CRASH 2: Focus on the Page One stuff

Why the tricksters’ top ten takeaways will tear up everything

Over the last fortnight, The Slog has been starting more of an urgent countdown to Crash 2. I’ve begun the process  because the statements, attitudes, preparatory behaviour, central bank policies, and market dynamics being displayed are becoming so blindingly obvious now, their existence can only mean one thing: pretend time is over, and from here on nobody in the élites (beyond the political dumbos) will give a monkeys whether Dean and Becky in Essex or Nantes or Ohio work it out. The Slog offers some thoughts on why the MoU’s have failed as usual to read Page One.

Zero Hedge is an excellent site, but at times the obsession with technical jargon displayed by Tyler Durden in his many existences can get trying. I offer this extract from yesterday’s piece about the VIX as an example:

‘….the Fed and BoJ’s work to open-endedly compress realized volatility is to blame – but the current VIX levels would imply a notably lower (than 2012) realized volatility on average throughout 2013. However, the back-end of the curve remains steep (and unyieldingly less ebullient), the skew is extremely complacent, and as every premium-selling call-writing ‘this-is-easy’ trader knows, picking up nickels in front of the steam roller works well – until it doesn’t….’

Well for God’s sake Tyle, as everye foole doth know, skew something complacently up your back end, and before you know it every call you write realises enough ebullient volatility to create cold fusion at the very least. But if I can put into words what Mr Durden is saying here, lots of nasty folks all over the world are deliberately and artificially depressing the reality of the fundamentals. This means that the VIX volatility index is far lower (ie calmer) than it should be. Even more interesting (as shown here yesterday) quite a lot of sociopaths at the level below the Beelzebubs somehow seem to know that the key ‘VIX suppressant’ timezone is likely to be February-June this year. Not only are they betting on a calm VIX (via the VXX betting pit) they’re also making precious-metal puts of a bullish nature – especially in silver.

What the central bankers and other Bilderberging, thieving members of the politico-media crew have spent the last two years working out is exactly how to boil we the frogs…..without us noticing before unconsciousness renders us supine. Lest this sound a tad Marxyntaxical, let me set out below by numbers what the key facets of this policy have been in the First World. I call them my Top Ten Takeaways.

1. Zirp. The money we used to earn from giving our money to banks has been taken away.

2. Tax. Every type of tax we pay (using everything from personal allowance caps to upped speeding fines) has been increased.

3. Welfare. The credits, services, and subsidies that save most of us money have been reduced, and in some cases removed.

4. Quantitative Easing. The currencies we use to buy goods and services are having their value eroded by sovereign debt, QE, and in some cases direct money printing.

5. Energy. The forms we use to cook, heat, drive and light up the darkness are increasing in price at a rate far beyond anything justified by either demand or conservation.

6. Credit. Aside from the odd piddling and wastefully managed government scheme here and there, credit to purchase durables and property has largely dried up. By definition, this reduces one’s current and future standard of living.

7. Food. Media owners and distributive opinion leaders are giving us clear warnings about the price of food being hiked substantially in the near future. They just haven’t explained why yet.

8. Wages and salaries. Aside from the top 3-5%, the great majority (over 80%) of ‘middle class’ consumers have seen their real salaries eroded since around 2003. That fact applies whether we’re talking the US, the UK, or Greece.

9. Market fraud & manipulation. QE has indirectly caused those with a bearish view about stocks in 2010 to have been proved expensively wrong. The Libor rate was manipulated after 2007 globally to save the banks and cheat the investor. The price of gold has been capped, and that process is now becoming all-encompassing in the light of central banker plans for the metal. Because of smoke, mirrors and bollocks on the subject of sovereign debt, the bond market yields are artificially low, further reducing a fund’s ability to create decent returns for the retired….already hit by Zirp, QE and capped gold.

10. Both upstream and downriver, governments are reducing the individual’s ability to save for later life, and/or live off what they have saved. The UK has once again removed some tax advantages from pension savers. The US has effectively embezzled at least half of its public sector pension funds. Free healthcare is being phased out for the elderly. The Greek and Spanish national pension reserves have ceased to exist. Every French bank is guaranteed by the taxpayer: when they start falling over, French citizens will be powerless to stop their State pensions dwindling back to nothing. UK pensioners have been told they will lose inflation indexing, and probably winter fuel allowances/free prescriptions.

