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I Blame The Central Banks

For the coming bond bubble disaster
Wednesday, August 27, 2014, 8:17 PM

The current bubbles in financial assets -- in equities and bonds of all grades and quality -- raging in every major market across the globe are no accident.

They are a deliberate creation. The intentional results of policy.

Therefore, when they burst, we shouldn't regard the resulting damage as some freak act of nature or other such outcome outside of our control. To reiterate, the carnage will be the very predictable result of some terribly shortsighted decision-making and defective logic.

The Root of Evil

Blame can and should be laid where it belongs: with the central banks.

They were the "experts" who decided to confront the excesses of decades past (which saw borrowing running at roughly 2x the rate of real economic growth) with even easier monetary policies designed to spur even more borrowing.

Rather than take stock of the simple fact that nobody can forever borrow at a faster rate than their income is growing (no matter how large that entity may be), the Fed, the ECB, the BoJ and the BoE have conveniently overlooked that simple fact and then boldly claimed that the cure is identical to the disease.  If the problem is debt then the solution is even more debt.

If the Fed, et al. were doctors, they would prescribe alcohol to the alcoholic. They would administer more lead to the lead-poisoned patient. They would call for more water to put in the pool where a drowning individual is floundering.

The bottom line is that the Fed and its ilk made the disastrous decisions that gave us the first two burst bubbles of the new millennium. And the wonder of it all is that, instead of being met at the gates with torches and pitchforks and held to account for their errors, they have instead been granted even greater powers, less oversight, and practically zero blame.

And now they’ve given us a third and, I suspect, final bubble. By which I mean I think the effects of this bursting bubble will be so horrendous that a hundred years might pass before people will again be in the mood to speculate on fantasy wealth.

My hope is that, when this third bubble pops, the figurative (and, perhaps, literal?) torches and pitchforks come out. Finally forcing the central banks to answer to the public for their grievously poor decisions.

And yes, the investing public also bears a portion of the responsibility for playing along with the central banks. For years, some have consoled themselves with stories about how This Time Is Different, and many have ignored many obvious warning signs as they've enjoyed stock market and bond gains fueled by seemingly limitless liquidity.  

But in the end, it's the central banks that  set the tempo and the melody at the dance hall.  When they flood the world with liquidity and set interest rates to 0%, they enforce a Hobbesian choice: either play along in the risk markets, or sit in cash earning less than nothing as inflation eats away at your purchasing power.

The central banks are entirely to blame for mis-pricing money and that is the fundamental error that drives every bubble and betrays capital into hopeless investments.

So let’s all remember to place blame where it is due when the bubble bursts. We shouldn't act surprised because there’s really no honor in being caught unawares by something so obvious.

The Biggest Bubble(s) Of All Time

We’ve covered the equity bubble in the past, but today we’re going to cover the bond bubbles (yes, plural) because the current excess in the bond market is the granddaddy of them all, and is far larger than anything ever recorded in history by a very wide margin.

But for the sake of completeness, regarding equities, if you ever wanted to get the willies about the stock market in a single chart, I think this one from Doug Short of Advisor Perspectives which plots the relationship between equity prices and margin debt is about as good as it gets:

(Source)

Margin debt is simply money borrowed to buy equities.  Typically speaking, an average investor with $100,000 in an account can buy up to $150,000 worth of stock. Margin debt is fuel to a rising market and a lead anchor for a falling market. 

Yes, perhaps this time is different, or perhaps it’s exactly the same with speculators borrowing more and more as stock prices rise, sure in the knowledge that they will be smart enough to get out of the way of a falling market (this time).

But, enough of material we've covered here recently. Back to bonds.

When the bond bubble bursts, so much that people believe to be true will be revealed to be obvious and distressingly ordinary illusions.

When there’s simply too much debt, in the period leading up to a debt bubble's bursting, everyone is counting on getting paid his or her money back, both the interest and the principal. After the bubble bursts, it’s plainly obvious that no such thing will be happening.

As is always the case with bubbles (of any sort), the only important question that needs to be answered is: Who will take the losses?

