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| El-Erian, Sustainability And Central Banks in forum [Market-Ticker]
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Nomennescio
Posts: 63
Incept: 2012-01-16
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There's no place like home. There's no place like home...
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Skybluepink
Posts: 381
Incept: 2007-10-20
RI
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Bertdilbert
Posts: 2661
Incept: 2008-12-22
CA
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Quote:I'm going to focus just on the US, because (1) I understand it better than the European and other situations, although when it comes to Europe they're not that different than we are Heh, simplified, The Euro has a Germany. Germany is the engine with a bunch of swaying cabooses in the tail of the train. The United States has no Germany, just a bunch of swaying cabooses and a Federal Reserve.
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Dear Euroland: Relax, Germany has a plan for your money!
Political Capital Defined: We are out of money but will tax our citizens for whatever it takes to "SAVE" the Euro.
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Lipdorn
Posts: 11
Incept: 2011-12-28
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@Bertdilbert
Fine. Germany may be an engine, but at present the drive train is in neutral. It's simply revving high, using fuel and not actually doing anything productive.
They're producing and exporting, except they have to lend the money to broke people for those broke people to buy what Germany is producing and exporting.
Think Germany will get repaid? Is it still "productive" when they ultimately gave away most of what they produced?
Same with China and the US. Ultimately it will be China that will have lost in that exchange should the US treasuries prove worthless.
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Mari
Posts: 1012
Incept: 2010-03-05
Central MD
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I believe, I believe! I know that any day now the government leaders will see the light, shout Amen!, and start putting everything back in order and reducing our debt.
Oh, forget it, there's not enough Kool-Aid in the world to believe that.
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I bleed purple and orange!
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Mayorquimby
Posts: 13909
Incept: 2008-09-18
The Archaic Past
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Fed keeps giving the politicians an inch and they take a yard. At some point, the Fed will fold its hands because it will be screwed either way and the poles will scream and yell (behind the scenes of course - ie "WHAT DO YOU MEAN YOU CAN'T PRINT ANY MORE MONEY?!!!) and that will be that.
When that happens? No clue.
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They who wish to hurt you, work within the law.
- Morrissey
Gold is theft.
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Ishmael
Posts: 4731
Incept: 2008-02-25
Los Angeles to Oklahoma, at least temporarily for now!
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Let me propose an amendment to what you said Karl. If the govt ultimately stands up and does the right thing then the S&P will drop into the sub 600 range. If the govt decides to not do the right thing or the dumbasses that are elected officials postpone to long the S&P is going to zero, because just like other countries in the past and there will be a big implosion and things will collapse in upon themselves similar to the Weimar (except we do not have a people like existed in the US and Germany in the 30's). Probably the military will have to step in and run things and we all know the military knows so much about economics and since they are one of the big offenders the economy will basically become nonexistant and maybe go to a barter system. Who wants to accept a piece of paper issued by a BK govt. Basically we are Argentina when the junta was running it during the 70's. I do not even think they had a stock market because no one trusted anything -- govt, money, bankers and especially markets. Market only exist when you have law and order which we will not have.
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Hope is neither a good strategy or birth control methodology!
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Josecitomadera
Posts: 554
Incept: 2009-03-20
Miami
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Quote:Your belief in the avoidance of collapse in the markets and ultimately government services and tax base is founded in one thing -- what El-Erian has outlined up above in his one-sentence summary. My belief rests in that if Japan got away with central bank games for 20 years, then the Almighty US and FED will get away with it for much longer indeed. It's been 4-5 years already and I feel it'll be another 15-20 more and nothing is going to happen. I feel with almost a 100% certainty that will be the outcome. That sub 1% feeling otherwise is what keeps me checking up on the TICKERS. It's the same feeling that one has with the lottery. The chances are next to zero at winning but there is always that chance that you could get hit with the mega-millions.
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What do I know, I'm only an ILLEGAL IMMIGRANT.
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Zarathustra
Posts: 5961
Incept: 2009-04-29
Funkytown
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Jose,
Japan=saves(self funded) and huge industrial base...
USA? Don't make me cue the monkey.
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"And in knowing that you know nothing, that makes you the smartest of all." - Socrates
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Ishmael
Posts: 4731
Incept: 2008-02-25
Los Angeles to Oklahoma, at least temporarily for now!