Listen to the vast majority of mainstream Western politicians, and you will find very few who would even admit that this process is taking place, let alone speculate about what its ramifications will be. Bromides like ‘We’re all in this together’, ‘Yes we Can’, ‘Your friend in hard times’ and so forth offer nothing beyond onanist drivel spurting across the airwaves to placate the proles. Honourable and honest exceptions like Austin Mitchell, Ron Paul, and Alexis Tsipras are straight with those who bother to listen. But as the American Spectator wrote this week, ‘Obama’s empty inaugural address offers nothing but more blind leadership’. It’d be a nice turn of phrase – if he really was a leader.

Now the ‘Spartist’ hard-Left view of all this is, of course, that the citizens of the West are to be made increasingly dependent on States that have been confiscated by neocon business and global banking. A new World Elite will emerge and the rest of us will be slave labour until we die and/or get liquidated by the Forces of Darkness. And to be frank, I do not doubt that some of the neocon headcases one occasionally stumbles across have precisely this result in mind. But the rest of the privileged few don’t.

What they calculate is this: to compete with Asia and South America, we need to cut wage costs; to pay off debt we need to inflate currencies; to take on credible new debt, relaunch currenci(es), and repair the banks’ balance sheets, we need gold to be almost completely appropriated by the sovereign banking system; to reduce political incompetence we need to have more technocrats and fewer elections; and to ensure no opposition to any of this gets off the ground, we need a two-speed, heavily regulated internet via which ISPs and the security services can monitor what everyone’s up to 24/7.

Then, they figure, we can get some serious growth under way, keep the East in check, reduce taxes caused by debt, write off the banking sytem’s debts, and return to Business as Usual….provided our view holds sway in 90% of all public media.

I’m not for a second suggesting it’s a fully written up plot hatched by the Elders of Davos, because the world doesn’t work like that…and the egos involved here are so Viagrad out of shape and proportion, there’s no way you could get even a fraction of these truly disturbed materialists to sign up to such a plan, even if it existed. But a general direction is there for all to see, and there is a growing Right Commentariat which thinks it just dandy as a potential road to salvation.

That is to say, there is a sort of expressed faith that goes like this:

“Right, now clearly the system has got a little out of kilter and the banking chaps have pushed their instincts just a bit too hard for the thickies to catch up. Equally, the senior executives of globalist business have filled pockets rather than fulfilling investment promises made to the shareholders, and so we’ve had to get the sovereign money captains to cough up. Thus we have had bailouts for the banks, and QE to keep up confidence in the stock markets, but we still have quite a few derivatives, bad bets and sovereign budget overspends getting in the way of further economic growth.

“This presents us with a problem or, to be more specific, a bill. And as clearly we at the top can’t be expected to pay it, those who in the long-term stand to benefit most materially from what we make and provide will have to do so. The best bet is therefore to make it impossible for them to get anything out of us on any level, to reduce the quite colossal amounts we spend keeping them in trainers, and charge them considerably more for rather less on everything else beyond the State’s remit.

“This will have two effects: sovereign and banking solvency will be restored, our Western products will be more competitive, and – most important of all – the People will grow a new hunger to consume like frenzied sharks. It’s all quite simple really: everything’s  under control, and there’ll be nothing to worry about so long as we can shut up the naysayers”.

Put like that, I could almost convince myself that we’re on the right track. Except, of course, for Page One. Page One is the bit very clever people always skip, because they are far to clever to have to bother with it. But whether they like it or not, Page One says the following:

* Shagging the currency raises the cost of borrowing to a point where insolvency must result

* Reducing the spending power and upping the costs of consumer living make it impossible for them to kick-start a recovery

* Inflating away the debt annoys the creditors, some of whom have nuclear weapons and hot-headed military officers

* Creating a new false level of energy costs (without investing bigtime in revolutionary new forms of it) must produce a spiral of higher prices, lower consumption, and thus lack of funds to dig up or tap into those fossil forms that remain. That is also going to cause any recovery to stutter to a halt quite quickly, as a result of spiralling costs.

