INVESTORS: FIVE REASONS WHY MONEY MUST DIE

Off the keyboard of John Ward

Follow us on Twitter @doomstead666
Friend us on Facebook

Published on The Slog on January 13, 2014

money-death

Discuss this article at the Economics Table inside the Diner

econcartCROPThe distance from now to the inevitable is, by definition, finite

Tell me, have you ever read 2000-2013 The Corporate Issuance Global Frenzy: what role for US Quantitative Easing? by Marco LoDuca of the European Central Bank et al?

G’wan…bet you haven’t. I have, and now my brain hurts. Simplistic is bad, but simple is good. Impenetrable is worthy, but clarity and vision are worth more.

Four years ago, I asked two questions about the arrival of QE and Zirp into our linguistic lexicon. One, what will you do if QE doesn’t work? And two, why will Zirp help recovery, when the biggest single demographic group with the lowest overheads needs Zirp + 4% to keep spending?

They were both naive questions – I know that now. When the first two bouts of QE didn’t work, I took out Bear Notes, on the wild and crazy assumption that Ben and Merv must change tack. They didn’t, and I saw a third of my investment capital  wiped out. And of course, without Zirp most of Wall Street would’ve gone bankrupt, followed in fairly short order by the US Government and the United Kingdom. I did a quick sum and worked out that if rates were at 4% for 3 years, for example, by 2015 $2.30 in every $5 would be going on just managing US Sovereign interest.

Anyway, 2014 has dawned, and here we are with the same crazy people saying “one more heave” for both stimulation and austerity at the same time. Here we are with Greece, Spain and Italy on the edge of default – and debt bonds from these countries flying off the shelf. Here we are with Zirp having saved nobody really, and the tapering of QE about to start a little bit and if anything goes wrong well, it won’t hahahahaha. And above all, here we are talking about interest rates as if these Masters of the Universe could forbid them to rise, ever.

In that context, 2000-2013 The Corporate Issuance Global Frenzy: what role for US Quantitative Easing? by Marco LoDuca of the European Central Bank et al doesn’t exactly hum with relevance. There are many who will be glad about this, but my point is based on reality rather than long equations: there is no point in doing learned studies based on the logic of madness unless you are a CBT counsellor or psychiatrist.

This is where we are, actually, now, on Planet Earth:

1. The Americans, Brits, Eurozoners. Japanese and Chinese are all emitting drivel, spin and desperately clutched, atypical statistics to tell us the recovery is under way. It isn’t. QE has failed, and the response of the authorities is now that of managing crack addict withdrawal rather than getting a better policy.

2. Printing money to purchase poo simply gives the central banks a very big and wide poo-based balance sheet, while starting out on the fast lane to inflation.

3. Interest rates must and will rise, because market pressures on gold, commodities, bonds and a hundred other formerly good investment areas have gone, and the smart money knows that the Bourses have had their day in the sun: it’s about to start drizzling.

4. When they rise, money will have to be printed to manage debt owed by the debtor countries. This will result in the fast-lane inflation vehicle sprouting James Bond wings and zooming up into hyperinflation. Don’t even think about what that will do to the markets.

5. Neoliberal economics demands consumption 24/7/365. Sadly, they also demand a 30% reduction in mass consumer spending power. And guess what – inflation will merely exacerbate that. This is a circle that simply cannot be squared. It’s the flaw in the theory, the ghost in the machine, the Mammoth in the downstairs lavatory.

Those five factors demand a crash. They don’t point to it, or suggest it, or even persuasively propose it: they demand it. Flatlining consumption will meet tentatively tapered easing, skid into a bond balloon, and bounce over the central reservation where it will hit rising debt costs towing hyperinflation. In the raging inferno that follows, the stock market will be burned to a crisp.

I have no idea any more how long the boys in the the bubble can keep up the denial. Japan’s road looks pretty short to me, and Germany’s austerity shtick will hit the buffers once the directionalising debt money pulls out of ClubMed. The bank bailin surrealism will not get past the first French bank that tries it on, and that in turn will make France’s real situation obvious. Britain’s Chancellor George Osborne has a carpet-bag like a tardis: I’m constantly amazed by the consistently superficial credibility of the cons he pulls off. And in theory, until the tipping point, the States could keep pumping smoke into the Hall of Mirrors almost indefinitely.

But in time, “almost” will be passed, and then Janet Yellen will be heading like Speedy Gonzales for the downstairs loo. In there she’ll find a hairy mammoth saying “I was here first”.

Enjoy the week.