One simple answer to that question is: Whoever is holding the bonds when the bubble bursts.

Bubbles are structured like a game of hot potato. When the timer finally dings, the person holding the potato loses. It doesn’t matter one whit whether the 'hot potato' was a tulip bulb, swamp land, a house in Las Vegas, or a paper financial security.

The really striking part about the global bond markets today is that the potatoes have never been more numerous, or hotter.

I suppose this would be a good time to revisit how Einstein defined insanity: trying the same thing over and over again and expecting different results.

Unfortunately for those hoping for a different outcome, history is 100% consistent on the matter: Bubbles always burst. And when they do, what people thought was fabulous wealth is proven illusory, and it simply vanishes.

Not that this clear historical record is keeping humans from trying to cheat the odds.

Given that the Fed has engineered three increasingly larger bubbles within an unprecedentedly-short fifteen-year time span, perhaps we shouldn't persecute them. After all, they may easily be able to plead 'not guilty' by reason of insanity.

$100 trillion – is that a lot?

We frequently throw around big numbers in our analysis. We even try to explain them in terms that help us mentally grasp an appreciation of their enormity (watch the video How Much Is A Trillion?, as an example). But the size of the bond market across the developed world defies even our best efforts.

After all, if $1 trillion dollars is a stack of $1,000 bills 68 miles high, then I guess $100 trillion would be a stack 6,800 miles high:

Global Debt Exceeds $100 Trillion as Governments Binge, BIS Says

Mar 9, 2014

The amount of debt globally has soared more than 40 percent to $100 trillion since the first signs of the financial crisis as governments borrowed to pull their economies out of recession and companies took advantage of record lowinterest rates, according to theBank for International Settlements.

The $30 trillion increase from $70 trillion between mid-2007 and mid-2013 compares with a $3.86 trillion decline in the value ofequitiesto $53.8 trillion in the same period, according to data compiled by Bloomberg.

The jump in debt as measured by the Basel,Switzerland-based BISin its quarterly review is almost twice the U.S.’sgross domestic product.

Note that global debt climbed by $30 trillion between 2007 and 2013, a 42% increase while global equities actually declined a few trillion (to $54 trillion), yielding a global debt-to-equity ratio of almost 2. [Note: Global equities are now valued at $66 trillion and are pouring on almost $1 trillion/week lately. Of course, they have a habit of going down, from time to time, even more quickly than they rise.  Something that is easy to forget in today's environment]

So, a 42% increase in just 6 years. Did global GDP advance by 42% during this same period? No. Not even close.

Did private companies borrow all that money planning to plow back into productive enterprises? Nope. Companies borrowed relatively little of $30 trillion, and even then, they mainly used that newly-borrowed money to buy back shares and/or stash it on their balance sheets.

Who did borrow all that money then?

Why, nations did. Sovereign entities that were desperate to keep things afloat and borrow heavily (because private concerns weren't able to take on new debt fast enough). 

Why? Because the world's debt pile must keep expanding. That's the world we live in today. If the pile should start to contract, the game of Who Will Take The Losses? begins. And governments know (sometimes consciously, sometimes subconsciously) that the debt bubble has become so monstrous, and so interconnected globally, that even a moderate correction will wipe out so many players that the world financial system will be brought to its knees. Or worse.

In Part 2: Something Very Wicked This Way Comes, we provide great detail into why sovereign and corporate (both high-grade and junk) debt markets simply and mathematically must contract. Current prices are so historically divorced from fundamentals at this stage that this 'prediction' is about as elementary as counting on gravity to bring a tossed stone back to earth.

Given the excesses of the stock and bond markets I am increasingly concerned that this next bubble burst will be far worse than any that has yet come since I've been alive. Countries will fail financially and economically, political upheaval will follow, fortunes and dreams will be shattered, and lots of people will lose their jobs.