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Zara -- Agree with everything you wrote plus one more thing. When Japan imploded, the rest of the world and especially the US and Europe continued to operate fairly normally with the US and Europe buying their crap. Now that the whole world has imploded there are no more bagholders to ship your crap to and generate cash to keep things going. Japan was kind of like the bow of the Titanic going under and we are the stern. If you were sitting on the stern you could say, well it took 2 hours for the stern to go so we still have several hours more so surely someone will stop by to save us.
Nope the bow went under and then with in a few minutes later the stern was drug under also.
There is no extrapolation of either timeline! Once again we have a linear thinking argument in a nonlinear world! This requires calculus to calculate not algebra!
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Hope is neither a good strategy or birth control methodology!
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Zarathustra
Posts: 5961
Incept: 2009-04-29
Funkytown
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Spot on, Ishmael....
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"And in knowing that you know nothing, that makes you the smartest of all." - Socrates
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Widgeon
Posts: 13481
Incept: 2007-08-30
Region formerly known as the United States
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That which is not-sustainable cannot be made sustainable ... by definition.
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Ishmael
Posts: 4731
Incept: 2008-02-25
Los Angeles to Oklahoma, at least temporarily for now!
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Basically I have found the time line to be 50 percent of the time from the last incident to the next incident and 2 or 3 times as much action is required to get even the 50%.
1987 to 2000 is 13 years.
2002 (time we started recovering) to 2008 is 6 years.
2009 (time recovery started) to 2012 (my educated guess when next blow up occurres) is 3 years. At most they will be able to hold off to 2013.
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Hope is neither a good strategy or birth control methodology!
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Jstanley01
Posts: 8182
Incept: 2008-07-30
San Antonio, Texas
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Tickerguy wrote..Do you believe that any of the political bodies in power today will do the sustainable? When they have been brainwashed their entire educational and career lives by Commies, Keynesians, and NeoCONs alike? That governments can "stimulate the economy" and that central banks can "prevent depressions"? In short, when they believe that the governments which they run are more powerful than markets? Notwithstanding the crumbling into the ditch of the totalitarian state known as the Soviet Union within the last generation? After market forces caved in its skull? Oh no, hell no I don't believe it. AT ALL.
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You can't cheat an honest man. ~P.T. Barnum
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Bertdilbert
Posts: 2661
Incept: 2008-12-22
CA
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Ishmael,
I took a different approach to this. I used the time frame of a known financial manipulation called the London Gold Pool which lasted 7 years before collapse and started from when the bull started and kind of penciled in 2014 as the max before it all falls apart.
One of two things is going to break it. Interest rates or a falling dollar. Higher interest rates kill asset values and the lower dollar will strangle the economy with higher prices. Either way it is game over. 2014 is my outside guess, with a leaning to before we hit a full 7 years.
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Dear Euroland: Relax, Germany has a plan for your money!
Political Capital Defined: We are out of money but will tax our citizens for whatever it takes to "SAVE" the Euro.