Knarf plays the Doomer Blues

https://image.freepik.com/free-icon/musical-notes-symbols_318-29778.jpg

Support the Diner
Search the Diner
Surveys & Podcasts

NEW SURVEY

Renewable Energy

VISIT AND FOLLOW US ON DINER SOUNDCLOUD

" As a daily reader of all of the doomsday blogs, e.g. the Diner, Nature Bats Last, Zerohedge, Scribbler, etc… I must say that I most look forward to your “off the microphone” rants. Your analysis, insights, and conclusions are always logical, well supported, and clearly articulated – a trifecta not frequently achieved."- Joe D
Archives
Global Diners

View Full Diner Stats

Global Population Stats

Enter a Country Name for full Population & Demographic Statistics

Lake Mead Watch

http://si.wsj.net/public/resources/images/NA-BX686_LakeMe_G_20130816175615.jpg

loading

Inside the Diner

Quote from: azozeo on Today at 05:17:09 PMQuote from: RE on Today at 05:04:57 PMIMHO, it will be a Cold Day in HELL when El Tru...

Hello everyone, in this segment , client find himself as an observer/ creator being watching the earth ascension at this time

Quote from: RE on Today at 05:04:57 PMIMHO, it will be a Cold Day in HELL when El Trumpo resigns, for any reason.  It's not in his personality type.  We're les...

IMHO, it will be a Cold Day in HELL when El Trumpo resigns, for any reason.  It's not in his personality type.  We're less than a year away from the new election anyhow.  He's going to get be...

Recent Facebook Posts

Evacuation orders lifted after Palisades Fire leaves 2 injured and burns at least 40 acres in Los Angeles

The Los Angeles Fire Department ordered mandatory evacuations Monday as a fire ripped across a hillside in the affluent Pacific Palisades area,..

4 weeks ago

US troops pelted with rotten fruit and stones as they leave Syria – video

People have thrown rotten fruit and stones at US troops as they left Syria in armed vehicles, with one man appearing to shout: ‘You liars!’..

4 weeks ago

Corporate America's Second War With the Rule of Law

Corporate America’s Second War With the Rule of Law- Uber, Facebook, and Google are increasingly behaving like the law-flouting financial empires..

4 weeks ago

Photos from Rafael Nadal's Spanish wedding show a reception fit for tennis royalty

From Business Insider:

4 weeks ago

The best toothpaste for kids

From Business Insider:

4 weeks ago

Diner Twitter feed

Knarf’s Knewz

The mosque of the East Jerusalem neighbourhood of [...]

Prosecutors in Sweden have dropped an investigatio [...]

Quote from: K-Dog on Today at 01:26:02 AMQuote fro [...]

Diner Newz Feeds
  • Surly
  • Agelbert
  • Knarf
  • Golden Oxen
  • Frostbite Falls

Who they Are...[img]https://scontent.forf1-2.fna.f [...]

Doomstead Diner Daily November 19The Diner Daily i [...]

[img]https://scontent.forf1-1.fna.fbcdn.net/v/t1.0 [...]

Quote from: UnhingedBecauseLucid on March 18, 2019 [...]

CleanTechnicaSupport CleanTechnica’s work via dona [...]

QuoteThe FACT that the current incredibly STUPID e [...]

The mosque of the East Jerusalem neighbourhood of [...]

Prosecutors in Sweden have dropped an investigatio [...]

Quote from: K-Dog on Today at 01:26:02 AMQuote fro [...]

Scientists have unlocked the power of gold atoms b [...]

Quote from: azozeo on August 14, 2019, 10:41:33 AM [...]

Wisconsin Bill Would Remove Barrier to Using Gold, [...]

Under extreme conditions, gold rearranges its atom [...]

The cost of gold futures on the Comex exchange inc [...]

Time for another Bloody Mary!   RE [...]

Kicking off with the death of the Marlboro Man.RE[ [...]

Alternate Perspectives
  • Two Ice Floes
  • Jumping Jack Flash
  • From Filmers to Farmers

Politicians’ Privilege By Cognitive Dissonance     Imagine for a moment you work for a small or medi [...]

Shaking the August Stick By Cognitive Dissonance     Sometime towards the end of the third or fourth [...]

Empire in Decline - Propaganda and the American Myth By Cognitive Dissonance     “Oh, what a tangled [...]

Meanderings By Cognitive Dissonance     Tis the Season Silly season is upon us. And I, for one, welc [...]

The Brainwashing of a Nation by Daniel Greenfield via Sultan Knish blog Image by ElisaRiva from Pixa [...]

