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11 Responses to “About the New roubini.com Website”

MM CADecember 14th, 2009 at 5:35 pm

Shadowstats’ John Williams: Prepare For The Hyperinflationary Great DepressionSubmitted by Tyler Durden on 12/14/2009 14:32 -0500John Williams, who runs the popular counter government data manipulation site Shadowstats, has thrown down the gauntlet to deflationists, and in an extensive report concludes that the probability of a hyperinflationary episode in America over the next year has reached critical levels. While the debate between deflationists and (hyper)inflationists has been a long and painful one, numerous events set off in motion by the Bernanke Fed (as a direct legacy of the Greenspan multi-decade period of cheap and boundless credit) may have well cast America as the unwilling protagonist in the sequel of the failed monetary policy economic experiment better known as Zimbabwe.Williams does not mince his words:The U.S. economic and systemic solvency crises of the last two years are just precursors to a Great Collapse: a hyperinflationary great depression. Such will reflect a complete collapse in the purchasing power of the U.S. dollar, a collapse in the normal stream of U.S. commercial and economic activity, a collapse in the U.S. financial system as we know it, and a likely realignment of the U.S. political environment. The current U.S. financial markets, financial system and economy remain highly unstable and vulnerable to unexpected shocks. The Federal Reserve is dedicated to preventing deflation, to debasing the U.S. dollar. The results of those efforts are being seen in tentative selling pressures against the U.S. currency and in the rallying price of gold.And even as Bernanke continues existing in a factless vacuum where he sees no asset bubbles, Williams takes aim at the one party almost exclusively responsible for the economic carnage that will soon transpire:The crises have been generated out of and are centered on the United States financial system, triggered by the collapse of debt excesses actively encouraged by the Greenspan Federal Reserve. Recognizing that the U.S. economy was sagging under the weight of structural changes created by government trade, regulatory and social policies — policies that limited real consumer income growth — Mr. Greenspan played along with the political and banking systems. He made policy decisions to steal economic activity from the future, fueling economic growth of the last decade largely through debt expansion.The Greenspan Fed pushed for ever-greater systemic leverage, including the happy acceptance of new financial products, which included instruments of mis-packaged lending risks, designed for consumption by global entities that openly did not understand the nature of the risks being taken. Complicit in this broad malfeasance was the U.S. government, including both major political parties in successive Administrations and Congresses.As with consumers, the federal government could not make ends meet while appeasing that portion of the electorate that could be kept docile by ever-expanding government programs and increasing government spending. The solution was ever-expanding federal debt and deficits.Purportedly, it was Arthur Burns, Fed Chairman under Richard Nixon, who first offered the advice that helped to guide Alan Greenspan and a number of Administrations. The gist of the wisdom imparted was that if you ran into problems, you could ignore the budget deficit and the dollar. Ignoring them did not matter, because doing so would not cost you any votes.Back in 2005, I raised the issue of a then-inevitable U.S. hyperinflation with an advisor to both the Bush Administration and Fed Chairman Greenspan. I was told simply that “It’s too far into the future to worry about.”Indeed, pushing the big problems into the future appears to have been the working strategy for both the Fed and recent Administrations. Yet, the U.S. dollar and the budget deficit do matter, and the future is at hand. The day of ultimate financial reckoning has arrived, and it is playing out.Looking at the events over the past year demonstrates that Williams is not just being a drama queen.Effective financial impairments and at least partial nationalizations or orchestrated bailouts/takeovers resulted for institutions such as Bear Stearns, Citigroup, Washington Mutual, AIG, General Motors, Chrysler, Fannie Mae and Freddie Mac, along with a number of further troubled financial institutions. The Fed moved to provide whatever systemic liquidity would be needed, while the federal government moved to finance corporate bailouts and to introduce significant stimulus spending.Curiously, though, the Fed and the Treasury let Lehman Brothers fail outright, which triggered a foreseeable run on the system and markedly intensified the systemic solvency crisis in September 2008. Whether someone was trying to play political games, with the public and Congress increasingly raising questions of moral hazard issues, or whether the U.S. financial wizards missed what would happen or simply moved to bring the crisis to a head, remains to be seen.More on the impending timing of the complete economic collapse of the US financial system:Before the systemic solvency crisis began to unfold in 2007, the U.S. government already had condemned the U.S. dollar to a hyperinflationary grave by taking on debt and obligations that never could be covered through raising taxes and/or by severely slashing government spending that had become politically untouchable. The U.S. economy also already had entered a severe structural downturn, which helped to trigger the systemic solvency crisis.The intensifying economic and solvency crises, and the responses to both by the U.S. government and the Federal Reserve in the last two years, have exacerbated the government’s solvency issues and moved forward my timing estimation for the hyperinflation to the next five years, from the 2010 to 2018 timing range estimated in