Waiting For The Market’s Music To Stop

1. Ooooooo….. Jesus!

   What have I been writing about severing ties with the Big Four Banksters?
   And writing off all mortgage debt and ban loan sharking?
   If we NZ people are to ignore the bowel spasms coming out of the banks, lawyers offices, real estate agencies and sundry other leeches who bleed us out daily we’ll be ok.
   We’re miles away from the soon to be starving hoards and we have the ability to live off the land. Sure, a few of those aforementioned bankers, lawyers, real estate people and sundry leeches will lose the fat off their arses but we’ll be ok. So long as no one comes here and says, at the point of a weaponised drone; “Mine. This is now all mine.”
   Then? We call QE2 and request immediate back-up.
   “A couple of aircraft carriers, each with a fleet of fighter aircraft please and we’ll pop the kettle on. “
   As my old Aunt Violet would ominously say. “ Mark my words…”

   • Mark my words: QE2 won’t lift a finger to help us. We’re only useful to help fight in her wars, not the other way round. The true colours of the UK when it comes to NZ was clearly shown in the aftermath of the Rainbow Warrior terrorist attack of 1985.

     • 1985 was it?
       The dawn of neo liberalism in NZ.
       Hmmmmm …?

       I was being a little… what’s the word for it? Sardonic? Is that a word?
       Hence the popping the kettle on.
       The only reason QE2 would sail here and smite some ass would be if NZ was the last place to go to for her and her Ho’s and Bro’s. Everywhere else will be waaaaaay beyond fucked up.
       But then, I also like the Queen and her family. She’s certainly ‘ fruity’ when compared to a struggling family in Otara but then, she’s not a struggling family in Otara is she? She’s the fucking Queen of England. Not exactly the old woman on the bus material.
       I can’t understand it. That when people adore wankers like Zuckerberg and yet loath on QE2 with her lineage and what/not.
       Would you prefer trumpfh ? How about that dipshit Frenchman who’s trying to con the un-conable. The French people into Neo Narcissistic sadism. I mean, really? Soooo last century mon amis
       Putin? Is he preferable? He’s a candid little fellow and that candidness would follow him into the woods where he will shoot a M-fucker just to get a good nights sleep. He’s KGB man. What the fuck’s KGB anyway ? Kelloggs Grub Bubbles? No. I don’t think so. Not yet anyway. Not until we’re starving to death under a slate grey sky that’s been that way for forty fucking years, where the only thing left living, other than our sorry selves, are the cockroaches crawling up our arses.
       There’s a lot to be said for a benevolent dictatorship over a corporate monster bankster insisting on a profit from the dipshit consumer. And that is me and thee.
       And did you hear? That National Party MP telling Kim Hill that he believed Norman Kirk was assassinated for his role in sending a frigate to ( How the fuck do you spell Mururoa??? ) atoll? Ask Kim? Serious. Did you know? That hillary clinton wants The Pacific Ocean renamed The American Ocean ! So said John Pilger. Another leftie conspiracy theorist, jonky might argue. And that’s SIR jonky-stien to you and me matie-bro. That’s why jonky pushed what’s her name ( Patsy Reddy! ) into position as Gov’ Gen’. Poor old QE2 had no say. Patsy, however, has all that’s needed in a snake pushed into the lime light by a rat.
       No disrespect to actual snakes nor rats. I like rats actually. They’re bloody extraordinary wee beasties.
       Jonky, however. He’s not extraordinary. He’s entirely average.

       What’s going to happen? Globally an’ that?
       I can paint a picture by using an analogy. Think debt driven economy.
       A Fellow, not naming names gets flounced up for an evening’s prancing.
       He puts on his underwear, the flash ones with the designer label. He pulls up his trousers, the Marino wool ones, he slips on his Italian shoes, the brown ones, he flits into a shirt, the pure cotton one, and you can tell, they have the blood of Indian children’s finger prints on it. He shoulders the Armani jacket, checks his Rolex for the time as he walks to his Bentley, heads off down the sweeping driveway to the event where he meets with fellows similarly inclined.
       He sweeps and swoons and networks and manipulates and such like.
       Then, he wafts off home to his chalet where he disrobes to reveal and sunken chested, knocked kneed, small cocked bore who’s only advantage is his lack of conscience.
       I’ve just discribed the business man. Doing business. And business, will soon be Booming.

