 01/04/2014 – 21:09 | 4300822new Ralph Spoilsport
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Agreed. Ace Hardware is losing paradigms like a bitch.

Sat, 01/04/2014 – 20:50 | 4300780new Racer
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YES, oh  YES

Oh Brilliant Yes, oh …..

 

Oh ……

Sat, 01/04/2014 – 21:16 | 4300779new Millivanilli
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It is not the responsibility of the Federal Reserve – nor would it be appropriate – to protect lenders and investors from the consequences of their financial decisions.”

Ben shalom bernank

 

Can we have a revolution now, I’m getting sleepy.

Sat, 01/04/2014 – 20:47 | 4300778newDoChenRollingBearing
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Gold, fishez!

Sat, 01/04/2014 – 21:26 | 4300879new Atomizer
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my translation above.

Agreed. They have lost control. Too bad, this is the best country on the globe.

Sat, 01/04/2014 – 20:48 | 4300775new bearish1
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GOOD!!

Sat, 01/04/2014 – 20:46 | 4300776new Jannn
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Unprecedented Total Chinese Gold Demand 2013

Over 2500 tons!!!

 

http://www.ingoldwetrust.ch/unprecedented-total-chinese-gold-demand-2013

Sat, 01/04/2014 – 21:09 | 4300834newDoChenRollingBearing
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58579 55195 66517 85251 31629 80649 7355 4534 72302 74504 75324 27474 72418 12004 67076 93764 8567 4037 89362 67106 90403 29322 53954 9516 35602 95115 30523 74772 42842 24024 12293 54435 92544 73332 74618 66121 58115 26171 54272 48043 1562 39763 31240 96242 45193 98740 3122 20348 89430 78604 52528 74011 38930 89514 80026 73627 28187 4988 34666 50471 53045 23413 11808 27691 16317 56145 68542 42731 76872 65946 94391 30076 56688 10638 27713 60975 97658 39042 60162 31115 95430 49336 74791 83874 37476 772 21734 64311 26061 75900 41938 83573 91615 63292 59295 70689 54300 1997 81024 83847 65481 20791 89007 69637 14154 7504 99722 27094 27919 22886 32823 94455 98319 7706 50617 49235 37123 33975 70114 89279 22862 20811 23686 56668 24673 61703 11964 28637 84625 40708 27700 57487 53102 75674 39222 61129 71861 6881 23072 75754 76478 78418 67563 75621 64437 89024 62017 17087 3644 27 69270 377 78212 58847 39424 40167 13979 60581 23170 59804 82667 95394 75879 52289 25224 23080 68364 42383 3358 50695 55906 8352 25174 4494 8419 97399 36828 7025 66060 94639 83784 35953 90669 76122 99664 31996 84224 60383 4558 90650 65712 57722 50956 62580 9307 19965 19284 5511 57412 18373 17955 94343 20560 92229 72124 98969 27250 16907 40684 26445 54122 35409 94105 39918 22645 90846 47992 24410 67714 51516 51005 36774 63541 28206 49925 49418 14335 54208 49286 79429 8884 13062 5 88124 88955 74957 95226 30956 44661 16662 97359 11251 37573 98831 38215 68712 20180 42863 38697 17865 86271 5064 96894 63253 35922 88575 58655 11023 33269 37868 23524 90882 91469 17667 92376 71817 70782 21040 33805 61508 67206 97968 35406 79559 44412 71510 95092 59828 22916 44394 46431 11164 43644 64285 31105 59370 19863 49107 45315 64490 62297 53769 70690 85702 67382 81086 85676 26397 50383 30916

Sat, 01/04/2014 – 21:39 | 4300901newRaceToTheBottom
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Are those your serial numbers of your gold/silver bullion?

Sat, 01/04/2014 – 21:25 | 4300868newAtomizer
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308346357344344343289275327347344364275

347340361344275351354358359275342354353

359357354351289275327354354275341340343

287275359347348358275348358275359347344

275341344358359275342354360353359357364

275354353275359347344275346351354341344

289275256253256253

 

Sat, 01/04/2014 – 21:14 | 4300844new Ralph Spoilsport
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cicada2014 sez: keep wearing that insect shirt

Sat, 01/04/2014 – 21:20 | 4300856newDoChenRollingBearing
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DCRB sez:

38d384f7d075a5dac7d647fefe55c87303545a9af18115bbd46b1d5142272597

900cf14cdd78b1a26104034cc88583671df5d1c82d9f1b3b6a0f129765b044d7

7311c20975005941505ca9bdf405b48252df476a26e1d8049cf24bfb914b2924

1633c1532af2b9afe86e9e56727ac2ad1b252f8d25424f56f12c05c2de3137f1

0841f152872a9facd399009f55e25e428b62666f2df2e7f41685bcb012a374e3

af510c444f79f372079a56a106c5e7836aaf2e8bc61e9e61d951a705cd3421a8

6d6242ee869d462dbcfb4459c6e52f7d0291135905a6e5ba9e22aa03f4e71dff

4203487c399d3e70e5c94b89ae03c1ee71bce206782b2da4ed0938aeaeba3650

8829d63cc18ad0d882a3e29b3b283cdaff0fcac6f9207cd413888a5590776432

9b894228ad9fb06537ee20c2a312fa076f15bb108ce406faba2104abd3ddc6cd

9985e0003d6fbe5a0b5987d16006105262587550adfdab6da2886dc5b68a0f1b

Sat, 01/04/2014 – 21:20 | 4300861new NoDebt
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My hex is a little rusty.  Care to translate?

Sat, 01/04/2014 – 21:27 |4300873new Atomizer
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http://home.paulschou.net/tools/xlate/

Sat, 01/04/2014 – 21:25 |4300869new DoChenRollingBearing
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It is a dialect of Bearingish.

It means: “Hey, NSA, catch that and paint it green!”

Sat, 01/04/2014 – 21:24 |4300872new NoDebt
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OK, super.  Could you now translate your translation?

Sat, 01/04/2014 – 21:32 |4300885new DoChenRollingBearing
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My understanding that quotation came from am American POW held by the Chicoms during the Korean War.  He was being interrogated.  He farted and told them to catch that and paint it green.

OCICBW  !!

***

Actually that latter set comes from here:

http://www.xorbin.com/tools/sha256-hash-calculator

Have fun!

Sat, 01/04/2014 – 21:37 | 4300890new NoDebt
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Never heard that one before.  Hope it’s true.  Worth a chuckle.

Should we expect your future posts to be in hex as well?  (Which would be highly annoying and only slightly badass)

I only ask so I can decide if I need to prepare myself with the appropriate translation tools.

Sat, 01/04/2014 – 21:49 | 4300922newDoChenRollingBearing
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I just heard that years ago, I don’t know if it’s true re the POW and green…

***

Re future posts, naah!  Just having fun.

Short and succint this time    <– Type exactly that

d902a4d70a0515d0cbaaadcbbb40fd326b5646d5346ff70c9e5b4cc09e3a7a0f

^—- is the output

Here: http://www.xorbin.com/tools/sha256-hash-calculator

Just having fun here is all.

Sat, 01/04/2014 – 21:52 |4300930newLetThemEatRand
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You get top bunk at camp for that series of posts.

Sat, 01/04/2014 – 21:07 | 4300826new El Oregonian
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“Gold will become one of the only refuges around,” he says.

Self reliant Family-survival and weaponized multi-strategic, multi-offensive/defensive compounds.

Get Prepared/Stay Prepared

Sat, 01/04/2014 – 21:12 | 4300848newOwnSilverPlayMusic
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Grow your own food, filter your own water and protect what is yours.  That’s all you can do.

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Where The Global Economic Growth In 2014 Is Expected To Come From – Country Breakdown | Zero Hedge

Where The Global Economic Growth In 2014 Is Expected To Come From – Country Breakdown | Zero Hedge.

When it comes to setting the prevailing economist groupthink, nobody does it better than the economists at JPMorgan and Goldman Sachs. Which is why the following chart of projected 2014 GDP growth by quarter in the Developed and Emerging World from JPM, explains succinctly just where the groupthink now expects marginal global growth will come from (Mexico, South Africa, Korea, UK, Italy?). We show it just because the economist consensus is always wrong when it comes to the important inflection points (see ECB rate cut decision, Taper off decision, Taper on, the great financial crisis, “subprime is contained”, etc).

So for those curious to know what most likely will not happen in the new year, this chart’s for you.

 

Why a Finite World is a Problem | Our Finite World

Why a Finite World is a Problem | Our Finite World.