the prior report. The U.S. government and Federal Reserve already have committed the system to this course through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests, gross mismanagement, and a deliberate and ongoing effort to debase the U.S. currency. Accordingly, risks are particularly high of the hyperinflation crisis breaking within the next year.What are the alternatives for the US? In a word, none. Presumably this means you should ignore what the axed “experts” from various bailed out sell side research chop shops try to tell you.The U.S. has no way of avoiding a financial Armageddon. Bankrupt sovereign states most commonly use the currency printing press as a solution to not having enough money to cover obligations. The alternative would be for the U.S. to renege on its existing debt and obligations, a solution for modern sovereign states rarely seen outside of governments overthrown in revolution, and a solution with no happier ending than simply printing the needed money. With the creation of massive amounts of new fiat dollars (not backed by gold or silver) will come the eventual destruction of the value of the U.S. dollar and related dollar-denominated paper assets.What lies ahead will be extremely difficult, painful and unhappy times for many in the United States. The functioning and adaptation of the U.S. economy and financial markets to a hyperinflation likely would be particularly disruptive. Trouble could range from turmoil in the food distribution chain to electronic cash and credit systems unable to handle rapidly changing circumstances. The situation quickly would devolve from a deepening depression, to an intensifying hyperinflationary great depression.While the economic difficulties would have global impact, the initial hyperinflation should be largely a U.S. problem, albeit with major implications for the global currency system. For those living in the United States, long-range strategies should look to assure safety and survival, which from a financial standpoint means preserving wealth and assets. Also directly impacted, of course, are those holding or dependent upon U.S. dollars or dollar-denominated assets, and those living in “dollarized” countries.In other words, the economic cycle will come back with a vengeance. Having pulled America out of the abyss by the last hairs on its Rogaine infused head, the Fed and the Administration have merely purchased one-two years of excess time in which insiders can sell all their holdings (look at recent reports indicating the ratio of insider sellers to buyers) and banks can book one/two years of record bonuses before signing off.And whether one is a deflationist or inflationist, the take home message from Williams’ thesis that everyone should be able to agree on, is what everyone knows yet is unwilling to admit: that the US economy (and its derivative, the undecoupled global economy, which that most certainly includes China) is that we are now caught in the greatest Ponzi bubble of all time. One small hiccup in which there is no incremental hollow value added on the margin courtesy of printing presses pushing fiat pieces of paper in overtime, would lead to precisely the same outcome as the world saw with Bernie Madoff: from $50 billion to 0 overnight. It is somehow fitting that world GDP is 1,000 time greater, at $50 trillion. Take away the fiat illusion, and the real value collapses to those concepts of tangible value that will remain in a post bubble implosion scenario: whether these be spam, gold, or lead.And just so there is no confusion about the course of events, Williams presents the Zimbabwe hyperinflation episode as the case study that the historian Bernanke should have been focusing on, instead of spending long nights, “learning” from the Great Depression.Hyperinflation in Zimbabwe, the former Rhodesia, was a quadrillion times worse than it was in Weimar Germany. Zimbabwe went through a number of years of high inflation, with an accelerating hyperinflation from 2006 to 2009, when the currency was abandoned. Through three devaluations, excess zeros repeatedly were lopped off notes as high as 100 trillion Zimbabwe dollars.The cumulative devaluation of the Zimbabwe dollar was such that a stack of 100,000,000,000,000,000,000,000,000 (26 zeros) two dollar bills (if they were printed) in the peak hyperinflation would have be needed to equal in value what a single original Zimbabwe two-dollar bill of 1978 had been worth. Such a pile of bills literally would be light years high, stretching from the Earth to the Andromeda GalaxyIn early-2009, the governor of the Zimbabwe Reserve Bank indicated he felt his actions in printing money were vindicated by the recent actions of the U.S. Federal Reserve. If the U.S. went through a hyperinflation like that of Zimbabwe’s, total U.S. federal debt and obligations (roughly $75 trillion with unfunded liabilities) could be paid off for much less than a current penny.What helped to enable the evolution of the Zimbabwe monetary excesses over the years, while still having something of a functioning economy, was the back-up of a well functioning black market in U.S. dollars. The United States has no such backup system, however, with implications for a more rapid and disruptive hyperinflation than seen in Zimbabwe, when it hits.Maybe in retrospect it is good that banks are not lending out. If the $1.2 trillion in excess reserves were to actually hit circulating currency overnight, or even in a much more gradual fashion, then hyperinflation would surely be unavoidable, not so much as function of the consumer becoming a dominant force once again, which is the deflationists’ key point, but as a result of the excess liquidity of the capital markets, which is the only reason why the S&P is where it is, into Main Street. As it stands, banks’ unwillingness to recreate the cheap credit bubble by lending to anyone who has a pulse and can walk is the only thing that is so far preventing America’s name change to the United States of Zimbabwe.