In short, lots of things will break and cease to function as the greatest wealth transfer in all of history plays out.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access)

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43 Comments

David Allan's picture
David Allan
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I'd love to be a fly on the wall

First up I want to say this is a great article - very much at the heart of what is unfolding. One of the great astronomers of the 20th century (maybe Hoyle , maybe Hubble, I can't remember - said we've only got one chance to get off this planet. He was talking about the colonization of space in context of the energy window. Anyway my version is that we've only got one chance to achieve a sustainable civilization ( if we miss that opportunity societal infrastructure will quickly crumble away beneath our feet.) We're probably already 20 years too late.

And now they’ve given us a third and, I suspect, final bubble. By which I mean I think the effects of this bursting bubble will be so horrendous that a hundred years might pass before people will again be in the mood to speculate on fantasy wealth.

I know that the overarching message needs to be presented to the audience in a way people have a chance to take it on board. It needs to be structured so as not to alienate 90% of the readership and to give people a chance to absorb the general message while developing capacity to draw their own conclusions. This article is actually extremely grim as it reads. But do we really think we might be ready for another go-round of financial hi-jinks in 100 years?

Again I want to stress this post is not a criticism - I think it is very skillful communication of a highly disturbing message. But I'd still love to be a fly on the wall during one of Chris and Adams chats - in their private hearts what do they really think is coming down the line,

Bankers Slave's picture
Bankers Slave
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Brother Nathaniel tells it how it is!

Moderator:  removed content.

jennifersam07's picture
jennifersam07
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This is offensive.

Is this a joke?

pat the rat's picture
pat the rat
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housing bubble/bond bubble

The housing  bubble was easy to see coming,it was in your face and every where. This bond bubble is more difficult to see coming it is in the world of trade,you need more attention.  

Time2help's picture
Time2help
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Voltaire

jennifersam07 wrote:

Is this a joke?

jennifersam07's picture
jennifersam07
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Would that it were that simple

Please no scapegoats.

Zoltar's picture
Zoltar
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rope and lamp posts
When the polite and temperate Chris Martenson acknowledges that it's time for the torches and pitchforks we must surely be approaching some sort of critical mass.
 
Those humble tools are the traditional antidote for bankers and, in the big scheme of things, nothing has changed.  Or, as they said on the Place de la Concorde, plus ça changeplus c'est la même chose.
Time2help's picture
Time2help
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Not looking for a scapegoat.

jennifersam07 wrote:

Please no scapegoats.

Not looking for a scapegoat, just making a point. Just because a particular topic may be uncomfortable doesn't mean you should always turn away. I do not like censorship.

Looking for the truth. Tired of all the lies. So many lies.

What is the truth?

Zoltar's picture
Zoltar
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scapegoat

There is a critical difference between a scapegoat and a culprit.   Scapegoats get blamed for the crimes of others.  It is time to identify the culprits and hold them accountable.  That's what Chris is proposing in this column.

The truth is not that elusive.  Plenty of people recognize it for what it is.  After they've caused a disaster the culprits try to convince us that "it could not have been foreseen."  As is often the case, that would be a lie.  The coming crash can be foreseen, and people who see the truth for what it is are not being heard.

HughK's picture
HughK
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Yuck

BankersSlave,

In addition to nodding in agreement at Zoltar's comment, I will, with apologies to Tom Robbins, just recite a mantra: "Yuck."

Bankers Slave's picture
Bankers Slave
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Please Hugh K feel free to

make your inner most sentiments known. I am not easily offended nor would I court the censorship of anything you have to say!

HughK's picture
HughK
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Fair enough

Sounds good, BankerSlave.  I will send you a PM so as not to bring too much controversy here, as I also appreciate and respect many of your posts and may have simply misunderstood.  :)

Cheers,

Hugh 

Thetallestmanonearth's picture
Thetallestmanonearth
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don't get distracted.

Don't get distracted, BANKERS are the enemy.  If you boys want to lynch some jewish bankers I'm not here to stop you, but don't get so caught up in your anti semitism that you miss all the other bankers too.  I'm just going out on a limb here that there are probably a few christians, atheists, Muslims, pagan and otherwise affiliated bankers who have participated in the run-up to the problems we are going to have to solve.  Feel free to start where ever you choose, but save enough rope for the rest of them too.  In the mean time, I'm going to be over here doing my best to ignore all the fuss and get on with my life to the best of my ability.  Good luck!