* Last but not least, no State (privatised, omni-surveillant or otherwise) will survive if it loses feedback from the populace. In the end, all affection for and loyalty to the State disappears, new ideas are stifled, risk is avoided, and the very bases of healthy capitalist creativity are pulled away. Those who were standing on them simply hang to death.

It would be easier to doubt these outcomes if all five of them weren’t already apparent to a worrying degree. Both the US and UK sovereign debts would rapidly become unrepayable with even a fractional increase in borrowing rates. Squeezed middlers in the UK and US have proved unable to stimulate the economies there. The Chinese are already looking at gold as a way of dumping US debt in retaliation, be that a double-edged sword for them or not. Shareholder and boardroom greed have derailed new fossil energy exploitation over the last fifteen years. And the European Union is heading down towards the same high, firing-squad dead-end wall as did the USSR before it.

So that, friends, is why both we and they really are in very big trouble. That is why the Dark Legions are jockeying for position with increasingly brazen moves prior to Crash 2. That is why they think they can handle it. That is why they can’t really. And all of it is why right here, right now, everyone needs a plan to escape the blood-sucking realities of my Top Ten Trickster Takeaways to make the masses pay.

Cue 3000 comment threads asking “How?” But if I knew that, dear reader…..

68 thoughts on “CRASH 2: Focus on the Page One stuff

  1. “How?” – we are all different and it is up to us individually to find a way forward.

    “See your duty sir, and attend to it”, as Wellington is reported to have curtly instructed a young subaltern whose frequent questions about how to proceed in the coming battle were beginning to pall …


  2. Excellent summation John. Sometimes sit and think how pleased I am to be in my sixties, but dear God do I worry about my grandchildren.


  3. Sorry, John. growth is so “last century”. There won’t be any growth now and there is no intention, EVER, to return to growth. From now on,. it will be managed, rapid decline.

    Just as an affirmation of this, here’s what David Attenborough said

    “Humans are a Plague on the Earth” he says. (Didn’t I say something like that last year?)


  4. I’m mystified, John. You’ve lost me completely – or I’ve lost you, more likely.
    What the heck is the VIX? Or even the VXX ? What is all this about ? How did you get from being a whizz-kid in advertising to a Master in Econobollox?
    I trust – very much hope – that you are right about everything, because I know your heart (and your eyes) are in the right place, but I can no longer pretend to understand you … (I gave up after para. 1 !) I’ll return to it later this evening to try and reconstruct the deconstruction …


  5. Tullett Prebon (City firm) has just issued a report on the coming end of economic growth. Strong stuff. Their research dept. is well aware that peak oil for instance is much more fundamental than mere money, or bankers’ bad behaviour. No cheap energy, no economy.


  6. Good attempt Slogger, very difficult to write the problem in simple sentences, otherwise I would have a go too. And the issue flies over the heads of so many intelligent people.
    Anyone that thinks they would be put off by the technical language of the various Tyler Durdens on ZeoHedge, don’t be, most of the tonnes of material they write daily is very understandable, and they have a huge resource of people giving them info. They sometimes jump to alarmist conclusions without reason, but nobody’s perfect.
    (and no, I don’t understand Vix Vixx, Vycks, or any of these things either.

    Here are my few sentences-
    The greedy money worshippers have realised that the law doesn’t see fraud and white collar crime as something to either understand or bother about. So there is no cultural restraint on wholesale theft by financial people. If they get caught, they can pay the lawyers and bribe the lawmakers. Who is going to stop them.
    They are not happy with stealing all the money, they want it all. They know the middle classes are not organised, so they will take all their savings from them, and make them take on unpayable debts. The middle class is doomed. There will only be two classes, the proles and the gentry. SOme of the proles will do anything they are told for a few crumbs off their master’s table, and they will be commoner-law enforcement and the like. We will get a Brute-Squad before long.