crgordonDecember 14th, 2009 at 6:51 pm

Chilling to say the least.I live in a politically stable, dollarized country outside the US and am perplexed on how to prepare for this hopefully worst case scenario. I have no debt, own two hectares with my own coffee plants, citrus, banana, plantain, well, and have planted a garden large enough to assist feeding my neighbors if that time ever came. I can not change, however, the fact that I am a blue-eyed gringo who Brazil’s President Lula has blamed as having been the cause of the economic hardhships.And as much as I respect the good Doctor R, gold has an allure of having something of value even if a currency collapses. The rational part of me has prepared as best I can think with my property, etc. Regardless of rational/irrational, having gold does provide some comfort.

The AlarmistDecember 15th, 2009 at 2:56 am

You know, it is kind of like watching an auto accident unfold in slow motion.Gold is a portable, somewhat universally accepted store of value. Good to have some in case you have to leave town in a hurry. I suspect the good Dr. R has not given that as much weight in his analysis as he perhaps should.

i think i see how this new thing, same thing, is intended to function. the text is too small though and i think it may cause me to go blind. maybe i should use all caps? or is there some other way? the tale of the incredibly shrinking text .... i'mDecember 15th, 2009 at 6:52 pm

Shared Timeslot Monday 5PM to 6PM Monday December 14, 2009 5:00pmExpert Witness, m. levine / howard bloom , “genius in the beast”…http://archive.wbai.org/………………..http://howardbloom.net/bloombio.htm..”..Some executives were master strategists but used their intelligence to increase their own stature, often at a brutal cost to others. Others were far more ethical. Yet even the best-intentioned employed boardroom and backroom tactics handed down from the politics of chimpanzees. Without knowing it, they used tricks of leadership we share with social animals from lizards and lobsters to baboons and mountain apes.”The subculture of Washington politics was, to Bloom, the most disturbing of them all. Bloom founded Music in Action, a national anti-censorship organization. This brought him into head-on combat with Tipper Gore, wife of Vice President and eventual presidential candidate Al Gore. Says Bloom, “Tipper and the right wing religionists who used her for their ends were masters of perceptual manipulation. They perpetrated hoaxes of outrageous transparency, yet still managed to convince the press and public that their falsifications were true.””….http://www.garynull.org/wp-content/uploads/2009/12/GaryNullShow121409.mp3.Pub Date: Dec 10, 2009Dec.10 THE HUMAN CONDITION BLINDED BY SCIENCEListen:http://thatradio.podhoster.com/index.php?sid=1617.

GuestDecember 15th, 2009 at 9:27 pm

Also, if you keep Roubini in a separate tab (use ctl t), the enlarged text will not “overflow” onto other Web pages.

i think i see how this new thing, same thing, is intended to function. the text is too small though and i think it may cause me to go blind. maybe i should use all caps? or is there some other way? the tale of the incredibly shrinking text .... i'mDecember 15th, 2009 at 6:52 pm

Shared Timeslot Monday 5PM to 6PM Monday December 14, 2009 5:00pmExpert Witness, m. levine / howard bloom , “genius in the beast”…http://archive.wbai.org/………………..http://howardbloom.net/bloombio.htm..”..Some executives were master strategists but used their intelligence to increase their own stature, often at a brutal cost to others. Others were far more ethical. Yet even the best-intentioned employed boardroom and backroom tactics handed down from the politics of chimpanzees. Without knowing it, they used tricks of leadership we share with social animals from lizards and lobsters to baboons and mountain apes.”The subculture of Washington politics was, to Bloom, the most disturbing of them all. Bloom founded Music in Action, a national anti-censorship organization. This brought him into head-on combat with Tipper Gore, wife of Vice President and eventual presidential candidate Al Gore. Says Bloom, “Tipper and the right wing religionists who used her for their ends were masters of perceptual manipulation. They perpetrated hoaxes of outrageous transparency, yet still managed to convince the press and public that their falsifications were true.””….http://www.garynull.org/wp-content/uploads/2009/12/GaryNullShow121409.mp3.Pub Date: Dec 10, 2009Dec.10 THE HUMAN CONDITION BLINDED BY SCIENCEListen:http://thatradio.podhoster.com/index.php?sid=1617.

i think i see how this new thing, same thing, is intended to function. the text is too small though and i think it may cause me to go blind. maybe i should use all caps? or is there some other way? the tale of the incredibly shrinking text .... i'mDecember 15th, 2009 at 6:52 pm