Event Update For 2019-11-17http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2019-11-16http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2019-11-15http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2019-11-14http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

Event Update For 2019-11-13http://jumpingjackflashhypothesis.blogspot.com/2012/02/jumping-jack-flash-hypothesis-its-gas.html Th [...]

With fusion energy perpetually 20 years away we now also perpetually have [fill in the blank] years [...]

My mea culpa for having inadvertently neglected FF2F for so long, and an update on the upcoming post [...]

NYC plans to undertake the swindle of the civilisation by suing the companies that have enabled it t [...]

MbS, the personification of the age-old pre-revolutionary scenario in which an expiring regime attem [...]

Daily Doom Photo

man-watching-tv

Sustainability
  • Peak Surfer
  • SUN
  • Transition Voice

Waterboarding Flounder"Serious oxygen loss between 100 and 600-meter depths is expected to cover 59–80% of the ocean [...]

Of Warnings and their Ripple Effects"We need wooden ships, char-crete buildings, bamboo bicycles, moringa furniture, and hemp cloth [...]

"Restoring normal whale activity to the oceans would capture the CO2 equivalent of 2 billion tr [...]

Ukrainian Rhapsody"Our future will be more about artificial intelligence, cybersecurity, and non-state actors tha [...]

LeBron’s Chinese Troll Mobs"In the 36 hours after James’ delete, a troll mob with bot support sent a flame tsunami at the [...]

The folks at Windward have been doing great work at living sustainably for many years now.  Part of [...]

 The Daily SUN☼ Building a Better Tomorrow by Sustaining Universal Needs April 3, 2017 Powering Down [...]

Off the keyboard of Bob Montgomery Follow us on Twitter @doomstead666 Friend us on Facebook Publishe [...]

Visit SUN on Facebook Here [...]

What extinction crisis? Believe it or not, there are still climate science deniers out there. And th [...]

My new book, Abolish Oil Now, will talk about why the climate movement has failed and what we can do [...]

A new climate protest movement out of the UK has taken Europe by storm and made governments sit down [...]

The success of Apollo 11 flipped the American public from skeptics to fans. The climate movement nee [...]

Today's movement to abolish fossil fuels can learn from two different paths that the British an [...]

Top Commentariats
  • Our Finite World
  • Economic Undertow

Egypt runs seriously short of water just as their pop gets towards 150m Bob Geldof organizes another [...]

The point is that if we want to deal with energy issues, we have to deal with wealth. Don, that [...]

Entropy and steroids will get us all in the end. https://pics.me.me/then-ill-be-back-now-oh-my-back- [...]

Perhaps more clarity... Somebody recently produced a graph of energy consumption on the globe. But i [...]

Yep, it is not a problem, but a predicament---- The issues we are discussing here are not even in th [...]

For those safe from the rising seas, the ocean acidification will fcuk you up instead [...]

Here's an article: https://www.reuters.com/article/us-imo-shipping-factbox/factbox-imo-2020-a-m [...]

What is the shift away from bunker fuels? [...]

Yeah, when the water heater goes out the day after you just put new tires on one of the cars, etc... [...]

I join the chorus in welcoming you back. Any thoughts on how the shift away from bunker fuel on Janu [...]

RE Economics

Going Cashless

Off the keyboard of RE Follow us on Twitter @doomstead666...

Simplifying the Final Countdown

Off the keyboard of RE Follow us on Twitter @doomstead666...

Bond Market Collapse and the Banning of Cash

Off the microphone of RE Follow us on Twitter @doomstead666...

Do Central Bankers Recognize there is NO GROWTH?

Discuss this article @ the ECONOMICS TABLE inside the...

Singularity of the Dollar

Off the Keyboard of RE Follow us on Twitter @doomstead666...

Kurrency Kollapse: To Print or Not To Print?

Off the microphone of RE Follow us on Twitter @doomstead666...

SWISSIE CAPITULATION!

Off the microphone of RE Follow us on Twitter @doomstead666...

Of Heat Sinks & Debt Sinks: A Thermodynamic View of Money

Off the keyboard of RE Follow us on Twitter @doomstead666...

Merry Doomy Christmas

Off the keyboard of RE Follow us on Twitter @doomstead666...

Peak Customers: The Final Liquidation Sale

Off the keyboard of RE Follow us on Twitter @doomstead666...

Collapse Fiction
Useful Links
Technical Journals

The effect of urbanization on microclimatic conditions is known as “urban heat islands”. [...]

Forecasting extreme precipitations is one of the main priorities of hydrology in Latin America and t [...]

The objective of this work is the development of an automated and objective identification scheme of [...]

Follow on our http://www.doomsteaddiner.net/forum/