Time2help's picture
Time2help
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Wow, this thread escalated quickly

And oddly enough, I don't recall reading anything about ropes, pitchforks or lynchings in the article. 

Some Rule of Law applied to the financial system would be nice, however (my 2 cents).

Luke Moffat's picture
Luke Moffat
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Back on Topic

Whenever one set of people can create money out of nothing and can call it a profession whereas another set of people doing the same are called 'counterfeiters' you get inequality. These so called professionals get to decide where the money goes. The rest of us then chase yield. It's just follow the leader with all eyes on the Pied Piper and no one looking where he is going. Unless you deny central bankers the sole ability to create money nothing changes. Another savior will come along and lead us to the promised land, shortly followed by the deepest, darkest abyss.

Are we looking here for solutions -> local currencies, gold standard, alternative currencies

Or do we get more creative? Who exactly should determine what money is? I would suggest an agreement between buyer and seller determines what money should be as they are the ones who actually require it. A potential problem would be the universality of that money. What happens to global trade? Biggest trades create biggest amounts of that money. This way cooperation is required to produce money and not speculation and lending. This is my current line of thinking but I'm still open to other ideas/criticism.

Arthur Robey's picture
Arthur Robey
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Your Homework.

The primary motivation for creating the Federal Reserve System was to address banking panics.[3] Other purposes are stated in the Federal Reserve Act, such as "to furnish an elastic currency, to afford means of rediscounting commercial paper, to establish a more effective supervision of banking in the United States, and for other purposes".[23] Before the founding of the Federal Reserve System, the United States underwent several financial crises. A particularly severe crisis in 1907 led Congress to enact the Federal Reserve Act in 1913. Today the Federal Reserve System has responsibilities in addition to ensuring the stability of the financial system.[24]

Wiki

Isn't that nice? (I wonder who wrote that up in Wiki?)

"an elastic currency"? What do they mean "elastic"? I think they succeeded.

I was actually trying to find out how many FEDs there have been in history. How many times this experiment has been tried.

That is you homework. I have run out of time, again.

Zoltar's picture
Zoltar
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Chris's words:

"My hope is that, when this third bubble pops, the figurative (and, perhaps, literal?) torches and pitchforks come out. Finally forcing the central banks to answer to the public for their grievously poor decisions."

The fact that you don't recall them is scarcely pertinent.

Curious that you don't regard a careful reading to be a prerequisite to expressing an opinion about it.

Time2help's picture
Time2help
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Roger that

Zoltar wrote:

"My hope is that, when this third bubble pops, the figurative (and, perhaps, literal?) torches and pitchforks come out. Finally forcing the central banks to answer to the public for their grievously poor decisions."

The fact that you don't recall them is scarcely pertinent.

Curious that you don't regard a careful reading to be a prerequisite to expressing an opinion about it.

Point taken. 

Thank you for your insightful third post in four years.

Zoltar's picture
Zoltar
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Opinions by the pound

I yield to the vastly superior quantity of your posts.

jennifersam07's picture
jennifersam07
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Good question

I was objecting to anti-Semitism. Bankers, hate on them all you like.  

earthwise's picture
earthwise
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Touche

I see what you did there. Quite clever.

HughK's picture
HughK
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1st E culprit=Bankers; 3rd E culprit=Me

The financial lobby and economic policymakers beholden to it may indeed comprise the bulk of the first E culprit.

But, the three E's can be thought of as three Russian matryoshka dolls, the smaller ones nested inside the bigger ones.  So, the largest of them, Environment, is much larger and more significant than Energy, and certainly more than Economy.

The larger of the three E's encompass the smaller ones in time as well:

The destabilizing shift that Chris succinctly dubbed Economy is the end of the debt supercycle and the decline of the US-dominated international financial order.  We might say that we are transitioning out of an economic system that started with Bretton Woods in 1944.