    Everything is connected; the privatisation of NHS is part of the same theft of wealth; the reduction in welfare is to allow them to keep paying for a massive, supine public sector (they need the votes); the strangulation of small, independent business is to force everyone to work for large, bullying corporations and forget their freedoms; the planned conversion of coins and notes into debit cards is to allow them to tax and seize all your money; the weakness of leadership in government is to stop anyone acting on their grievances; the useless infantile press and tv who want raise a peep in objection; the stealth taxes on energy, transport, leisure, VAT, inspection charges, licenses, red-tape.

    I think this has been a long time coming, but is basically opportunist. I reckon the bankers can’t believe how this has fallen into their laps, but now they are going all-in for everything. Westminster won’t stop them, it is up to the lukewarm frogs.


  7. OT I know but still of interest.


  8. Pingback: John Ward – Crash 2 : Focus On The Page One Stuff – 23 January 2013 | Lucas 2012 Infos

  9. Funny how they all bang on about growth isn’t it? When we all know that they know there isn’t going to be any.
    What I have to ask, is this: Just how are the ‘elite’ going to maintain their wealth? Big properties in London won’t be worth a toss if JW’s predictions are correct, nor will oil paintings antiques, if fact most ‘valuable’ items by today’s standard will be worthless.
    In fact much of what I have written many months ago on this blog will come to pass if JW is right.


  10. Reading and understanding the VIX is just like any other chart – impossible to do accurately, if it were that easy I’d have been a billionaire within a week. Just like any other chart the VIX can and does give false readings and it’s absolutely impossible to know exactly what all the other 1000’s of investors are investing for.

    There’s no direct evidence, other than the stock markets have risen since 2009, that QE was the saviour of the markets, QE was introduced in 2008 and markets continued to fall, so that arguments shot. If you issue QE in a rising market it creates the illusion it’s worked because stocks have risen – QE’s not for stocks it’s money made available for lending out as credit and one of the conditions that the Central bank insists on is that theres an exchange for Gilts/Treasuries – hence why the bond market has a bubble and annuity/bond rates are rock bottom.

    China and Russia have obviously been concerned about the USA’s ability to repay its debts as since 2001 they’ve been ditching the US$ in preference for Gold.

    I agree that the outlook ain’t rosy, but it’s certainly not clear cut and politicians will do as they’ve always done hide the truth until it can’t be hidden and then change the story.


  11. I agree that JW’s article is great and I, too, sometimes, sit and think how lucky I have been. And I am in my 70s; too young to have been in the war and possibly too old to see the disaster that is coming.


  12. Biology has a nasty habit of destroying those who think they know.Unleash a depopulation mechanism,even if fed by distraction,and the decay will carry disease we are as yet unaware of.Surely this will precipitate a response from the dead eyed populace?


  13. But “the trillions in derivatives” nett out to zero.

    The problem is rather more simple.

    Western middle classes consume most of the resources on this planet.

    The emerging Chinese and Indian middle classes also wish to acquire a western lifestyle and each is going to be the size of the western population.

    That is why western metals, food and energy prices must go up. Either that or find and mine two new planets. …or western living standards must drop.


  14. We are in for bad times, but we can cope. You oldies may have a problem, but if you are young and fit you can still get out there and do stuff.

    Follow the Market Oracle because inflation is coming, not deflation and so share prices and houses will go up in value. Dont get left behind and dont load all your money into gold. I follow property and i can feel the market has bottomed up here in the North. Lots of buyers out there for half decent stuff under £100k. Bottom end of the market, but rents are high and will only increase in value. Now is the time to be buying in this area (and shares). Gold has had its run so get out. It will go up if the big disaster happens, but the likley hood of it happening is still low.

    Focus on the likley. The 18 yr housing cycle (12yrs up 6 down) is showing the time to be buying is now. 1995 was market bottom – 12 yrs up = 2007 peak. Six yrs down = 2013. Add on a nother yr for severe financial crisis and you get the housing bottom of late 2014. BUT now is also the time when bargain values are popping up.

    Shares have gone nowhere since 1999. What are the chances of them being the next decade long punt ?

    Gold has been up up and away for the same period of time. Switch from gold to shares ? I say yes and property. Don’t loose even more money John. You have sold your house, now use the money wisely.


