Re: Britain does it better

I did read it - and I was impressed that you are doing your homework. If
only your emotions were as stable as your intellect.

But ultimately I don't much care how many CDOs were created (even if it's
$5 trillion total) and I don't even care about the - perhaps? - notional
$60 trillion of derivatives out there either.  They're crap and they're
going to evaporate like the last snows of winter under a hot spring sun.
Everyone knew this - even the bankers and traders - they just hoped to
find a seat before the music stopped.

Ok...so you acknowledge that they will evaporate.

So, you're almost there, stay with me now. Debt is money.

Debt growth is how monetary growth occurs. As debts default, money
vaporizes. That is deflationary. The system is SET UP to eventually
collapse this way. When ordinary economic activity DID NOT provide
for sufficient monetary growth, the banks were "forced" into a
paradigm where they essentially INVENTED a fictitious meta-economy
with "synthetic" bonds based upon "synthetic" pseudo-defaults. This
was the ONLY way to grow credit past peak oil. It was it.

Peak meant peak petrodollars, which were recycled into our dollar
zone. That is how money kept growing. Now, it's stopped. The
debtmoney system REQUIRES credit/debt growth for its existence. It
has NO OTHER method or manner of operation.

I hope that you can see that a system such as this is by its very
definition, eventually self-destructive. Money is not money...it is
LENT into existence. That creates a compounding parasitic drag on
real production. This is precisely HOW and WHY the economy here
morphed into this FIRE monster...the economy was made to serve the
money, not the other way around. Do you get it now?

That is how these systems collapse. This has happened before, in the
last century. It is inevitable.

Yes, institutions will be swept away in that collapse.  And that will be
disruptive and painful.  But ultimately the collapse of the financial
sector in the US from it current 30% of GDP back to something like 10-15%
will be a good thing.

The GDP that the FIRE sector created was ersatz. It is a drag on the
economy. The economy SHOULD NOT serve money.

Nothing *real* is being lost, Trav.  Castles in air are collapsing -
that's all.

Real companies are failing, gerald, real people are losing their
jobs. The fuckin central banks gave us this monetary system that
REQUIRES debt in order for money to exist...that is what is flawed.
That led to all of this. The music ran so long as economic expansion
did. Once the oil peaked, the same *** happened to the USSR. Any
monetary zone that experiences peak has the music stop.

Sure, that creates a HUGE management problem to get new institutions in
place to carry the load (and they will be new even if some of them have
old familiar names) as the old houses of cards are blown away in the
strong winds.  It's a major problem in "transition management" -
transition from failed banks and investment houses to new ones, from a
collapsed US superpower to a multipolar world, from discredited fiat
currencies to new "fresh" currencies (but still fiat - LOL!).

The US is NOT A FIAT CURRENCY. It's NOT. There is no FIAT about it.

The FRN can ONLY be LENT into existence. It CANNOT be created by
fiat. The executive nor the Congress COMPLETELY lack the power to
create ONE single FRN. They MUST borrow them to have them. That is
IT.

Only by taking on a DEBT obligation can a single fkin FRN come into
existence. This mathematical compounding is now eating 1/6 of the
budget, soon to be 1/3.

It can and will be done.  

Ever the optimist. It has been done. What it requires is that money
serve the economy, not vice versa.

In a sense a new form of rationality is appearing.  In a fiat currency
system (as the whole world is right now) it makes complete sense that the
only "real" banks are the governments themselves.  Just one layer of
intermediation has disappeared - the banking system :-)  And that only
temporarily until a new banking system can be rolled out.

I'm all for that. Let the governments have the currency powers. YES,
go to an ACTUAL fiat system instead of giving banks control over
currency and monetary growth.

That the system is collapsing globally means there's nowhere to go,
nowhere to hide.  Oh sure, a few can scramble for gold (like you and me)
but that can only save 1% of folks - in the big picture gold is useless
(the entire amount of gold on the planet would fit in a cube 19m on each
side).

Yeah, but what else is there? In a situation where world GDP must
contract going forward due to energy supply maximum, wtf do we have
for trade balance settlement?