Why is a finite world a problem? I can think of many answers:

1. A finite world is a problem because we and all of the other creatures living in this world share the same piece of “real estate.” If humans use increasingly more resources, other species necessarily use less. Even “renewable” resources are shared with other species. If humans use more, other species must use less. Solar panels covering the desert floor interfere with normal wildlife; the use of plants for biofuels means less area is available for planting food and for vegetation preferred by desirable insects, such as bees.

2. A finite world is governed by cycles. We like to project in straight lines or as constant percentage increases, but the real world doesn’t follow such patterns. Each day has 24 hours. Water moves in waves. Humans are born, mature, and die. A resource is extracted from an area, and the area suddenly becomes much poorer once the income from those exports is removed. Once a country becomes poorer, fighting is likely to break out. A recent example of this is Egypt’s loss of oil exports, about the time of the Arab Spring uprisings in 2011 (Figure 1). The fighting has not yet stopped.

Figure 1. Egypt's oil production and consumption, based on BP's 2013 Statistical Review of World Energy data.

Figure 1. Egypt’s oil production and consumption, based on BP’s 2013 Statistical Review of World Energy data.

The interconnectedness of resources with the way economies work, and the problems that occur when those resources are not present, make the future much less predictable than most models would suggest.

3.  A finite world means that we eventually run short of easy-to-extract resources of many types, including fossil fuels, uranium, and metals.  This doesn’t mean that we will “run out” of these resources. Instead, it means that the extraction process will become more expensive for these fuels and metals, unless technology somehow acts to hold costs down. If extraction costs rise, anything made using these fuels and metals becomes more expensive, assuming businesses selling these products are able to recover their costs. (If they don’t, they go out of business, quickly!) Figure 2 shows that a recent turning point toward higher costs came in 2002, for both energy products and base metals.

Figure 2. World Bank Energy (oil, natural gas, and coal) and Base Metals price indices, using 2005 US dollars, indexed to 2010 = 100.  Data source: World Bank.

Figure 2. World Bank Energy (oil, natural gas, and coal) and Base Metals price indices, using 2005 US dollars, indexed to 2010 = 100. Base metals exclude iron. Data source: World Bank.

 

4. A finite world means that globalization will prove to be a major problem, because it added proportionately far more humans to world demand than it added undeveloped resources to world supply. China was added to the World Trade Organization in December 2001. Its use of fuels of all types skyrocketed quickly soon afterward (Figure 3, below). As noted in Item 3 above, the turning point for prices of fuels and metals was in 2002. In my view, this was not a coincidence–it was connected with rising demand from China, as well as the fact that we had extracted a considerable share of the cheap to extract fuels earlier.

Figure 3. Energy consumption by source for China based on BP 2013 Statistical Review of World Energy.

Figure 3. Energy consumption by source for China based on BP 2013 Statistical Review of World Energy.

5. In a finite world, wages don’t rise as much as fuel and metal extraction costs rise, because the extra extraction costs add no real benefit to society–they simply remove resources that could have been put to work elsewhere in the economy. We are, in effect, becoming less and less efficient at producing energy products and metals. This happens because we are producing fuels that are located in harder to reach places and that have more pollutants mixed in. Metal ores have similar problems–they are deeper and of lower concentration. All of the extra human effort and extra resource expenditure does not produce more end product. Instead, we are left with less human effort and less resources to invest in the rest of the economy. As a result, total production of goods and services for the economy tends to stagnate.

In such an economy, workers find that their inflation-adjusted wages tend to lag. (This happens because the total economy produces less, so each worker’s share of what is produced is less.) Companies producing energy and metal products are also likely to find it harder to make a profit, because with lagging wages, consumers cannot afford to buy very much product at the higher prices. In fact, there is likely to be the danger of an abrupt drop in production, because prices remain too low to justify the high cost of additional investment.

6. When workers can afford less and less (see Item 5 above), we end up with multiple problems:

a. If workers can afford less, they cut back in discretionary spending. This tends to slow or eventually stop economic growth. Lack of economic growth eventually affects stock market prices, since stock prices assume that sale of their products will continue to grow indefinitely.

b. If workers can afford less, one item that is increasingly out of reach is a more expensive home. As result, housing prices tend to stagnate or fall with stagnating wages and rising fuel and metals prices. The government can somewhat fix the problem through low interest rates and more commercial sales–that is why the problem is mostly gone now.

c. If workers find their wages lagging, and some are laid off, they increasingly fall back on government services. This leaves governments with a need to pay out more in benefits, without being able to collect sufficient taxes. Thus, governments ultimately end up with financial problems, if extraction costs for fuels and metals rise faster than can be offset by innovation, as they have been since 2002.