The destabilizing shift that we call Energy here is passing the peak of conventional oil production; I don't know if we've passed the peak of anthracite coal production as well, but high quality coal reserves are also depleting rapidly.  Coal and oil supplied the vast majority of the energy for the industrial revolution, an event that the characters in Paolo Bacigalupi's post-collapse world call the industrial expansion.   In other words, we are now facing a transition from an industrial expansion that began around 1800 to an industrial contraction. This second, larger matryoska doll encompasses most of the period when the British held global hegemony as well as the period of American hegemony (so far) that coincided with the dominance of the USD.

The destabilizing shift that we call Environment is a massive transition out of the relatively stable and moderate Holocene climate and biosphere that emerged after the last ice age to a climate and biosphere that are less hospitable in a number of ways due to human impact.  Climate change is the keystone of this third shift, but even if one is not convinced of that, there are enough other major changes in the biosphere that make the natural systems in which we live in today MUCH less likely to be able to sustain 2-3 billion people long-term (to say nothing of 7 billion) than even a few centuries ago when our impacts - although large - had not reached the extreme and intense levels of industrial humanity.  

This third transition, then, is about the degradation of natural systems that have been relatively stable and moderate.  Neither too a hothouse Earth nor an ice age, but rather a climate and biosphere that is "just right" to use the Goldilocks metaphor.  The Holocene is the biosphere in which all human civilizations have developed, and we seem to be leaving that state.  So we are leaving a period of time which started around 10,000 B.C.  This encompasses the entire agricultural age as well as the industrial expansion.

Even if you disagree with the claim that industrial civilization has cut the Holocene period short and now entering a new geologic age, called by Stoermer, Creutzen, and many other scientists the Anthropocene, it's still hard to deny that the Earth's natural systems - ranging from collapsing fisheries, shrinking forests, depleting fresh water, degraded soil, release of industrial toxins, all the way to the pH levels of the oceans - are pretty severely out of balance and getting more so.  We're talking about changes that will still seriously challenge the survival skills of homo sapiens sapiens long after the U.S. dollar and the United States itself has been forgotten.

Image source: How Mankind Remade Nature - Wired Magazine

Unfortunately, unlike the much simpler and less significant first E - I see the culprit behind the third E when I shave in the morning.  It's not that - in the schema of behavioral economics - the major destabilizing shifts of the third E don't have a face.  It's that they do have a face and it is mine.  :)

Cheers,

Hugh

 
Thetallestmanonearth's picture
Thetallestmanonearth
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solution

Unfortunately, unlike the much simpler and less significant first E - I see the culprit behind the third E when I shave in the morning.  It's not that - in the schema of behavioral economics - the major destabilizing shifts of the third E don't have a face.  It's that they do have a face and it is mine.  :)

Stop shaving in the morning. No more guilt. Problem solved. /sarc

Time2help's picture
Time2help
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Opinions by the Pound

Zoltar wrote:

I yield to the vastly superior quantity of your posts.

I laughed my ass off when I read this post (and up-voted it as well).  Note to self: Avoid getting into a battle of wits with other PP'ers. Some are obviously well armed.

There is an awful lot going on and I do find it hard to keep track of it all.

Great post by the way, Hugh, IMHO.

climber99's picture
climber99
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Could this be the LAST bubble of the oil age?

Could this be the LAST bubble of the oil age? If it is, then it could keep going for a lot longer and get a lot larger than we think possible at the moment.

Debt is necessary (in our present monetary system)  for consumption and employment because it provides 95% of our money supply.  We can pump up debt as high as we want as long as we can afford the interest payments. Just manipulate bond rates lower and you can borrow more.  Simple.

Paying back our debts is red-herring.  We are never going to pay back our debts at today's purchasing power.  Everyone knows this. That is not the purpose of debt.

Default? No. QE can go on forever. Just don't expect your purchasing power of your money to stay the same !

Ed

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climber99
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Following on.  Debt levels

Following on.  Debt levels (money supply) will continue to increase until we reach the limit to growth imposed by the resource base (especially fossil fuel energy resources) of the Planet.  Beyond the limits to growth, expanding our money supply will have no effect on consumption and employment.  Welcome to the age of resource wars.  Some would argue that we are very close to that point, if not beyond it.