So the only place to go from the collapsing "old system" is the "new
system."  Which (except for a few names) will be much the same as the old
system.  

No. It will destroy itself too. We must not have another debtmoney
system.

Yes, some houses are overbuilt.  Yes, some houses are too far from work
centres.  But that housing, even though imperfect, is NOT wasted
production - people can live in them.  Compared to the paper frauds
they're magnificent in their reality.

Houses are dead end capital...built in suburbia, far from anything,
hard to heat, hard to service. Suburbia as an enterprise is dead and
should never have been advanced.

China's economy is grounded in making "real things" (TM reg).  It has a
manufacturing basis (unlike the US which has pissed its away).  It
doesn't matter that the Chinese make cheap low-quality *** - it has a
market that will clear.  It has a market which will not drop to zero.  It
will be pinched, not crushed.

China's economy is grounded in making TOO many things for TOO few
people! They eke out an existence on RAZOR thin profit margins. They
cannot survive a downturn.

Your statement that it "will not drop to zero," is ludicrous...what
the *** does positivity have to do with ANYTHING?? China MUST GROW.
If it does not GROW, then it, as ANY overleveraged entity would, will
DIE.

You do not GET THE PROBLEM, dude. The USE of money to GROW GDP means
that you either make the mark or the debt crushes you. China is
facing massive default at many levels due to their absurd
misallocation of capital and overgrowth.

Most of their businesses are BARELY profitable in the greatest boom in
history! How the hell will they survive a downturn...they can't make
profit!

Not mine by any means, and not even especially that of other Canadians.  
Canada with its commodities, its positive gov't balance ***, its
heavily regulated (and therefore not insanely leveraged) banks is well
placed to weather the storm.  Oh yes, with some wear and tear - that's a
given - but nothing like the collapse the US is headed for.

LOL...fool. We will suck you in, man...we're gonna.

And the world isn't ending now either!

It may in 10 years or so. The dramatic fall in oil consumption means
that the slack capacity created by demand destruction implies that
there is something worth fighting over for the purposes of "growing
one's way out of the depression."

It was a grossly inept metaphor - which is why I mocked it.

You are grossly inept, which is why I mock you.

Ah, a market timer and a trader with additional external constraints on
his timing.  And you sneer at the bankers who gambled?

No, they didn't gamble...what they did was fraud.

When you are even half as rich as I am you can begin to be taken
seriously. Until then you're just another gambler who has lucked out.

You are a fucking old man who was LUCKY just like everyone who grew up
under the umbrella of the US Empire during BW2. You think you're
smart, but you were just born at the right time. There are so many
baby boomers with half your IQ and twice your pathetic wealth. People
who made fortunes like Mark Cuban in .com stocks of all places.

They were lucky, just like you are. Enriching oneself in a bull
market requires no specialness, lucky for you. Now, when the tide
isn't floating all boats, you are worried and talking about preserving
capital. LOL. Just shut up and let the pros handle these tough
markets, kid.

Gold, like all other commodities, fluctuates. However, it is valuable for
its negative corelation with other markets, especially in heavy weather.  
Studies show, however, that gold needs holding periods of 30-50 years [!]
to be reasonably assured that its long term benefits can be reasonably
assured of occurring.

Plus it's shiny and you can swap it for ***.

Yes, and you've misread it.  Not surprising really that a greenhorn like
you should overreact in his first serious market test.  Nerves getting
the better of you.  Makes me worry how you'd do in a gunfight, though.

LOL...what? I, unlike you, am trading this market and succeeding.
ANY IDIOT can make a fortune in a bull market, dude. What takes skill
is succeeding when the bear is growling. Everyone is panicking...I'm
not. I am in positions and seeing them explode.

It's just a banking panic and market collapse - be prepared for a half-
dozen or so (some severe, others less so) over your investing life.

Regards,

I stand ready to make bank. I just hope that the USG doesn't seize
everything in order to keep itself afloat.

You really haven't thought through this whole "end of empire" ***
that you cheerlead for.

Trav
.