  15. You are in a depressed state JW.
    We are thinking positive, enjoying the best things in life which are free, breastfeeding a new baby and looking forward to the future. I was in frankfurt earlier this week at a conference where the mood was distinctly positive and the outlook rosy for 2013/14. We strongly believe in the law of the jungle ( being of African roots) and survival of the fittest………..
    Life goes on……enjoy…..


  16. Might I ask you to take a look at the following charts, kindly posted by another Slog reader.

    My family have been involved in property and property development around the North West for the last 45 years and have never seen anything like the current and prospective environment.

    Your call.


  17. Well, still no clearer about what “Crash 2” means or what the implications are for the ordinary person. As I’ve said, many times on this board, the sun will come up tomorrow, people will get through their lives: some will man-up to the challenges, some will whinge and moan. Life continues, sometimes painful – but always worth enjoying :-)


  18. Sir,
    Have you talked yourself into a slough of despond..??
    Things are on the ‘UP’ now – but slowly.


  19. I’m afraid that I disagree Prof. As with anything, when there is more of something it reduces in value (a little bit like a fiat currency). There is no shortage of housing in this country – just a shortage of debt to buy it, which I don’t see changing any time soon.

    If you wish to tie your capital up in something that is immobile and a low hanging fruit for future government tax rises, then fine, but residential property is not for me. Even commercial property investment is a struggle at present with ever-changing retail demographics.

    In our current and future economic and social environment capital preservation will be everything.


  20. Yep things are definitely on the up.

    Inflation – up
    Unemployment – up
    Bankruptcies – up
    Energy costs – up
    Crime – up
    Suicides – up

    Happy Days


  21. “There is no shortage of housing in this country…”
    There is you know. We haven’t been building enough houses to keep up with population growth for a decade or more.
    Once (if ?) we start growing again, there be another housing boom, pronto.


  22. @ Paul J – with respect, I think you’re confusing open market housing with social housing (pretty much 80%+ of what is being built in the UK currently)


  23. If there was a wanted poster for these psychos who would be on them .
    Also which psyche profile would they have ? Would it be somethingike .’ Watches re runs of auschwitz death. Camp atrocities for entertainment .?


  24. The current batch of young people enjoy a far higher standard of living than the boomers. Their expectations are much higher, and cars, holidays abroad, decent houses and all the rest are standard fare. By the time they retire the boomers will be long gone and hopefully they will be able to find a way to support themselves in their old age. Working to 70 will be normal, though perhaps not full time. The UK’s overall standard of living soared in the last 20 years (admittedly from a low base) and now we are perhaps where the Americans were about 20 years ago!


  25. Try Africa and Argentina. I used to live in the latter, and there are thousands of square km that could be used for crops, but are doing nothing much. The Chinese are aware of that. Africa is very rich in minerals. They Chinese are also well aware of that. Pity that we soured relations with Africa for ever by all that colonial nonsense, racism and slavery. Pity that we are not really flavour of the month in Buenos Aires.


  26. The whole issue here, if JW if correct is, that with continuing decline in growth and income and employment, there isn’t going to be much at all to provide an investment opportunity, in fact, those that still believe there such a vehicle at present are, in my opinion, deluding themselves, and ignoring the obvious precarious state that we are in, and seem to be operating on the basis that this is a ‘temporary’ blip and all will be normal soon.
    I say again, I don’t believe there will be a ‘crash’ as such, more a slow but, relentless decline into abject poverty for most. The politicos can only keep up the pretence for so long but, eventually the truth will emerge and then it will be too late.


  27. Interesting article John,
    When they decide who are the ones to go, who will enforce it.
    Regarding one of your correspondents, ref a virus to bump of mankind. I believe it was tried with the Aids virus. The unfortunate thing was, as the gene pool originated in Africa, the virus affected everyone, so it was a home goal.
    Also if you read the history of the Great Plagues in Europe and the UK, it allowed lots of people to improve their status in life and took most of the power from the established church, who even though they had a direct line to God?? The Plague still carried on.
    So look on the bright side

    I am renting a place in Spain and using this site to learn Spanish


  28. I have no doubt the earth has suffered many ‘plaques’ in it’s impossible for the human mind to envisage it’s length of existance, the thing that people like Attenborough never seem to comprehend is the Earth will continue to turn AND support life what ever we do and long after we are gone, there is much evidence for this, but as they delude themselves by entrapping their intellect in a pseudo scientofic-pagan form of thinking, they blame any one outside of their circles as some sort of sub human parasite, on which they are blind to who sucks the life out of who.


