Bernanke Inserts Gun In Mouth - DFWstangs Forums
 
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post #1 of 6 (permalink) Old 03-27-2009, 11:08 PM Thread Starter
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Bernanke Inserts Gun In Mouth

I'm not too market saavy. i'm curious what the dfwstangs financial types think of this: http://market-ticker.denninger.net/c...eserve/P2.html


here's an excerpt:

Quote:
See, if he fails, it won't be simply a United States phenomena. Quite to the contrary. That failure will in fact be global - Bernanke has guaranteed it by tying The Fed to every other major central bank in the world via his "unlimited swap lines." We may be a cheap $5 hooker in the bar, but of the hookers, we've got crabs and everyone else has AIDS!

The error in the hyperinflationist scenario is that without being able to couple price increases back into wages they are unsustainable - price increases instead collapse demand. If gasoline goes to $20/gallon you will buy less of it - a lot less - not because you want to, but because you simply don't have the money. This in turn destroys the gasoline retailer and oil company's operating cash flow, which in turn causes them to lay off more people. In a debt-laden economy the debt percentage (of GDP) continues to rise even as spending drops and a mad dash to try to redeem what debt can be repaid soaks up all available money.

The nightmare scenario that is staring us in the face, right here, right now isn't hyperinflation. It is in fact a collapse of monetary systems driving demand for dollars through the roof in a crescendo of attempted redemptions into collapsed ("no bid") asset prices - a demand that Ben will not be able to meet, as the collateral backing those dollars will have all been exchanged for toilet paper. Whether Bernanke holds all this trash on his balance sheet or manages to scam Treasury into exchanging it for T-bills, the result is the same - there is no collateral behind Bucky and as employment collapses no production to replace it with either.

The mad scramble will be on, and as it happens trade will be choked off by not a collapsing dollar but other currencies collapsing around the world.

Paradoxically, the DX, or dollar index, will skyrocket - not go through the floor - as this plays out.

Unfortunately this shuts down virtually all exports - at a time when we desperately need them, as we cannot borrow to consume any more. he economy collapses, along with government funding and our currency - but not through hyperinflation. The mad dash to redeem and sell anything and everything instead collapses pricing (that is, it becomes out-of-control deflation in an exponentially-increasing fashion) irrespective of Ben's attempt to halt it.

The "death spiral" ends in the destruction of our monetary base - not due to hyperinflation but due to the inability to borrow any more funds, the reduction of the currency's base to a giant circle jerk, asset fire sales in a mad liquidation dash and ultimately, the collapse of both the monetary and political systems in the United States as tax revenues collapse to very close to zero.

This is a national security emergency that quite literally can take down our government and way of life within months or even days, and I'm willing to bet that not one person in Congress understands the seriousness of the matter.

By refusing to confront the bankrupt nature of institutions under Bernanke's supervision and by choosing instead to continue to bail them out and take their trash onto his (our) balance sheet, Bernanke is risking something much worse than a Depression.

He is literally risking the end of America as a political and economic power.

Watch for a bond market dislocation very carefully.

I will be, and hopefully I will detect it in time to warn people if Ben's "last bullet" gambit ends up blowing up in his face.

In the meantime, for however long this rally in the market lasts (and it might be a while if the sheeple misdiagnose what's coming - if the newsletters I've seen thus far this evening are any clue, most people have) use it to raise cash and be prepared for some really tough times.

I have been singing this song - raise cash now - for quite some time. Let me be succinct - it has been my considered belief that you need enough in liquid cash - not credit access in the form of credit card available balances or anything similar - for at least six to twelve months. I'm upping that here and now to twelve to twenty-four months - that's right - one to two full years of "minimum necessary to make it" expenses. Figure out right here and now what your minimum "monthly nut" is, and raise 12-24 months of that much in safe, liquid funds.

That's a minimum; if you can in fact have enough available to be able to execute a "bug out" plan where you are able to become effectively self-sufficient on short notice (a couple of months maximum) if necessary, that's even better. Yes, we're talking chickens, goats, enough arable land to grow what you need to survive (bartering for what you don't have with what you do) and the means to defend it. If you live in a big city consider carefully what you intend to do if unemployment goes north of 20% and the city effectively goes feral - if you're interested in "how bad can it get" go drive through major parts of Detroit - bring an armored vehicle for your tour and/or at least semi-automatic weapons.

There's an ill-wind blowing and while this storm has not yet reached the shore, I'm putting up the plywood.


.

Audentes Fortuna Juvat
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post #2 of 6 (permalink) Old 03-28-2009, 06:34 AM
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Just another sign of the level of incompetency we have running this country.

CHL holder and Conservative...AKA "Domestic Terrorist"
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post #3 of 6 (permalink) Old 03-28-2009, 02:23 PM
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I'd rather have crabs than AIDS, tho!


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Originally Posted by DON SVO View Post
Women: vaginal life support.
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post #4 of 6 (permalink) Old 03-28-2009, 05:49 PM
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Originally Posted by That_Is_My_El_Camino View Post
I'd rather have crabs than AIDS, tho!

I've had crabs - they're not too bad
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post #5 of 6 (permalink) Old 03-28-2009, 08:42 PM
Lifer
 
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Originally Posted by stinginstang View Post
I've had crabs - they're not too bad
The problem with crabs, though, is you kill one and 10,000 come to it's funeral!

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post #6 of 6 (permalink) Old 03-28-2009, 09:20 PM
Lifer
 
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if only he'd pull the trigger now.

RON PAUL '08
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