Ed

Luke Moffat's picture
Luke Moffat
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Elastic Money

My apologies, I didn't declare that the medium should be physical and not an abstraction that can be expanded ad infinitum. I'd add two limits to money; one physical (or at least full reserve backed by physical), the other restraint by law. I suppose this leads back to a gold standard but I'd like to see a variety of currencies based upon local availability which undermines the ability of any single currency to dominate. Crudely speaking the nature of money would act like a 'drop down menu' with those involved in the transaction deciding which one they will use. Again, this still requires work (and the small matter of global acceptance).

Excellent post, Hugh. I acknowledge that most of our attempts to resolve the three E's are futile considering that the problems are greater than the small number of minds willing to address them. Currencies come and go but we've only got the one spaceship. Perhaps we should remind ourselves that we are simply clever monkeys and take solace that a few managed to make it to the moon. However, I'm one of those annoying dreamers who still believes that a way out is possible (call it cognitive dissonance) - I can't function any other way (I don't believe in free will). To solve these problems each one needs to be broken down individually and then reassessed in the context of a larger world.

So I start with the smallest, currency - it's the most immediate to me (based on those primal feelings of being robbed/cheated). Next comes energy. The environment I can do very little about directly. Perhaps you pick the best spot and hunker down. I suppose it depends on how you deal with the issue. Do you view the world top down and solve it as a system? Or do you view the world bottom up and solve the details? Or do we sit back and watch the fireworks? That depends on perspective. My preference is localised administration, think Athenian democracy. I believe a system of localised consent empowers people to confront and solve issues head on. Who knows, it may even set an example

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thc0655
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It's not just bankers who have become unaccountable

It's not just bankers and police who have become unaccountable.  1,400 girls (mostly white) are sexually assaulted in a small British town and neither the police nor the politicians do anything.

http://pjmedia.com/richardfernandez/2014/08/27/rotherham-england/

Tom

"Welcome to the Hunger Games! And may the odds be ever in your favor."

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ommm
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Time2help

Time2help wrote:

jennifersam07 wrote:

Is this a joke?

Great quote!

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jennifersam07
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Voltaire was also anti-Semitic

http://www.nytimes.com/1990/09/30/books/l-voltaire-and-the-jews-590990.html

Seriously, individuals, industries, companies, nations may do evil, usually motivated by greed or hate, but entire classes of humans defined only by their religious affiliation cannot be condemned as evil.

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ommm
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Moses was also anti-semitic

jennifersam07 wrote:

http://www.nytimes.com/1990/09/30/books/l-voltaire-and-the-jews-590990.html

Seriously, individuals, industries, companies, nations may do evil, usually motivated by greed or hate, but entire classes of humans defined only by their religious affiliation cannot be condemned as evil.

At least according to this author writing on the issue of anti-semitism.

http://muzzlewatch.com/2007/02/07/moses-the-first-jewish-anti-semite-or-...

Who would have thunk?

At least Voltaire had a good quote.  According to Gold Meir, Moses led the Israelites around the desert for 40 years and then brought them to the one spot in the Middle East that didn't have any oil.  Bummer.

All that work and he still wasn't appreciated.  Must have been his anti-semitic rhetoric.

My suspicions are that everyone might, sooner or later, be considered anti-semitic if the situation calls for it since Jews and Arabs are both Semitic and the globe seems to be somewhat divided between those that support one group and those that support the other.

Now, all that aside, can we get back on topic?

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debu
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Voltaire was also anti-Semitic!!??

So the goyim are no longer permitted to quote Voltaire now?

A little less gatekeeping, please, jennifersam07 and a little more constructive commentary.

Anything to say about "Operation Protective Edge" I wonder?

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AKGrannyWGrit
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Speak Your Peace

Jennifersamo7, don't let the critics get to you, this site needs women who respectfully state their opinion!  There have been a number who have left so develop a thick skin, ignore the likes of, those who would silence you, and keep on posting.