2. what gets me is when the proverbial hits the you no what, someone somewhere is laughing all the way to the bank. [pun intended]

   • So John Thain joined the board at Deutscha bank. He truely had no grasp on the extent of Merrill Lynch’s problems or else he lied to the firm Either way his presence in either company accomplished nothing. Deutscha bank is in real trouble. You don’t get Thain in unless theres a crisis happening.

     In Europe RBS’s GRG unit asset stripping over 6000 business globally. A class action suit is asking around $400bln in damages. RBS has put away tens of billions. Neither crises has been priced in so you know the tax payer will pay.

     History never rhymes but it always repeats.

     • Rumor was Douche Bank had a stealth bail out early 2016.

       With D. being the biggest holder of toxic derivatives on the planet the only surprising this g is that very few people picked up on this.

3. except it wont be silent….retribution never is…nor is it discerning

4. The core causes of the global financial-economic-environmental-social predicament are rarely mentioned, if ever mentioned, by any of the feature columnists on TDB, and it is left to us, the commenters, to highlight the fundamental flaws and inconsistencies in the system. The information we provide is routinely ignored.

   1. The creation of money out of thin air and the charging of interest on money created out of thin air is inherently unsustainable and is a scam, and was considered immoral in previous times. Where does the money to pay the interest come from? -from money already in the system which was created out of thin air, and in the case of governments, by creating yet more money out of thin air via selling bonds on the international market. The scam was exposed when the French demanded payment of US debts in the form of gold, and Nixon closed the gold window because American didn’t have the gold to back its debts. However, at the time of the closing of the gold window America was able to bully the world into compliance via its economic and military strength. Over the period since the Roosevelt government confiscated American citizens’ gold the price of gold has risen from around $35 an ounce to around $1900 an ounce, and back to the currently (manipulated) price of around $1350 an ounce. Over the 80-year period the value of fiat currencies has plummeted ….and governments apply the phony term ‘inflation’ to cover the scam.

   2. As brilliantly pointed out by professor Albert Bartlett, we are caught in a progress trap which required the consumption of ever-greater quantities of resources, and growth – rather than being the solution to any of our predicaments- makes all of them worse:

   http://www.albartlett.org/presentations/arithmetic_population_energy.html

   Since we live on a finite planet, resources are not infinite (as required by the bankers and economist than control the system) and numerous resource limits are being encountered right now.

   3. The entire financial system, and everything that goes with it -including water coming out of taps when we turn them on- is supported by the extraction and combustion of fossil fuels, especially oil. Without oil the financial system would collapse in a matter of hours……as summed up by the extremely simple statement: without energy nothing happens.

   For the moment, the system continues to function (in a very dysfunctional manner, rapidly messing up the climate) because, despite global extraction of conventional oil having peaked and gone into decline, there are still pockets of oil that can be extracted by non-conventional means.

   The moment of truth will come when frackers can no longer shatter rocks to extract small quantities of oil and sell it at a profit.

   Richard Heinberg, of the Post carbon Institute sets out the case very clearly:

   ‘The world’s central banks knew they had to act boldly to prevent utter collapse. Their solution (unsurprisingly) was to bail out the investor class, which had steered the world into the crisis to begin with. Over the course of the next few years the Federal Reserve, the European Central Bank, the People’s Bank of China, and the Bank of England together conjured nearly 10 trillion dollars in new money and unleashed it in the accounts of investors.
   It was at just this moment that the frackers appeared on the scene. They had the technology and they had the rocks. But they needed a lot of money to fund their ambitious business plans. That’s because the rocks were stubborn. Since those rocks lacked permeability, individual oil wells would deplete very quickly—with production in each well declining on the order of 70 to 90 percent in the first three years. That meant that relentless, expensive drilling would be needed in order to release the oil that was there. But, the frackers promised, with high enough oil prices the venture would be profitable.
   Part of the central banks’ strategy to avert economic Armageddon was to keep interest rates low. That made it easy for the oil industry to borrow money. But it also meant that bonds and T-bills began offering pitiful returns. Investors flush with cash needed somewhere else to stash it; they were looking for the next big thing.
   Suckers, meet swindlers. Get to know each other, see what you can do together, and report back in a few years.
   What happened next? A hell of a lot of drilling. Tens of thousands of holes were poked into the ground and blasted with tons of explosives, billions of gallons of water, and millions of tons of sand. And all were drilled and fracked with somebody else’s money (very likely some of yours, if your savings are locked up in a pension fund). On the whole, the enterprise was hugely unprofitable, and was built on a giant bubble of debt.
   Oh, but it gets worse. Like all debt bubbles, the fracking bubble is going to burst at some point. No one knows whether that will happen later this year, next year, or five years from now. But burst it will. And when it does, the carnage will extend far beyond the industry itself.
   The frackers insist that their technology is getting better—and it is, in the sense that longer lateral segments, more fracking stages, closer well spacing, and (especially!) drilling preferentially in the most resource-rich areas has increased individual well productivity and lowered costs of production. But that just means that core areas are getting drained even faster; meanwhile, closely spaced wells are starting to interfere with one another, resulting in declining well productivity. Evidence suggests that technological improvement has reached the point of diminishing returns.
   Yes, the amount of U.S. tight oil being extracted could continue to grow for a while longer—as long as investors keep ponying up money, or as long as the “sweet spots” last, or if oil prices rise significantly. But then production will fall and the country will gradually (or perhaps quickly) return to dependence on declining conventional oil production.
   As all this has been happening, the idea of a near-term peak in world oil supplies has become discredited. So discredited that even when multiple news organizations reported that the rate of new oil discoveries has plummeted to a level not seen since the 1940s, no one dared even mumble the words “peak oil.”

   http://www.postcarbon.org/new-u-s-record-level-oil-production-peak-oil-theory-disproven-not/

   Ever since Admiral Rickover and M. King Hubbert highlighted the long-term unsustainability of fossil-fuel-dependent economies way back in the 1950s (and were ignored by governments and economists) western industrial societies have been ‘living on borrowed time’.

   Time has almost run out, and fossil-fuel-energy-dependence collapse is inevitable within a very few years, and could occur in 2018.

   • “Time has almost run out, and fossil-fuel-energy-dependence collapse is inevitable within a very few years, and could occur in 2018.”

     Theres none so blind as those who will not see…and even if enough did I doubt there is a timely workable solution….the smartest ape?

     • The Hirsch Report of 2005 clearly identified the need to implement appropriate policies well before peaking in order to make a smooth transition. it also identified that the cost of delaying action would be greatly increased costs.

       From the Heinberg article:

       ‘Sometime in the next few years, global oil output will indeed start to fall and the fact will be undeniable—even though the cause will likely be attributed to a financial or economic crash. But even if tenacious peak oil supply theorists feel vindicated, confirmation of their warnings will carry no sweetness. That’s because the whole point of the peak oil discussion was to warn society ahead of time so that it could prepare itself for the inevitable moment when the economic impacts of oil depletion hit home. The Hirsch Report in 2005 concluded that it would take a modern industrial nation like the United States at least a full decade to prepare for peak oil.’

       The Hirsch Report was ignored by governments around the world…including that of NZ, and the idiotic policies of increasing petroleum dependence continued (and still continue!!) Even in the post peak oil world we live in, all we hear about from governments is a narrative dependent on increased oil consumption. Sane people would regard such policies as completely insane, since they lead to chaotic collapse, rather than a controlled descent.

       However, government energy policies are rarely, if ever, founded on evidence or sanity, and are almost invariably founded on the need to keep the bankers’ Ponzi scheme going just a little longer.

       So it’s off the cliff for everyone.

       • one minute to midnight…and oblivious

5. Oh, come on, Chris, the SKY is THE LIMIT, we can even break through glass ceilings, look at Jacinda and others showing the way to the TOP, that is in politics of course.