  29. We are on what I call “the road to Nairobi”. If you go to google maps, satellite image, you can zoom into the Kibera slum. On the very perimeter of the north eastern edge of the slum is the Royal Nairobi Golf Course.

    It is not an exaggeration to say that the greens on the golf course have a more abundant supply of water and care than the human beings over the fence in the slums.

    Unfortunately this is the road we are on. There will be multitudes who will look at you totally baffled by why you are so negative. They have disposable income of many thousands of pounds a month more than people living in close proximity. But generally people live in communities of similar wealth, so the dire poverty of their neighbours is not seen or felt in their comfy middle class enclave.

    All around is evidence of a massive divide opening up between those who are still able to command a decent rate for their labour, and those now powerless and confined to relative poverty.

    Once the finances of the government finally break, and massive cuts are forced on condition of bailouts by the IMF etc, the support that millions get in this country will be pulled from under them. There are millions who receive high levels of rent benefits, who once it is removed, will be forced to accept “3rd world” levels of accommodation. And currently a family with £20k income and 3 children gets £6,920 in child tax credits alone, let alone other benefits such as child allowance. The cut in income for those dependent on this government largesse is going to be shocking to witness, and will put a massive strain on the cohesion of our society.

    So one of the biggest challenges we face isn’t just how we protect/preserve our own standard of living after crash2, but how we hold together our society when about 30% or more will be forced to accept a standard of living not seen since post war days.


  30. Well i have been involved in property for 20 yrs now and i am telling you the time to buy is now. I am buying and having to compete with many more people at the moment.

    North housing prices are offering good value and excellent in the more depressed areas. Current prop i am working on will yield 14% gross.

    No housing shortage ? You are having a laugh. Within 5 minutes of walking into a property fresh from the estate agent last March I had someone asking to rent it.

    I couln’t give two hoops if property doesn’t go up for 10 yrs. If you secure a gross yield above 12.5% you are going to do very well.

    My call is get stuck in and don’t miss out.

    Mate in my area is just working on a 3 bed semi. Purchase price £120k, renovation £20k. Min sale price £185k. High sale proce £215k. Thats a minimum 32% return in 6 mths. In Yorkshire.


  31. We need to wean off state help, but this will mean the state has to shrink. So if they are going to really do some structural changes and cut off the crack / heroin support payments they will have to drastically cut taxes and government.

    I think it will be difficult, but also cathartic. The current situation of paying 6m people to not work and then importing the labour to replace these non working people is madness.

    Lets simplify tax and have just one tax rate for starters. that way we all understand fully what we are being charged and what services we get in return. Then lets up the tax free allowance (inc zero nat ins) to £20k and see how many people will get off their arses and work hard (a lot more i reckon).

    There is so much positive stuff we can do. So it is not all doom and gloom. We will have bad times, but we will develop some decent solutions.

    I think our decent will be slow and steady (much better for society). The current system we have, has taken 30-40 yrs to really develop and so it is not going to shatter over night.

    Lets come back and see where we are in 20 yrs time.

    In fact lets hear some SOLUTIONS from everyone on this thread. I have mentioned simplify income tax / nat ins and lift the allowance rate. Anymore ??