7. A finite world means that the need for debt keeps increasing, at the same time the ability to repay debt starts to fall. Workers find that goods, such as cars, are increasingly out of their ability to pay for them, because car prices are affected by the rising cost of metals and fuels. As a result, debt levels need to rise to buy these cars. Governments find that they need more debt to pay for all of the services promised to increasingly impoverished workers. Even energy companies find a need for more debt. For example, according to today’s Wall Street Journal,

Last year, 80 big energy companies in North America spent a combined $50.6 billion more than they brought in from their operations, according to data from S&P Capital IQ. That deficit was twice as high as in 2011, and four times as high as in 2010.

At the same time that the need for debt is increasing, the ability to pay it back is falling. Discretionary income of workers is lagging, because of today’s high prices of fuels and metals. Governments find it difficult to raise taxes. Fuel and metal companies find it hard to raise prices enough to  finance operations out of cash flow. Ultimately, (which may not be too in the future) this situation has to come to an unhappy end.

Figure 4. Repaying loans is easy in a growing economy, but much more difficult in a shrinking economy.

Figure 4. Repaying loans is easy in a growing economy, but much more difficult in a shrinking economy.

Governments can cover up this problem for a while, with super low interest rates. But if interest rates ever rise again, the increase in interest rates is likely to lead to huge debt defaults, and major financial failures internationally. This happens because higher interest rates lead to a need for higher taxes, and because higher interest rates mean purchases such as  homes, cars, and new factories become less affordable. Rising interest rates also mean that the selling price of existing bonds falls, potentially creating financial problems for banks and insurance companies.

8. The fact that the world is finite means that economic growth will need to slow and eventually stop. We are already seeing slower economic growth in the parts of the world  that have seen a drop in oil consumption (European Union, the United States, and Japan), even as the rest of the world has seen rising oil consumption.

Figure 5. Oil consumption based on BP's 2013 Statistical Review of World Energy.

Figure 5. Oil consumption based on BP’s 2013 Statistical Review of World Energy.

Countries that have had particularly steep drops in oil consumption, such as Greece (Figure 6 below), have had particularly steep drops in their economic growth, while countries with rapid increases in oil and other energy consumption, such as China shown in Figure 2 above, have shown rapid economic growth.

Figure 6. Oil consumption of Greece, Based on EIA data.

Figure 6. Oil consumption of Greece, Based on EIA data.

The reason why we are already reaching difficulties with oil consumption is because for oil, we are reaching limits of a finite world. We have already pulled out most of the easy to extract oil, and what is left is more expensive and slow to extract. World oil production is not rising very fast in total, and the price needs to be high to cover the high cost of extraction.  Someone has to be left out. The countries that use a large proportion of oil in their energy mix (like Greece, with its tourist trade) find that the products they produce are too expensive in a world marketplace. Countries that use mostly coal (which is cheaper), such as China, have a huge cost advantage in a cost-competitive world.

9. The fact that the world is finite has been omitted from virtually every model predicting the future. This means that economic models are virtually all wrong. The models generally predict that economic growth will continue indefinitely, but this is not really possible in a finite world. The models don’t even consider the fact that economic growth will scale back in mature economies.

Even climate change models include far too much future fossil fuel use, in both their standard runs and in their “peak oil” scenarios. This is convenient for regulators. Oil limits are scary because they indicate a possible near-term problem. If a climate change model indicates a need to cut back on future fossil fuel use, these models give the regulator a more distant problem to talk about instead.

10. Even the most basic economic relationships tend to be mis-estimated in a finite world. It is common for economists to look at relationships that worked in the past,  and assume that similar relationships will work now. For example, researchers like to look at how much debt an economy can afford relative to GDP, or how much debt a business can afford. The problem is that the amount of debt an economy or a business can afford shrinks dramatically, as the economic growth rates shrinks, unless the interest rate is extremely low.

As another example, economists believe that higher prices will lead to substitutes or a reduction in demand. Unfortunately, they have never stopped to consider that the reduction in demand for an energy product might have a serious adverse impact on the economy–for example, it could mean many fewer jobs are available. Fewer jobs mean less demand (or affordability), but is that what is really desired?

Economists also seem to believe that prices for oil products will keep rising, until they eventually reach the price level of substitutes. If people are poorer, this is not necessarily the case, as discussed above.