   We can continue to blossom in an ever growing economy, do not sow seed of mistrust and fear, John the Wonderful Great Leader Maximus Key showed us the way.

   There are NO leaky buildings in New Zealand, there is NO recession looming ahead of us, there are ENDLESS opportunities, as not all fish have been caught, not all grass been eaten by cows, not all rare earth minerals dug out of the ground, not all petroleum found yet, not all humans given a right to birth and a life in endless PROSPERITY.

   Listen to our most loyal servants, in the commercial advertising industry, it is all about being POSITIVE, and taking up opportunities, to make the best of our lives, we have a planet with infinite resources, with so much, plenty is there for all, even Bangla Deshis will soon enjoy living standards like ours.

   And the plastic in the sea, we can ‘mine’ that also, to turn it into new plastic products, and we can get water from Mars, if needed, also minerals, Elon Musk is showing the way with endless space travel.

   Peace is breaking out today in Syria, I have heard, sniff more of the freshly brewed coffee or tea, have a cold nice beer and enjoy your lives, things will get better day by day, houses will be affordable from next year, due to Kiwi Build, growth will see us through.

   And Donald Trump is the Messiah, he will go to Jerusalem and bring about the new age for all of humanity, we are truly blessed the way things are going.

   • The big rock candy mountain just under the pie in the sky…

     And Save for Your Retirement.

     First they came for the Baby Boomers – those over-entitled lay-abouts. But I was not a Boomer.

     Then they came for the Gen Xers, the tech savvy and ultra-smart. But hey. Who knew they’d fall flat?

     Then they came for the Millenials. But I had no money in Kiwisaver. No worries, eh.

     And then they closed the foodbanks.

     Now we’re all reading Swift’s ‘A Modest Proposal’ and trying recipes for Soylent Green.

     People made this flimsy system. Some people keep puffing air into the corpse lungs. When they give up – perhaps we can find better ways to play Monopoly.

     Or not.

6. We have to understand that debt is the accounting flipside of something else. Debt is the B-side. The left cannot understand crises of capitalism until it looks at the A-side. To understand anti-matter, one must first understand matter.
   While Ann Pettifor rightly focuses on private debt (and more importantly, private balance sheets, of which debt is only a part) rather than the public debt that is the focus of mainstream debt anxiety, we might note that the consequences of all debt actually being repaid is vastly greater than the consequences of debt itself. Debt is serviced, not repaid.
   Public debt, indeed, is the solution to NZ’s emerging fiscal crisis.
   I might note that the last polity that I am aware of that repaid its public debt was Nicolae Ceausescu’s Romania. Ceausescu was not rewarded favourably for his ‘fiscal responsibility’.

   • “the consequences of all debt actually being repaid is vastly greater than the consequences of debt itself”

     You’ve got that right Keith. The consequences of all debt being repaid would be no money in circulation save QE money and the tiny pre QE RB issued content of our monetary system. Plus of corse foldy cash.
     The question is ” is this a sustainable monetary system”
     I don’t think so ; not without controls on the issue of debt by banks.
     But when perceived value is lost as a consequence of market or company collapse , the debt remains. So the volume of debt must by now vastly exceed value, quite apart from the situation that no money either fiat money or Bank issued credit , is put into circulation to make interest payable except by the issue somewhere in the system of more debt.
     So the consequences of attempting to pay off all debt would certainly collapse the system. But that doesn’t mean that everlasting issuance of more debt will save it from collapse.
     D J S

   • All debt comes at a cost. That cost is inflation. The more money the government and banks create out of thin air chasing the same amount of goods and services, the more inflation you get. This is very basic economics. Ironically, the resulting inflation, for obvious reasons (e.g. higher food, energy and housing costs), actually hurts the poor and vulnerable far more than the mega rich who have all sorts of tactics to shield themselves from it (e.g. various assets and offshore bank accounts). Every Western country in the world has been massively increasing private and public debt levels, and inequality is worse than ever. That must be confounding for you(?). I guess you still haven’t put two and two together.
     http://www.usdebtclock.org/world-debt-clock.html