  32. Dear John,
    You ask HOW? Ok, here’s what I have done/am doing:
    1. Property = only for cash generation. expect no capital appreciation (far from it). using the most intensive form of rental (currently achieving 14% returns)
    2. Growing food. developed raised beds and bought seeds which are safely stored away
    3. Doubled my water butt capacity (sounds kinky)
    4. Installed a wood/coal burning stove in one room so we can live there and otherwise switch down the system. we’ll forage locally if we have to
    5. invested in 3 oil lamps to provide continuity of light, fuel, and long-term lighting options (not about to rub 2 sticks together)
    6. storage of dried carbohydrates and canned vegetables (store with silica gel packets to prevent moisture and deterioration)
    7. divested into gold, bought in cash (installed safe) – too late, but better late than never
    8. offshore sterling account in CH (no, not for tax evasion, simply in case there’s a full collapse of UK banks)
    9. bought a gun (with license)
    10. got a second passport which i am eligible to by birth last year just in case we need out fast
    11. going to a small and little known tax haven somewhere in europe this year with a view to buying and establishing residency and hanging out there if financial repression starts moving in the direction of possession of assets
    12. bought lots of wheat bags which are a very efficient way to keep warm
    13. invested in skiing clothing from charity shops and packed them away just in case
    14. focussing on my “troop” and taking responsibility for parents, brother, etc so that they are protected in the event of fallout
    You may well think I’m completely mad, but it is my view that the financial eco-system is poised on a knife edge and all bets are off. I hope there is something here which is useful to someone :). Ironically so many people write about the unfolding tragedy and scenarios and so few offer solutions. after a while it can become introspective navel gazing.


  33. Karl Marx once wrote that the history of the world was the history of production. Of course his great contribution to knowledge was an exposition of the capitalist mode of production. That said he was aware as early on as the writing of the ‘Communist Manifesto’, along with Frederick Engels, that the next mode of production would have to be one that benefitted all men and not one with a powerful elite and ‘the rest’. Cue Robert Tressell.
    His book ‘The Ragged Trousered Philanthropists’ has been read by many and of those I’ve never heard anyone say they were not inspired by it. Strangely though I’ve never heard any enthuse over the chapter entitled ‘The Great Oration’. ( This only appears in editions from 1955 onwards. ) For my money this IS the blueprint for the next mode of production, at least it strikes me as being water-tight.

    PS. My mum used to rub VIX on my chest as a kid.


  34. Mr Ward.

    I think there is a real kicker in this or a hangmans noose for all the economists / politicians out there in the end who go on preeching it is all okay, getting better, etc.

    Even the devaluing of a currency fails like any other financial manipulation and the ones you mention and many more if it cannot get past this single point.

    “If it costs say ten quid and you cannot afford ten quid then it stays on the shelf unsold and by that it implies no trade and no profit”.

    Falling earnings and revenues with no way to support the asking price for any asset except by the FED, BOE, BOJ and ECB creating ever more liquidity. Now if there was *NO DEBT* we might be able to get over it.

    As a sidenote to the debt, me I am just a loony, but the Keynes mechanism they abused and in a way allowed the unlimited debt may have been the poisoned chalice drank a long time ago.


  35. Back to basics – to deal with all the above (What another gentleman has called compressive contraction) and survive in a meaningful sense of not being bounced from once crisis to the next as they roll on down, you need to be able to control and provide for yourself and your family the following:

    Social and Personal Relationships.

    If you can’t grow your own food or have access to a community where you can barter surpluses, your stuffed, unless your very rich, you will have to make do with rationed fatty gloop from the neocon food conglomerates.

    If you don’t own your own property outright, your stuffed unless you have relatives that do you can live with, because you need income to service the debt and your debt costs are not decreasing but increasing and your money income is not.There will be no debt forgiveness only penury and misery for those not in command of capital. Expect to move and expect no sympathy.

    If you can’t live in your dweliing of choice with minimal energy demands that you can provide then your stuffed as energy costs spiral into the infinity of the loss of a very precious and scarce resource.

    In short you need to be living in a small community that grows food, has good water and minimal need for expensive frequent use of the motor vehicle and the supply of bulk mass produced energy for you daily needs. That same community will still have some artisans and trade people who know how to repair and fix things. You will find that being only a consumer is nothing more than better than being a fat cow ready for market and so called connectivity and modern communications a mirage.

    I think it is called the past, but we are all not going to fit, and that is the problem. Too many people, too little resources, out of ideas and out of time.


  36. Your observation is bang on. Till recently I had not paid attention to the finances of the world. I kinda knew that living standards were lower overseas. i am Canadian. Started paying attention couple of years ago and wondered why standards had skyrocketed for UK and europeans . Which started the discovery of how economies can make something out of nothing and wind up with nothing economies.
    I thank God I’ll be dead when my country repeat your mistakes.