11. Besides energy products and metals, there are many other limits that are a problem in a finite world. There is already an inadequate supply of fresh water in many parts of the world. This problem can be solved with desalination, but doing so is expensive and takes resources away from other uses.

Arable land in a finite world is subject to limits. Soil is subject to erosion and degrades in quality if it is mistreated. Food is dependent on oil, water, arable land, and soil quality, so it quickly reaches limits if any of these inputs are disturbed. Pollinating insects, such as bees, are also important.

Probably the biggest problem in a finite world is the problem of too high population. Before fossil fuel use was added, the world could feed only 1 billion people. It is not clear that even that many could be fed today, without fossil fuels. The world’s population now exceeds 7 billion.

Where We Are Now in a Finite World

At this point, the problem of hitting limits in a finite world has morphed into primarily a financial problem. Governments are particularly affected. They find that they need to borrow increasing amounts of money to provide promised services to their citizens. Debt is a huge problem, both for governments and for individual citizens. Interest rates need to stay very low, in order for the current system to “stick together.”

Governments are either unaware of the true nature of their problems, or are doing everything they can to hide the true situation from their constituents. Governments rely on economists for advice on what to do next. Economists’ models do a very poor job of representing today’s world, so they provide little useful guidance.

The primary way of dealing with limits seems to be “solutions” dictated by concern over climate change. These solutions are of questionable benefit when it comes to the real limits of a finite world, but they do make it look like politicians are doing something useful. They also provide a continuing revenue stream to academic institutions and “green” businesses.

The public has been placated by all kinds of misleading stories about how oil from shale will be the solution. Quantitative Easing (used by governments to lower interest rates) has temporarily allowed stock markets to soar, and allowed interest rates to stay quite low. So superficially, everything looks great. The question is how long all of this will last. Will interest rates rise, and undo the happy situation? Or will a different financial problem (for example, a debt problem in Europe or Japan) bring the house of cards down? Or will the ultimate problem be a decline in oil supply, perhaps caused by oil and gas companies reaching debt limits?

2014 will be an interesting year. Let’s all keep our fingers crossed as to how things will work out. It is surreal how close we can be to limits, without major media catching on to what the problem really is.

QE Can Only End One Way

QE Can Only End One Way.

By Adam English    2013-12-31

Here we are, at the last day of a year that has defied all the odds.

The Dow and S&P 500 have posted out-sized gains in spite of what can generously be called tepid economic growth.

The regional governors and economists over at the Fed are undoubtedly enjoying the afterglow of their resounding success with the latest tapering announcement a couple weeks ago.

Investors, banks, and policymakers are most likely enjoying their holiday vacations while planning what to do with the fat bonus checks that are en route.

Of course, the disenfranchised poor are worse off than ever. Millions just lost their only source of money for food, and millions more are stuck in a downward spiral of debt traps and part-time work.

But these downtrodden masses don’t have any money to pour into the markets to boost gains. To the market and policymakers, they were only included when it came time to package self-enriching schemes in populist rhetoric.

Tomorrow, it’ll be time to start thinking about the next set of yearly returns, and none of the big players are worried.

Next year promises more of the same in their eyes. The Easy Money Battle of 2013 was won.

Unfortunately, many of them don’t see that it was a Pyrrhic victory. The cost is already too high to succeed in the end.

A Terrible Record

Clearly, the temptation in the market is to take the latest Fed announcement and ensuing rally as a call to double down on wildly bullish sentiment as 2014 starts.

I have little doubt that we’ll see this shaken out of the market sometime in the first half of next year. When you take a look at the Fed’s record on tapering announcements, it doesn’t look good.

By my count it has one win, one tie, and five losses.

The first mention of winding down QE programs came back on May 22nd. Hints of a reduction in stimulus measures in the Federal Open Market Committee (FOMC) minutes caused an immediate 1% drop in the Dow and a volatility spike.

On June 19th, there were no taper hints. Ben learned his lesson. However, the markets still knew it was imminent. The Dow closed down 1.3% while the S&P 500 fell 1.4%.

July’s announcement caused a 0.7% drop for the Dow and another volatility spike.

September was an aberration and a virtual tie because the government shutdown distracted everyone.

October saw no date set for a taper. There was some volatility and a slight dip in the markets for the afternoon.

Then on December 18th, the November FOMC minutes were released, causing a 290-point gain in the Dow and exuberant front-page headlines.

It’s clear the Fed’s record is pretty abysmal, filled with fumbles and confusion. But the trend appears to suggest that the markets have made peace with the idea. At least on the surface.