7. well “the people” as in those not 1%ers or their sycophants, would need to get organised very quickly and turn a catastrophic financial collapse into a fundamental shift in class power–aka a revolution

   the world could keep turning, Wi-Fi happening, and all the rest, if the workers were in control, “credits” might be put in banks for work done, and transferred to service providers etc. you just take the parasitic class and private ownership and appropriation out of the frame

   the obvious problem would be the political and organisational capacity of the exploited of the world to act quickly and that is the obvious bummer, in many places the various “deep states” would kick into action and deploy military and Police against their own citizens in order to protect capitalism–but never say never in politics, would empty shops and ATMs inspire a new era or a dystopian nightmare?

8. Ok, if things are about to go tits up what’s the advice on how to best prepare before they do, thanks.

   • Do survival training, learn to live off the land and sea, go and become independent of the so called ‘luxuries’ of daily life, grow your own veges, build a bunker, create a good stock of supplies for three to six months of food, heating and other materials, learn fighting skills, at least try to network and ally yourself with like-minded, prepared persons, to have access to this when the shit hits the fan.

     Re the latter, oh, shit, most are too busy looking only after themselves, ripping each other off, competing with each other, rather shutting themselves away with their computer, gadgets and comforts in their little or not so little dwellings.

     So perhaps forget that, when the collapse comes, it will be SURVIVAL OF THE FITTEST, jungle style, or wild west style, or cold, barren Sahara desert or Siberian wilderness style.

   • We also have Syria to worry about.Go and watch some re-runs of “Mad Max”. That will prepare you.Otherwise, collect recipes for road kill.

   • For all us dumb people, close the borders (which won’t happen) and repel the rich a-holes seeking safety. Kiwis will be incredibly hard to winkle out of their own turf. Cash up 1st stick it under the mattress. If it gets anal well be hard to beat. But I’m betting won’t happen, they’ll just kick it down the road some more.

     • Forget cash… it will be worthless. Go for tangible monies – gold, silver, toilet paper.

   • @Lone Comet.
     Excellent question.

   • There is very little you can do. The whole point is that we should be doing everything we can to stop thing going down the gurgler in the first place. In that, we have failed so far.
     Other than that, live as sustainably and self-sufficiently as possible (e.g. get some chooks, grow your own veges, save money, maybe get a generator and enough fuel to run it for a few days at least, make sure you have a few weeks of food on hand in case the supermarkets go bare etc). Get healthy – you can’t expect to rely on health services that are no longer being funded. Be prepared to move out of the city (if you live in one) – cities will be ground zero for potential civil unrest. If things get really ugly and law and order breaks down, you’ll also want something (e.g. a gun) to defend yourself and stop people looting your stuff.

9. Waiting for the music to… what? So, get some hand-wringing advice from the UK Labour crowd on the quiet days and if not that then, basically treading water. Until the next sandy sojourn somewhere…

10. “Debt on an unimaginably huge scale”?

    Debt to who? Who do we owe that debt to?

    If a bank had a million bucks and lent it all out, that million belongs to the investors.

    But if a bank has a million bucks and lends out $100 million, where did that other $99 million come from? Who is it owed to? Who will come asking for it?

    If that Big Crunch comes, there seems no reason for governments to take ovef that “missing $99 million. It really doesnt seem to be anything other than imaginary money.

    • Mjolnir
      My understanding is that the$99M is owed to the bank that lent it. That’s who issued it .What is counterintuitive is that as that 99 is paid back to the bank it is cancelled. It doesn’t get lent back out to someone else. That part of money creation os over. But the money so created (99) does live on. Not between the first borrower and her bank, but through the hands of the people and companies that received the (99) from the initial borrower for whatever purpose it was that she borrowed it in the first place. Like to build a house. The Piling contractor got some, The builder, the electrician, plumber, the local government got a lot of it etc. In their hands it was money. So they put it in their bank(s). Then it’s a deposit just like the deposits that made up the first $1m your bank had to lend. So away it goes again. This time the bank (banks collectively now cause those contractors don’t all use the same bank) has $99M to start with so it can lend $9901M using the same 1% deposit reserve ratio of your example.
      D J S

      • $9901M should have been $9801M sorry.
        D J S

11. Crap, this site keeps crashing. Just lost another one. As always nice article Chris Trotter and best of all comments to learn from.