  37. 24,000 old people froze to death, Bankers manipulate libor thereby reducing the income from savings and energy market is also manipulated thereby increasing the cost of staying warm, If terrorists had caused the death of 24,000 people we would ready and army and bomb them into stone age. But since the perpetrators own our government this appalling news does not rate too much attention.


  38. Sorry if this sounds patronizing but here’s my ‘back of a matchbox’ glimpse of crash 2.

    1.The UK cannot cut the growing deficit without unacceptable social consequences.
    2.QE has to continue in order to cover the increase in borrowing. (We already need to borrow to pay the interest on the debt.)
    3.Sterling glides down and eventually reaches crisis point. Import costs soar, inflation gets out of control.
    4.Interest rates have to go up substantially or we’ll have hyperinflation.
    5.Mass repossessions see the housing market truly collapse.
    6.Unemployment goes parabolic.
    6.Social programmes are cut i.e. no more housing benefit, no more pensions, no JSA. The NHS is no longer free. If you can’t pay, you go without, there’s no more printed money, it’s worthless.

    Game over.

    Some will whinge yes, others will die of the cold, quietly, in their own homes


  39. u r not mad, far from it, you are saner than the majority and if that makes a nut then cally me nutty. At worst you have an insurance policy that hopefully you will never need to claim on but given the pure mathematics of the global debt equation, I’d say you are quids-in.
    I would disagree about the lateness you mention in #7. You are ahead of the herd and thats all that counts. As the old saying goes “There is no such thing as a gradual panic.”! Kudos


  40. So all the derivs nett out to zero do they? So do all the equities but that has not prevented drastically rapid price discovery in the downward direction otherwise known as stock market crashes. Unfortunately the health of most +90% of all derivs are intimately tied to the future viability of the global financial system by way of the holding banks.
    Anyone that thinks derivs are a proper zero-sum game is living in la-la land!



    Want some more mind-numbing news? The S&P 500 is NOW LESS THAN 100 points off its all time high and 85 points off its peak level during what everyone now agrees was a MASSIVE BUBBLE in equities in the year 2000.

    I must say that based on the current economic conditions, or even expected economic conditions some 6 months out, I find it hard to believe that the current level of the US equity market are rational. That they are sitting at these levels is a testimony to the ability of the US Federal Reserve, the ECB, the BOE and the BOJ to stuff massive and gargantuan amounts of liquidity into the system in order to stave off deflation. Oh yes, they have managed to stave off deflation pressures alright, at least for the time being. What they have done is to create another massive bubble in the equity markets once again. I cannot think of a better poster child to demonstrate the degree to which paper assets can be inflated by meddling Central Bankers than the US equity markets.

    With bullish sentiment once again at extreme levels, not many bears around, with an economy that continues to crawl along in an “L” shaped recovery, and with no end in sight to the massive US federal budget deficits and overall federal debt, I personally believe that the US equity markets are now a huge accident waiting to happen.

    Maybe I will be proven wrong for another few months as the economy/market run on these drugs in its system, but I will not be the least bit surprised to see a significant fall in stocks when it does occur. Methinks we are all going to have ringside seats to the greatest experiment in monetary history determining whether or not endless creation of nearly unlimited sums of paper currency can usher in an era of lasting prosperity and effectively do away with any fallout whatsoever from the accumulating of massive indebtedness.

    One last thing – by the end of the current administration’s term, the projected US federal deficit is expected to be in the vicinity of $20 TRILLION. Chew on that for a while and you will see why this market scares the hell out of me, especially with the vast majority of investors utterly complacent with hardly a care in the world.

    I hope that I, along with you my readers all live long enough to see how monetary historians are going to record this. I suspect they will marvel at the blind folly of so many. It is almost as if an entire generation of investors have lost their collective minds.

    REmember, as traders, we cannot fight the tape and expect to make money but that does not mean that we cannot marvel at the rank ignorance of our era.


  42. Pingback: THE SATURDAY ESSAY: Why we all need to take an interest in interest rates | The Slog. 3-D bollocks deconstruction

  43. Pingback: New Slog Post. THE SATURDAY ESSAY: Why we all need to take an interest in interest rates -

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s