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Marvinmartian
Posts: 751
Incept: 2011-03-16
Pasadena, CA
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Jstanley01 wrote..When they have been brainwashed their entire educational and career lives by ... The Age Of Reason was replaced by postmodern cultural relativism in which there is no absolute morality or even an objective reality. This cultural relativism has infected much of the humanities departments in academia. The engineering and natural science departments are pretty much safe because you have to believe in an objective reality to get anything done. Wikipedia wrote..An Age of Enlightenment (or simply the Enlightenment or Age of Reason) was a cultural movement of intellectuals in 18th century Europe, in order to reform society and advance knowledge. It promoted science and intellectual interchange and opposed superstition,[1] intolerance and abuses in church and state. The original Age of Reason was triggered by the invention of the printing press. We have yet to make effective use of the internet. It may well trigger another rethinking of the foundations of society. |
Barryintacoma
Posts: 1
Incept: 2011-09-22
Tacoma, WA
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First time poster here with some questions for the far brighter people I see posting here. Some background before I ask my question: from my perspective, the world’s finances are kind of like a sewer, and one of the biggest, best defined turds in the sewer is the RMBS / Foreclosure / Bailout fraud. Basically I think there’s 5-10 Trillion Dollars of fraudulent foreclosures since essentially the servicers are stealing houses - those REMICs are long gone, bailed out, or settled for pennies, especially the ones that were non-GSE. I’ve researched many dozens of titles on properties in various stages of foreclosure and this seems to be the rule. I’ve always been a chronic bull, but now I see nothing good happening for many years without this fraud being addressed. How can any country recover from a $5-10 Trillion loss, especially with the collateral damage of lost rule-of-law and contracts, and basic property rights? Seems to me the damage will just fester with lost confidence and get worse like Karl’s been warning us for several years. I really have no idea of where to invest besides survivalist type stuff, friendships, and physical PMs. I understand the argument for holding cash in a massive deflationary spiral, but eventually it seems like the guys with the guns will throw the guys with bonds under the bus and print some how into hyper-inflation if things go violent in order to keep their power, so I'm scared of cash too. It seems to me like a hyper-inflationary move to calm the masses could involve writing off all those fraudulent loans, kind of a jubilee of sorts. So now I read this post referring to Pimco’s El-Irian, and another post about Pimco / Bill Gross yesterday over at zero hedge : http://www.zerohedge.com/news/pimco-take....I think Gross seems to be focused on the same MBS Turd as me. It’s really a big enough turd that if one could predict where it’s going to flush out, one might be able to invest accordingly. I’ll cut and paste here a comment from a (smarter than me) ZH commenter bankruptcylawyer here: ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ bill gross. 3 scenarios. 1) he is in bed with the fed. ----fed monetizes and is rewarding him for something by letting him frontrun the banks on superior info OR fed is NOT going to monetize and regular old mom and pop intentionally get stuck with the loss and gross claims he didn't know while he blames the fed. fed deflects the blame by saying that they cannot interfer with the economy by doing more monetization 2) he is the enemy of the fed. ------fed is trying to reward the banks but he is stealing the banks profit by bidding up their risk asset mortgages and is weakening the profit margin of the fed shareholding banks thus making it even MORE likely the fed will have to pull off more monetization to support their shareholding tbtf banks OR when the fed stops monetizing bill gross can turn around to his investors and tell them that the fed is to blame for all this deflation because the fed created the MBS bubbble to begin with. the public is already angry with the fed and while bill gross might get blamed for his personal performance, the greater story is the fed is going to get a lot of angry pensioners yelling to shut down the fed because of the 'close the fed meme' ---meanwhile the fed will be claiming that the publics losses could have been averted with more monetization. inflation will be running high at this point and the fed's statements will not sway the public sentiment against the fed. 3) he is just 'another investor' albeit particularly big and doesn't give a rats ass about the fed. .---------and either way IT MAKES NO ******* DIFFERENCE BECAUSE THE MACHINE IS MUCH BIGGER THAN EVEN THE SINGLE BIGGEST INVESTOR. ---------- HM...so , ...conspiracy theorists , you decide which is more likely. i vote for 3. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ So my question for Genesis and others is what do you think about those 3 options? How / where do you see the MBS / foreclosure turd flushing out? |
Jstanley01
Posts: 8182
Incept: 2008-07-30
San Antonio, Texas
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Marvinmartian wrote..We have yet to make effective use of the internet. It may well trigger another rethinking of the foundations of society. I hope so. Because unfortunately, the brick wall that we are careening headlong into is not going to respond to the current linguistically-contrived and propaganda-based deconstruction efforts. Which that is all that's being done now, basically, by those chicken-chokers who make up the post-modern kindergarten-level circle jerk which we call TPTB. "Blah, blah, blah, blah, *****ing* blah." Yeah, keep buyin' the dips, chumps...
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You can't cheat an honest man. ~P.T. Barnum
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Firefly76
Posts: 49
Incept: 2011-08-09
Houston TX
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Just remember people. "Now you know and knowing is half the battle" Just being aware and prepared gives you an advantage over the sheeple.
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Sharon
Posts: 4352
Incept: 2008-02-10
Odessa, Missouri
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Marvinmartian: "There is no longer such a thing as objective reality," would pretty much cover it.
All cultural structures are pretty much bull****, although they do have the advantage of creating a common frame of reference that defines the way we structure reality, and we all insist on a certain amount of predictability in our social behavior. So, for arbitrary and pragmatic reasons, bull**** works, up to a point.