Shared Timeslot Monday 5PM to 6PM Monday December 14, 2009 5:00pmExpert Witness, m. levine / howard bloom , “genius in the beast”…http://archive.wbai.org/………………..http://howardbloom.net/bloombio.htm..”..Some executives were master strategists but used their intelligence to increase their own stature, often at a brutal cost to others. Others were far more ethical. Yet even the best-intentioned employed boardroom and backroom tactics handed down from the politics of chimpanzees. Without knowing it, they used tricks of leadership we share with social animals from lizards and lobsters to baboons and mountain apes.”The subculture of Washington politics was, to Bloom, the most disturbing of them all. Bloom founded Music in Action, a national anti-censorship organization. This brought him into head-on combat with Tipper Gore, wife of Vice President and eventual presidential candidate Al Gore. Says Bloom, “Tipper and the right wing religionists who used her for their ends were masters of perceptual manipulation. They perpetrated hoaxes of outrageous transparency, yet still managed to convince the press and public that their falsifications were true.””….http://www.garynull.org/wp-content/uploads/2009/12/GaryNullShow121409.mp3.Pub Date: Dec 10, 2009Dec.10 THE HUMAN CONDITION BLINDED BY SCIENCEListen:http://thatradio.podhoster.com/index.php?sid=1617.

i think i see how this new thing, same thing, is intended to function. the text is too small though and i think it may cause me to go blind. maybe i should use all caps? or is there some other way? the tale of the incredibly shrinking text .... i'mDecember 15th, 2009 at 6:52 pm

Shared Timeslot Monday 5PM to 6PM Monday December 14, 2009 5:00pmExpert Witness, m. levine / howard bloom , “genius in the beast”…http://archive.wbai.org/………………..http://howardbloom.net/bloombio.htm..”..Some executives were master strategists but used their intelligence to increase their own stature, often at a brutal cost to others. Others were far more ethical. Yet even the best-intentioned employed boardroom and backroom tactics handed down from the politics of chimpanzees. Without knowing it, they used tricks of leadership we share with social animals from lizards and lobsters to baboons and mountain apes.”The subculture of Washington politics was, to Bloom, the most disturbing of them all. Bloom founded Music in Action, a national anti-censorship organization. This brought him into head-on combat with Tipper Gore, wife of Vice President and eventual presidential candidate Al Gore. Says Bloom, “Tipper and the right wing religionists who used her for their ends were masters of perceptual manipulation. They perpetrated hoaxes of outrageous transparency, yet still managed to convince the press and public that their falsifications were true.””….http://www.garynull.org/wp-content/uploads/2009/12/GaryNullShow121409.mp3.Pub Date: Dec 10, 2009Dec.10 THE HUMAN CONDITION BLINDED BY SCIENCEListen:http://thatradio.podhoster.com/index.php?sid=1617.

i think i see how this new thing, same thing, is intended to function. the text is too small though and i think it may cause me to go blind. maybe i should use all caps? or is there some other way? the tale of the incredibly shrinking text .... i'mDecember 15th, 2009 at 6:52 pm

Shared Timeslot Monday 5PM to 6PM Monday December 14, 2009 5:00pmExpert Witness, m. levine / howard bloom , “genius in the beast”…http://archive.wbai.org/………………..http://howardbloom.net/bloombio.htm..”..Some executives were master strategists but used their intelligence to increase their own stature, often at a brutal cost to others. Others were far more ethical. Yet even the best-intentioned employed boardroom and backroom tactics handed down from the politics of chimpanzees. Without knowing it, they used tricks of leadership we share with social animals from lizards and lobsters to baboons and mountain apes.”The subculture of Washington politics was, to Bloom, the most disturbing of them all. Bloom founded Music in Action, a national anti-censorship organization. This brought him into head-on combat with Tipper Gore, wife of Vice President and eventual presidential candidate Al Gore. Says Bloom, “Tipper and the right wing religionists who used her for their ends were masters of perceptual manipulation. They perpetrated hoaxes of outrageous transparency, yet still managed to convince the press and public that their falsifications were true.””….http://www.garynull.org/wp-content/uploads/2009/12/GaryNullShow121409.mp3.Pub Date: Dec 10, 2009Dec.10 THE HUMAN CONDITION BLINDED BY SCIENCEListen:http://thatradio.podhoster.com/index.php?sid=1617.

MM CADecember 16th, 2009 at 9:43 am

NO JOBS! WTF are they doing to help these people…Detroit’s Unemployment Nears 50%Vince Veneziani|Dec. 16, 2009, 10:36 AM | 64 |PrintTags: Unemployment, Jobs, RecessionThe unemployment situation in Detroit has truly become dire as the “real” unemployment number climbs to 45 percent.Detroit News: Despite an official unemployment rate of 27 percent, the real jobs problem in Detroit may be affecting half of the working-age population, thousands of whom either can’t find a job or are working fewer hours than they want.Using a broader definition of unemployment, as much as 45 percent of the labor force has been affected by the downturn.And that doesn’t include those who gave up the job search more than a year ago, a number that could exceed 100,000 potential workers alone.