So what changed over time?

The overall tone of the statements and Bernanke’s remarks suggests that the Fed is still very “dovish” and willing to err on the side of caution. That helped, but it isn’t enough on its own.

In reality, the folks at the Fed spent the last half-year scratching their heads trying to figure out how to make a taper palatable to the markets. The result was a massive concession in how the taper would proceed.

The Fed now intends to hold interest rates at historic lows past the point when the unemployment rate falls to 6%. This is a large adjustment — over 1% lower than in earlier statements.

The flow of easy money into corporations has been extended through most — if not all — of 2014.

Wall Street could take or leave the $10 billion per month trimmed from bond purchases as long as the virtually free money guaranteed by low interest rates keeps flowing with no real end in sight.

Corporate Cash Cow

The rate banks pay on overnight loans, or the federal funds rate, was at 4.5% in late 2007. As the recession bit into the economy, it was slashed to 0.25% and has stayed there ever since.

Long-term rates quickly followed suit and fell from over 5% in 2007 to record lows near 1.5% in the second half of 2012. Since the beginning of 2013, 10-year Treasuries have crept back to 3%, still well below normal levels.

Corporations capitalized on the low interest rates by issuing $18.2 trillion of bonds worldwide since 2008. Currently outstanding corporate debt has risen over 50% to $9.6 trillion over the same period.

Many of these loans were simply created to push corporate debt obligations out as far as possible. Instead of using them to create growth, it just delays loans from maturing until 2017, 2018, or 2019.

Interest paid by U.S. businesses peaked in 2007 at $2.83 trillion, and then it fell sharply to $1.34 trillion in 2011, the last year data is available from the St. Louis Fed.

At the end of the recession in 2009, companies listed on the S&P 500 paid roughly $4 a share in interest per quarter. Now, they are paying around $1.50 a share in interest on average.

These dramatically lowered interest rates account for an estimated 50% of total profit growth, not including indirect savings from lower leasing or rental costs.

Stock buybacks using debt-fueled funding have also been very popular and have provided quick boosts to stock prices and created earnings per share increases that are not based on growth or performance.

In fact, earnings have tripled since 2000, back when the economy was in far better shape.

The Fed has created a massive boom for corporate America through historically cheap debt and that is what the markets wanted to keep most of all. The Fed capitulated and the markets rejoiced.

Meanwhile, the EBITDA margin (earnings before interest, tax, depreciation, and amortization divided by total revenue) operating profitability peaked at 25.6% in late 2007 and recently fell below 20%.

Of course, this can’t possibly last in perpetuity. Debt will become more expensive, and payments will eat into profit margins.

We have not seen the last time the Fed will disappoint markets, create a volatility spike, and ultimately drive losses for investors.

Still On Shaky Ground

Going forward, the Fed and anyone in the market have a handful of things to remember that should temper the irrational exuberance we’re seeing in the market.

First, Fed policy is overly dependent on creating artificially high asset prices to alter economic behavior for investors and companies. The economy has not substantially improved enough to subsist on meaningful corporate growth, consumer spending, or housing sales.

Secondly, the impact of easy money through abnormally low interest rates is hard to quantify, especially in the short-term. Bullish markets that overextend their gains on very uncertain stimulus will inevitably see very disruptive corrections.

Finally, the Fed is not the only central bank that is actively pushing asset prices higher and fighting to maintain economic and financial stability. China, Japan, and Europe are all using extraordinary measures to intervene.

If any of these major economies see demand that is too weak, experience corporate or bank liquidity and credit crunches, or fail to juggle sovereign debt, the domestic economy will take the full brunt of the blow.

The Fed has fully deployed all of its tools to spur growth while expanding its balance sheet by about $4 trillion with little real effect. Economists put the total return for the Fed’s intervention as low as 0.25% of GDP.

As we close the books on 2013 with large gains for the markets and on a high-note for the Fed, we know what to expect for now. The Fed will have to continue pushing you to put your wealth into the market, and the big players will keep holding the rallying market hostage as they rake in massive profits.

However, the cost has been too high. The Fed may push the day of reckoning well into 2014 or beyond, but there is no way around the correction and burden it will place on us all.

