$10 TRILLION LOSS OF THE CENTURY

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Great Crash of 2016, third $10 trillion loss this century

Paul B. Farrell July 23, 2014

Commentary: Greenspan’s ‘black box’ syndrome now handicaps Yellen

Sometime after the Great Crash of 2016, Fed Chairwoman Janet Yellen will be testifying before Congress, just like Alan Greenspan was forced to do in 2008. She will be explaining why America has already had three megacrashes in the 21st Century, each draining roughly $10 trillion, each a direct result of Federal Reserve policy failures. She will be forced to explain why the Great Crash of 2016 was a clone of the bank credit crash of 2008 and the 2000 excesses.

But we already know exactly what Yellen will be forced to admit: That she is a clone of Alan Greenspan, who was a perfect clone of capitalism’s patron saints, Milton Friedman and Ayn Rand, going back decades. To fully understand this self-destructive lineage, simply focus your laser on the one admission Greenspan made to Congress in 2008, eight words that explain why Greenspan’s bizarre capitalism failed and why it will happen again and again under Yellen …

“I really didn’t get it until very late.”

No, you don’t have to be a neuroscientist, psychologist or behavioral-finance genius to understand what Greenspan was saying, in this confession to Congress, to American investors, the whole world:

Greenspan says capitalism was working just fine … in his head … for decades … then suddenly, capitalism stopped working … capitalism exploded in his face … capitalism is a bubble machine … very predictable bear-bull cycles … and a bad habit of exploding … just when you hope to get just a little richer … but instead, capitalism’s bubble explodes … triggering trillions in losses … did it in 2000, again in 2008, certain to repeat around 2016 …

He was on the job 18 years, Not enough. Unfortunately the esteemed head of our monetary system never “really got it until very late.” Capitalists never do “get it.” Never will get it. Neither does Yellen, she’s just a clone of robotic Greenspan. It’s the curse of capitalist leaders.

Greenspan was rigid, dogmatic, ideological, misleading 95 million American investors and billions worldwide for 18 years as de facto head of the world’s monetary system. His book “Age of Turbulence” netted him a nice $8.5 million, lots of speaking and consulting fees. But the stock market he left behind crashed in 2008 with investors losing over $10 trillion in market cap, on top of the trillions lost earlier in 2000 during the middle of his tenure as Fed chairman.

So put it on your calendar, a new bubble is certain to explode in Yellen’s face by 2016 with trillions more market cap lost.

Greenspan ‘black box’ syndrome infected Bernanke, then Yellen’s brain

The “Greenspan black box,” a neural data recorder, saved everything in his brain for the past 40 years. And you don’t have to be a neuroscientist, psychologist and behavioral economist to analyze the data is in Greenspan’s brain, with contrarian evidence there, but hidden. That’s why he said: “I really didn’t get it until very late.” The risks were actually in his neural system, but isolated and ignored … till too late.

Yes, our Fed leaders’ brains know their capitalist dogma has stopped working but can’t admit it, hang on to a failing system rather than moving on. Greenspan tried, confessed: “Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief.” But Bernanke, and now Yellen still prop up America’s failing capitalism.

But while the facts were there, Greenspan’s brain blocked the warnings: “I really didn’t get it until very late,” too late to change course. It took the 2008 exploding bubble before Greenspan was shocked awake. Then, finally aware his 40-year theories of capitalism weren’t working, Greenspan admitted to the world: “Yes, I found a flaw, that’s precisely the reason I was shocked because I’d been going for 40 years or more with very considerable evidence that it was working exceptionally well.”

For 40 years his capitalist brain favored ideology over facts … beginning back in the 1960s, a couple decades before Reagan appointed him Fed chairman and he served from 1987 until early 2006 … while he advised four American presidents … while congressional leaders trusted his judgment and guidance … while central banks worldwide hung on his every word for 18 long years … as capitalists called him “Maestro” and “Rock Star.” Yes, Alan Greenspan was the great oracle of capitalism for investors worldwide.
Capitalism works? Bubbles, crashes, cycle repeats … who can’t “get it?”

Then, after 40 years, something bad happened … capitalism stopped working. So let’s rerun Greenspan’s tape, analyze it in our neural brain translator. The setting: Greenspan in Washington, a few years after he left the Federal Reserve.

http://www.marketwatch.com/story/great-crash-of-2016-third-10-trillion-loss-this-century-2014-07-23?link=MW_story_popular

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dunce

Technically, trillions can’t be “lost” when it was all built on phony credit expansion and faux wealth, such as companies like Facebook that is valued in the billions when it produces nothing of valuable, tangible substance.