It ceases to work when people get to the point where they will deny objective reality in order to affirm bull****--which, of course, they will always do, and always must do, to keep predictability and common frame of reference going. I guess you start to get into real problems when there is an absolute refusal to take any kind of bearings from objective reality, or admit that there is such a thing, independent of bull****.
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Semper ubi sub ubi.
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Josecitomadera
Posts: 554
Incept: 2009-03-20
Miami
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Quote:Jose,
Japan=saves(self funded) and huge industrial base...
USA? Don't make me cue the monkey. Guys, your answer to me sounds like- 'if my grandmother hadn't died she'd be alive' We can seek reasons for things not happening till we are blue in the face. To me, it's simple. Japan has been subsidizing it's economy for 20 years and APOCALYPSE NOW did not occur. Whether it was internal savings or Mickey Mouse and Donald Duck, the point is they did not collapse into a fiery economic Armageddon. Yes, their markets are down 80% and yes, times are tough over there but they are still #3 so for all the grief that was allegedly spoken about Japan the worst that happened was a one notch down drop. Same with the USA, they'll invent some malarkey or gobbledygook to keep it going just like they have for the last 5 years. This economic end of days stuff is starting to sound more like the Evangelicals who are waiting for their precious RAPTURE to come. The RAPTURE ain't never gonna happen neither will this. Well, the RAPTURE ain't never gonna happen but this has a sub 1% chance of happening.
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What do I know, I'm only an ILLEGAL IMMIGRANT.
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Genesis
Posts: 130760
Incept: 2007-06-26
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No they didn't. They were exporting all their stuff to us.
Now who are we going to export all our stuff to? Uh....
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I don't care if it makes sense -- only if it makes money. -- Me
Bank (n): See scam, fraud and theft. Eat a bankster -- they're low-carb.
What part of "shall not be infringed" was unclear?
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Bsfootprint
Posts: 965
Incept: 2011-02-27
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Genesis wrote..You believe that politicians and governments will do the sustainable things. As ever:  Edit: How can the Titanic's passengers alter its course? Will replacing the captain and crew do the trick? Maybe. Maybe not.  "Insanity is doing the same thing and expecting different results."
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When I hear central bankers are blowing bubbles, I like to picture a large, happy and well-endowed male chimp named 'Bubbles'...
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Aethor
Posts: 130
Incept: 2011-11-15
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Jose,
The fact that someone managed to do things in the wrong way and still avoid the disaster, does not mean that he can do it infinitely.
Someone can have 50 k income and spend 100k a year, and extend this through 20 credit cards over 5 years, but does it mean he will never go bankrupt? And when he can't get any more unsecured credit, he'll have to cut spending or mortgage his home; and after he does mortgage his home, if he doesn't cut spending, he'll lose it.
The fact that he could stretch the situation to 10 or 15 or even 20 years beyond his means is not a proof that he can do it forever.
Yes, the government can find one way or another to avoid the disaster for another year and then another year. But same as my example, with switching from unsecured to secured loans, in each step of this kicking the can down the road, the consequences get worse and worse.
And as the condition gets worse, the chance of a disaster gets higher, from your 1% to 2% to 10% to Greece. Once it explodes, if you kicked the can down the road for 10 years, the consequences will be bad; if you kicked the can for 30 years, the consequences will be the "end of days stuff".
Keep in mind that when the government spends, it uses some of actual value produced in society; and this actual value, produced over a period of time, is finite. The government takes it from the people that produce and gives to others. The more it takes, the less of it remains to those who made it in the first place. Financial shenanigans can only hide this process, or shift it from one place to another (like inflation concentrated into houses so you feel less of it in other areas) but do not alter the overall picture.
As people who produce get less and less of the result of their work, they feel less interested in producing, and also they have less with which to maintain (or increase) the production; thus the base from where the government takes the value keeps decreasing.
As this base keeps decreasing, the government must take ever higher percentages of value, so the process speeds up exponentially.
Eventually these two charts - government taking from people, which goes up, and real production, which goes down or at best stagnates, must meet. This is a mathematical certainty; the only question is where (in how many years or decades) do they meet, but it's certain that they will.
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