Take Care,

Adam English

Adam English

PatternDynamics: Following The Way Nature Organizes Itself to Deal with Complexity

PatternDynamics: Following The Way Nature Organizes Itself to Deal with Complexity.

by David MacLeod, originally published by Integral Permaculture  | TODAY

The natural world is staggeringly complex, and yet amazingly elegant in how it manages the multitude of interconnected parts into organized, unified wholes that thrive. What is the secret for harnessing this elegance for use in human systems? Tim Winton found that observation of the most common patterns found in the natural world led to the development of high level principles which can then be used to address the most complex challenges that human systems face.

After learning some of the common patterns found in all natural systems, we can then begin to recognize these patterns in human systems , and learn how to balance the ones that are skewed, and to integrate in the ones might add a greater level of enduring health. We can “make a deeper difference by changing the system!”

change the system

PatternDynamics is a systems thinking tool for creating systems level change that Winton has been developing over 20 years as he’s worked in diverse fields, including: environmental services contractor, organic farmer, sustainability educator, designer, project manager, consultant, executive leadership, and corporate governance.

What is unique about PatternDynamics is that it combines the patterns of nature with the power of language, to produce a sustainability pattern language.

In a recent paper by Barrett Brown, referring to a study he had done in 2012 of top performing organizational leaders, he observed that these top leaders “use three powerful thinking tools to design their initiatives and guide execution. They are (a) Integral theory, (b) Complexity theory, and (c) Systems theory. These models help them to step back from the project, get up on to the balcony, and take a broad view of the whole situation. They use these tools to make sense of complex, rapidly changing situations and navigate through them securely.”

And famed Permaculture teacher Toby Hemenway (author of Gaia’s Garden)recently posted on his blog the following recommendation: “To enrich our ability to use recipes and put them into context, without engaging in a full-blown design analysis from scratch, we can use pattern languages. The term was coined by architect Christopher Alexander to mean a structured grammar of good design examples and practices in a given field—architecture, software design, urban planning, and so forth— that allow people with only modest training to solve complex problems in design. … Like recipes, pattern languages are plug-and-play rather than original designs, but they allow plenty of improvisation and flexibility in implementation, and can result in rich, detailed solutions that fit. A handbook of pattern languages for the basic human needs and societal functions, structured along permaculture principles, would be a worthy project for a generation of designers.”[my emphasis]

PatternDynamics is firmly rooted in Integral theory, Complexity theory, and Systems theory, and as well contains Permaculture’s emphasis on patterns and principles (PatternDynamics was developed during Tim’s time as Director of the Permaforest Trust, a 170 acre Permaculture education center in New South Wales, Australia). In addition a fifth strong influence was Alexander’s ideas on pattern languaging. These five robust theories and practical application tools provide a very firm foundation that will continue to support PatternDynamics long into the future as it continues to evolve. It is probably not the recipe book that Hemenway envisions, rather the patterns are more like a set of key ingredients from which we are invited to collaborate to co-create the needed recipes for a given context. The goal is to facilitate collective intelligence.

Tim Winton“The key to complexity is systems thinking, and the key to systems thinking is patterns. The key to patterns is using them as a language – an idea I borrowed from architect and mathematician Christopher Alexander’s book ‘Notes on the Synthesis of Form’.”
– Tim Winton

Systems thinking itself is complex and difficult to learn, which is why the series of Patterns in PatternDynamics can be so helpful in simplifying that complexity – “If we don’t have a symbol for something, it does not become enacted in our reality” Winton says.

order_chart

Secondly, as these Patterns become part of a shared language, this gives us the ability to collaborate with others –hence the facilitation of collective intelligence. Noting the increased complexity in our human systems, Winton states that “No longer is any one person brilliant enough to solve the complex problems we face; we really have to use our collective intelligence.” This innovative method of facilitating collective intelligence is proposed as an essential 21st century skill.

Speaking for myself, after completing the Level II training in PatternDynamics, I notice that I am starting to see “wholes” much more often, in extremely diverse systems. Everything from systems at work in my own body, to systems in organizations I’m involved with, to the systemic problems facing our world, and all the way up to long term processes going on in our universe. Being able to see these wholes then helps the next step – ideas are flowing more easily on how to balance and integrate to improve the health of the systems I am involved with.

Therefore, it is with some excitement that I am preparing to host a One Day PatternDynamics Workshop on January 26, 2014 here in Bellingham, Washington. Click Here for more information about this event. A workshop is also being held in Oakland, CA on January18th – more info here.

Related:

To read a longer article I co-wrote about an introductory workshop I attended last year, go here: Integral Leadership Review

 

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