will ANYone petition the supreme court already!

Good post.

Only point i would add.

Water, land and the earths resources are finite. The consumer religion will fail because it does not factor in all its external costs.

All the various religions need a sustainability audit and we junk the ones that have obvious flaws and try again.

Its sure getting hot in here.

What is kool about gold is that it has no debt attached to it unlike paper currency and its promise to pay (IOU) or why else do central banks stock pile gold, why even have it?

//I beg to differ on bankers. Necessary evil or not, it is the environment they exist under that is the problem.You will not get the investment money or funding for your social advancements without them handling the accountings and taking the risks.Unfettered, bankers over leverage investments and handout credit like cookies by doing over the counter deals which have no controls but between the parties involved. Where have the checks and balances been? Ask Congress about enforcement, fines, repayment and lack accounting laws. It’s the system that is not trustworthy, not the bankers.//

If you have read enough history you will realize that when civilizations collapse, the control mechanisms you describe fail. No civilization has been able to stop the collapse process once it goes beyond a certain point. All the clever shysters (banksters, sophists) end up in the same boat as the plebs.

//A simple example of mind control is: You have to pay taxes and the method of payment is the currency that is issued. From that, it instills value in paper. Add some laws and punishment and you have no other choice except jail time or comply.//

You will not get the investment money or funding for your social advancements without them handling the accountings and taking the risks.

Unfettered, bankers over leverage investments and handout credit like cookies by doing over the counter deals which have no controls but between the parties involved. Where have the checks and balances been? Ask Congress about enforcement, fines, repayment and lack accounting laws. It’s the system that is not trustworthy, not the bankers.

I would hope you rethink compounding interest. Of and in itself it is a direct drain on anything attached to it except the bankers. (servitude)

Without currency you have barter which is a survival mode without growth. Currency allows growth, backed by gold (whatever anchor is chosen) prevents runaway growth outside the means.

A simple example of mind control is: You have to pay taxes and the method of payment is the currency that is issued. From that, it instills value in paper. Add some laws and punishment and you have no other choice except jail time or comply.

Just as asset classes such as real estate and equities can take on ever greater astonishingly HIGH valuations during a mania, they can also find no bottom during a panic.

All of us realize this on some visceral level (except for those of us still without guile). And this explains why we crossed a tipping point late this summer when those who believed markets had “bottomed” were outnumbered by those with the vertiginous feeling that happens when you stare into the abyss.

Lucifer: your posts speak to this phenomenon. The sudden feeling that money has no real value (or stocks, bonds, real estate etc) is an existential moment that can grip people and spread like a virus.

The Existentialists, Dadaists, Kafka to name a few attest to this phenomenon through the ages.

The trivial pursuits of daily life seem meaningless when we realize we are all hanging onto a rock in the middle of the limitless, cold void of space. A rock with a core of lava.

Things are tenuous indeed.

ndk- most of my comments were aimed at people who talk about money as if it is real, like gravity or light.

for anonymous- China has no option, but to renegotiate debt. The problem is not with compound interest but the belief that money is real, if we accept that money is a creation of human imagination to make society possible, periodic defaults can be seen as a necessary evil. And yes the system functions on confidence, but all the current players have shown themselves to be untrustworthy.

> Sort of off topic, but then again, as money is being burned up, accounting does come to mind.

Long term declines in rates will have a crucial impact on the ability of people to save cash and build accounts for future purchase activity, i.e, if unemployment shoots to 10% and people have no way to receive dividends or collect interest, this will add to deflation, because there will be no way to make money and stimulate the economy (IMHO).

>> From http://acrossthecurve.com/

The salient point is that hundreds of billions of these will be issued over the next few months as banks take advantage of cheap funding and replace maturing paper. So there will be a flood of issuance in the 3 year sector from that source.

The Treasury has reintroduced the 3 year note and it is a monthly issue and not a quarterly issue. Expect $25 billion per month from that source. That is brand new supply. Fresh cash being raised. That will weigh heavily on the sector.

The funds rate is at or near terminal levels. It has traded recently well below the 1 percent target level. It will not be going much lower. That means that the shorter maturities which are anchored by the cost of funds will not have room to materially appreciate. Another negative for the short end.

The Federal Reserve program announced yesterday will center on buying longer dated risky assets. $600 billion of them.

Succinctly stated, you have natural buyers and natural sellers of sectors of the curve. In conjunction with an anchored funds rate the flattening process which is underway should continue and probably with 10 year notes and 30 year bond yields plumbing regions one would have thought unthinkable.

Send the bankers into the sun but leave compounding interest behind….pointless.

Systems function based on confidence….truth really doesn’t enter the picture.