If there’s one thing I’ve learned from reading TBP, it’s that a crash of the current stock market would simply be a resumption to normalcy; a more accurate picture of what our market would look like without the manipulation of miscreants like the Fed or other Western central banks.

Axel
Axel

I don’t think that the folks who blame Ayn Rand really understood her point of view and her work. The money printing by the Fed and the siphoning of money by crooked bankers is the opposite of what she held dear. She despised “crony” capitalism, best represented by the character of Oren Boyle in Atlas Shrugged. His character was hardly depicted in a positive light.

pietropaulo
pietropaulo

Agree with Axel. True capitalism works when you have EARNED capital by creating value in an economy. A miner digging up minerals. A farmer growing food. A plant worker making things.

That CAPITAL will be stored somewhere. It SHOULD be stored in a TANGIBLE good,,, like gold, silver, property, bales of hay, whatever.

But along comes an inventor. His device works and he wants to make some of his own capital, (which adds yet more value to the economy). But he has no capital of his own, (yet) which will be required to make his device in quantity so sell into the economy.

So he approaches someone who HAS capital,,,, you know, the guy who EARNED it by adding value to the economy.

They come together, the inventor and the CAPITALIST and they strike a deal. Whatever that deal is, the CAPITALIST gives the inventor his capital to INVEST in a plant and equipment to build his device.

The CAPITALIST takes a risk,,, the device may or may not sell. He is rewarded for the risk by getting a percentage of the profits. He may become a shareholder, he may be a direct partner.

Both the inventor and the CAPITALIST have now added value to the economy.

Multiple entities now enjoy the use of that CAPITAL, the factory builder, the electrician, the plumber, all the employees making the device.

That CAPITAL, that once just sat there, waiting to be consumed by the CAPITALIST is now WORKING to produce more CAPITAL, and this adds more value to the ECONOMY.

There is nothing wrong with TRUE CAPITALISM.

What’s wrong is our system of creating fiat currency out of thin air with nothing tangible to back it up. Worse yet, this currency, instead of being issued for free, by the government AS DEMANDED BY THE CONSTITUTION, this currency is issued by a private entity, ( the Fed ) OUT OF THIN AIR, and is LOANED to the government/the people, AT INTEREST. Worse yet again, is the CREDIT BASED system of creating capital.

I have a 25,000 dollar limit on my credit card. I could buy a car with it. If I did, the instant the car dealer swiped my card, 25,000 dollars was created OUT OF THIN AIR. AT INTEREST. A damn healthy interest too,,,, not for me, for the credit card company.

When that magic 25,000 dollars is created, the car dealer deposits into his bank. Most of it goes to pay his expenses of course, including buying the car from the manufacturer but remember, that “money” didn’t exist a short while ago. It wasn’t capital created by someone who added value to the economy. It’s “magic money” same kind of “money” you find in that board game,,, you know,,, oh yes, MONOPOLY.

PONZI, PONZI, PONZI, not capitalism.

Then there’s the corruption and greed of the financiers, bankers and politicians. Mostly politicians because we hired them to enact laws for OUR benefit. The bankers and financiers are buying the politicians to corrupt true capitalism into some kind of Frankenstein’s monster.

Even Mary Shelley would be horrified.

Balzytch
Balzytch

pietropaulo

We don’t have capitalism, we have socialism, central planning, central banksters, oligarchs, tax and and spend criminals in Washington, 20 million union govrnment drones, a fascist police state, an alien FSA barbarian invasion and a dying economy and middle class. Please try again.

A. R. Wasem
A. R. Wasem

Balzytch – Contemporary Cabal economics and finance has absolutely nothing to do with Ayn Rand’s beliefs. To state that it does betrays a complete ignorance of her philosophy – Objectivism. BC-LR to all

Paul B
Paul B

Those questioning the use of Ayn Rand in this piece have it absolutely correct. When asked in the 1950s whether the US had a capitalistic system or not, she replied (and I paraphrase): “Absolutely not. The United States has a mixed economy.” By that she meant that the were, even then, enough government interventions that our economy no longer qualified as “capitalism”. Can you imagine her answer today?
In addition to that, the piece is on VERY shaky ground even discussing banking practices and capitalism in the same sentence. Last I checked, all economies including socialist, fascist, and communist all requires and use banks. Why is capitalism responsible for the fascist behavior of the world’s banks? It beats me but the leftists sure believe it so.

Eddie
Eddie

“If there’s one thing I’ve learned from reading TBP, it’s that a crash of the current stock market would simply be a resumption to normalcy; a more accurate picture of what our market would look like without the manipulation of miscreants like the Fed or other Western central banks.”