12. The recent instability in markets is a good reason to pay down debt ASAP and buy some gold as a hedge against a currency crash.

13. new zealands private debt is huge backed by assets in bubble values i took the attitude we were on borrowed time its just a question of when the collapse happens

14. Poor ole Mike’s getting hammered from everywhere… Brian Rudman’s even weighed in on market reform…

    http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12029728

15. As long as the general narrative amongst bankers and economists remains as follows:

    1. debts and deficits don’t matter

    2. climate change is a myth (or can be solved by ‘carbon trading’)

    3. resources are infinite

    4. variations in interest rates and more money-printing can fix all problems

    5. a growing population is beneficial

    6. GDP growth is paramount

    and other such nonsense, we remain on the path to total ruination.

16. Hard to know which will come first, the next Great War or the next Great Recession.

17. Ok thanks folks, I am getting: pay down debt asap ( because the bsnks will foreclose? ie take your home if you have a mortgage and can’t sell – you won’t be able to right as no one will buy,?) change assests into gold or silver or …freehold land?.. be able to provide your own food, maybe buy a gun, and get outta town if you live there.
    Sorry to be lazy but what is the quick answer to how long did it take for people to lose everything after the crash before the last depression, last century…for the ordinary people.. Or what happened in the Waimar Republic, (excuse sp) prior to WW1..are we talking something similar occurring or something on a whole other scale…thanks

    • Right strategy if you can. You might need to keep the gold under the bed, I doubt a note allocating you a bit that lives in Fort Knox will be much security, but more than a deposit in a bank, esp a NZ bank that have no deposit guarantee unlike banks in most other countries.
      D J S

      • People don’t know NZ agreed to bail ins at the G20, 2014.

        In other words just be aware what most people think is safe may not be.

        Prep – just do what you can and stay informed. Recommend the new Chris Martenson book Prosper as it is practical.

      • there are vault and safety deposit box available not tied to the banks if you going buy gold and silver dont keep it in the house gold takes up less room aways buy 99 fine no gst on gold and silver and buy direct from the refiner and spread out the purchases gold silver can be volatile but the general trend over time has been up and there is no register in new zealand so vault it forget about it and never tell anyone but its there if you ever need it

18. Fun fact; whenever the global economy has a big 2008 style hissyfit, there’s one sector of the economy that just cranks along, almost as if nothing has happened. Can you guess which one? The cooperative economy. You know, the part where businesses are owned by their workers, or their customers, or some combination of both, not by capitalists who are just looking to skim the fat off other people’s real world economic activity.

    If we want to stop falling off this corporate-controlled hamster wheel every decades (remember the crash in the 80s, the “Asian Tigers” going belly-up in the 90s, then the GFC in the 00s?), we need a revolution in ownership. Doug Rushkoff talks about this in the context of IT in ‘Throwing Rocks…’, but I can’t wait to get hold of a copy of a new book by Marjorie Kelly (author of ‘The Divine Right of Capital’), entitled ‘Owning Our Future: The Emerging Ownership Revolution’. Here’s Kelly discussing the subject (58 mins):
    https://archive.org/details/scm-182742-marjoriekellywithdavidkortenb

19. no the market is just having a trumpasm. it only tanks in october.

20. Oil prices reflect market nervousness and market manipulation.

    Brent oil is currently $72.16, up from around $50 a year or so ago, which means the cost of doing most things in industrialised nations has increased significantly over the past year.

    My guess is that the saber-rattling of the orange monkey in the White House towards Russia will soon end, and oil prices will fall.

    However, the orange monkey could push ahead with the strategy of the American industrial-military-financial complex, which has applied since the 1950s, and trigger a major conflict in the Middle East that will cause major disruption to current global economic arrangements (or terminate them).

    As R.P McMurph has pointed out, major market ‘corrections’ normally occur in October, which suggests we can sit back and ‘enjoy the show’ for a little longer.

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