AK Granny

Bankers Slave's picture
Bankers Slave
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Pouring some ointment on the wounds

We seem to be pitted against each other after allowing my posting to determine the direction of the debate. Just to be clear here I am only anti corruption, I do not hate.

It is a fact that there are a number of Jewish people in powerful positions that are at the pinnacle of economic and political corruption in the USA, not to mention what goes on in and around Gaza. In no way was I equating the 99.999% of the Jewish race with these power hungry psychopaths. 

I hope that clears up this misunderstanding that was caused by myself.

"They will never silence the voices of the voiceless"

Peace and love to all.

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jennifersam07
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Joined: Oct 14 2012
Posts: 105
Thanks AKGrannyWGrit

I'm a pretty tough old bird. Raised 10 kids and spent my career in the electronics industry where there are more misogynists than most places. Haha.

jennifersam07's picture
jennifersam07
Status: Silver Member (Offline)
Joined: Oct 14 2012
Posts: 105
And peace to you as well

But surely there are also Episcopalians equally corrupt, so why couple the religious affiliation with the corruption at all? It just seems irrelevant to mention it to me. Respectfully submitted.

Bankers Slave's picture
Bankers Slave
Status: Gold Member (Offline)
Joined: Jul 26 2012
Posts: 464
Respectfully accepted.

Yes there is corruption from all religious affiliates, you will find no argument from me there. The Tallestmanonearth nailed that one nicely.

With all due respect, my last post was as clear as I could make it. I hope you can accept that, there was nothing in it to target you personally, if there had been, I am sure I would have been unable to make this post by now.

Lets just keep up the bankster bashing! angry

Bankers Slave's picture
Bankers Slave
Status: Gold Member (Offline)
Joined: Jul 26 2012
Posts: 464
Just for laughs

Time2help's picture
Time2help
Status: Diamond Member (Offline)
Joined: Jun 9 2011
Posts: 2178
Painting a Mural

Michael_Rudmin's picture
Michael_Rudmin
Status: Platinum Member (Offline)
Joined: Jun 25 2014
Posts: 613
Two things

First, I sincerely hope the pitchforks DON'T come out. If they do, their bearers are likely to be slaughtered; Assad is not the only despot who will kill his people if his position is at risk. And more, because even when successful, pitchforks only lead to worse destruction. If you want to build the nation, look to Isaiah 58. Keep good faith; give charitably to the poor; and so on. But if you are continually weaving webs, hatching scorpion's eggs, plotting plots, do not be surprised if justice stands afar off (Isaiah 59).

Second, you asked 'when the bond market crashes, who will lose?' and then answered it by saying that the final bondholders will lose. That is not correct; if the final bondholders are the powerful, they will find a way to transfer the losses off to the weak. TARP should have shown you that. The answer, then, is that the weak will lose.

Time2help's picture
Time2help
Status: Diamond Member (Offline)
Joined: Jun 9 2011
Posts: 2178
Keep good faith

Michael_Rudmin wrote:
First, I sincerely hope the pitchforks DON'T come out. If they do, their bearers are likely to be slaughtered; Assad is not the only despot who will kill his people if his position is at risk. And more, because even when successful, pitchforks only lead to worse destruction. If you want to build the nation, look to Isaiah 58. Keep good faith; give charitably to the poor; and so on. But if you are continually weaving webs, hatching scorpion's eggs, plotting plots, do not be surprised if justice stands afar off (Isaiah 59). Second, you asked 'when the bond market crashes, who will lose?' and then answered it by saying that the final bondholders will lose. That is not correct; if the final bondholders are the powerful, they will find a way to transfer the losses off to the weak. TARP should have shown you that. The answer, then, is that the weak will lose.

Choose Love.

Bankers Slave's picture
Bankers Slave
Status: Gold Member (Offline)
Joined: Jul 26 2012
Posts: 464
Choose Life....maybe not this one though!

Bankers Slave's picture
Bankers Slave
Status: Gold Member (Offline)
Joined: Jul 26 2012
Posts: 464
The bankster thieves... 42 mins onwards, a worthy watch!

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