Yeah, except it would also drive down the nominal value of every asset class there is, including gold and silver and real estate. And the velocity of money, which is already at a near standstill, would come to a full stop. For guys in the service economy, that means fewer customers.

If it weren’t for that, I’d be fine with a crash.

pietropaulo
pietropaulo

Balzytch,

I’m puzzled that you didn’t get the point. YES, we do NOT have TRUE Capitalism today in most countries that have a Central Bank under the control of the IMF, Bank for International Settlements, World Bank etc.

These are the entities that have destroyed true Capitalism. These are the entities that have worked hard to destroy self sufficiency. That promoted women’s “liberation”. That caused conditions that mandated that to survive and prosper, a SECOND income was necessary. At one time a MILKMAN could support his homemaker wife and two kids. He could put them through school. He paid off his mortgage and had a nest egg to retire on.

When the second bread winner gambit is exhausted as it is RIGHT NOW, is when the SWHTF big time. The insanity is that not only is the second bread winner out of a job but BOTH of them are.

And it ALL boils down to creating “money” out of thin air and loaning it into the economy. It also boils down to the role of the greenback as the world’s reserve currency. That little scheme allows the US of A to pay its bills to other countries with even MORE Ponzi money. Not to mention the Military, Industrial Complex where trillions are spent on bullets and bombs instead of badly needed infrastructure.

When they were building the Hoover Dam, there was NO shortage of people more than happy to work damn hard to earn a paycheck. THEY WERE STARVING.

But as with Rome in its waning years, Empire overreach by the USA is approaching critical mass. Welfare is much like the bread and circuses of old Rome. Keep the rabble fed and distracted and keep them from rising up. Too late, Rome got fat and lazy and the Barbarians made it to the gate.

Today, it’s the enterprising Asians, no Barbarians they.

See a movie called Loopers with Bruce Willis, (one of his best) a very clever story with a message for all of us.

Quote, “I’m from the future,, GO TO CHINA”.

You are right, we do not have Capitalism today. Yes, we have too much welfare and government handouts. But haven’t you noticed? NO Republican has ever undone what Liberals have put in place. No one dared except Dr. Ron Paul. Both Liberals and Conservatives were attracted to his message but the REPUBLICANS did plenty of dirty tricks to keep him from getting the nomination.

Good god man, McCain and PALIN? Both were selected to lose.

AND, all it takes is ONE lawmaker to invoke impeachment of the current, CIC,,, do you see ANY Republicans stepping up to the plate?

Apologies to you, you didn’t make this a left or right issue but that is precisely the problem. WE ARE ALL AMERICANS. Stop letting yourself be divided along idealogical lines.

Liberals spend on social programs that bankrupt the country. Conservatives spend on “defense” that bankrupts the country. Each gets a turn and nothing EVER changes.

Rant over, back to the movie, Oblivion, which is where we’re headed.

JR
JR

Ummm… so what’s YOUR solution? Marxism?Leninism? What? Wasn’t the 100 MILLION (Black Book of Communism) to 160 MILLION (Dr. RJ Rummel, U. of Hawaii). Is the grinding poverty of socialism preferable? And who says we have capitalism? Since LBJs socialist War on Poverty, which spent $20 trillion (and counting), we continue in a not-so-capitalist system. And I’m NOT talking today’s crony capitalism, which is no more related to capitalism than anti-matter is to matter.

pietropaulo
pietropaulo

JR, https://www.youtube.com/watch?v=urE5dY43Hwc speaks to the dangers of ALL isms. Do more research about the Hamilton VS Jefferson debates.

Jefferson`s ambition was to prevent any central bank from taking over the power to print the nation`s currency which he did and America prospered. They tried to kill him over that but both guns in the assassin`s hands mis-fired.

But years later, the `Federal Reserve`was created and only a decade and a half later, Black Friday happened and the country was plunged into Depression, the very thing that a central bank was SUPPOSED to prevent. It took another world war and the complete control over the economy by war powers to lift the US out of depression. BUT, war only benefits an economy if it`s not YOUR country that getting bombed.

Today, the lunatics in Washington are trying to provoke Russia into WW3 to cover for the coming monetary, financial and economic collapse. As with WW2, every single aspect of American life will be under strict control. RATIONING of everything, even toilet paper. Get used to saving it for the second go on the other side.

MH 17 was diverted from its normal flight path by UKRAINIAN flight control and shot down by Ukrainian jets,,, NOT by a surface to air missile.

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