On the Edge with Karl Denninger

On the Edge with Karl Denninger with predictions for 2012!

41 comments on “On the Edge with Karl Denninger
  1. F. Beard says:

    ”There’s no more money for free stuff” Karl Denninger

    You might as well be a gold-bug, Karl, since you think like one:

    Here’s how to bailout the entire population:

    1) Forbid the banks from anymore counterfeiting – so-called “credit creation”. This would be massively deflationary BY ITSELF as existing credit is paid off.

    2) Send equal bailout checks to the entire adult US population metered to just replace existing credit as it is paid off. Continue till all US private debt is paid off. Use US Notes for the bailout.

    Since the overall money supply (reserves + credit) would not change then neither price deflation nor price inflation should be expected.

    The long term solution is separate government and private money supplies as implied by Matthew 22:16-22.

    Steve Keen has also advocated a universal bailout, FYI.

  2. Al Kyder says:

    I will answer this fully on KR 230

    prognostication. LOLZ I’m shorting everything Carl touches.

    Carl was just parroting what he has heard from the Murdoch Press.

    This was a sad interview.

    The housing market in Oz topped out two years ago.

    My predictions for for pundits like Denninger and the USA.

    They will become irrelevant by this time next year. They will get almost no international air time, and the only time they get mentioned is when people are making jokes about Americans and their predictions.

    Even from a Washington Consensus POV, like Carl, people in the know about China would be chuckling.

    Wake up and smell the GAS Carl, China overtook Germany as Russia’s biggest trading partner two years ago.

    Well maybe you should stick your head back in the over, if you can afford the Gas Bill.

    In a survey by Price Waterhouse Coopers, Russian business leaders listed China as their number-one growth area.

    Medvedev “
Markets, he said, are like parachutes – they only work when they are open.”

    I think the children of Communism can teach Carl a lot about economic fundamentals.

    But hey, bring back American isolationism Please, please do.

  3. Al Kyder says:

    @ F.Beard. Matthew 22:16-22. :) I love the way that old book can throw up curve balls like that 2000 years down the track :) Thanks F.Beard Happy New Year.

  4. F. Beard says:

    I love the way that old book can throw up curve balls like that 2000 years down the track Al Kyder

    The Bible claims to be the LIVING word of God. I have found that to be true.

  5. F. Beard says:

    Oh, and Happy New Year to you too. It should be interesting. Maybe too much so.

  6. frances snoot says:

    Let’s face it. We need to get angry. We need to be angry. We need to focus our anger at those who are destroying our collective natural spaces for ridiculous past-times like protecting French nuclear hegemony. And we need to stand, collectively, in righteous indignation at the military industrial capital that wants to bring us all to the hell-hole of some little bathtub boy’s imaginative digress.

    Here. Happy New Year to the only One we can trust. Maxwell. And Stacy!!!

    http://www.youtube.com/watch?v=tlSZnY3OQCw

  7. frances snoot says:

    This is an intelligent sentence: “Wetlands are our most important piece of infrastructure”. Right?

  8. Jayme says:

    “Wetlands are our most important piece of infrastructure”

    Though I understand what this means, the idea of treating it as ‘ours’, like it was property, is perceptually inverted. We are only stewards, even of our own body.

  9. Necronomiconomics says:

    http://finance.yahoo.com/news/princeton-brews-trouble-us-1-000000782.html

    Princeton Brews Trouble for Us 1 Percenters: Michael Lewis

    By Michael Lewis | Bloomberg – Wed, Dec 28, 2011 7:00 PM EST
    To: The Upper Ones, From: The Strategy Committee, Re: The Alarming Behavior of College Students
    The committee has been reconvened in haste to respond to a disturbing new trend: the uprisings by students on elite college campuses.
    Across the Ivy League the young people whom our Wall Street division once subjugated with ease are becoming troublesome. Our good friends at Goldman Sachs, to cite one example, have been forced to cancel their recruiting trips to Harvard and Brown. At Princeton, 30 students masquerading as job applicants entered a pair of Wall Street informational sessions, asked many obnoxious questions (“How do I get a job lobbying the U.S. government to protect Wall Street interests?”), rose and chanted a list of charges at bankers from JPMorgan and Goldman Sachs, and, finally, posted videos of their outrageous behavior on YouTube.
    The committee views this latter incident as a sure sign of trouble to come. The whole point of going to Princeton for the past several decades has been to get a job at Goldman Sachs or, failing that, JPMorgan. That Princeton students are now identifying their interests with the Lower 99 percenters is, in its way, as ominous as the return of the Jews to Jerusalem.
    Having fully investigated the incidents in question, we are now prepared to offer strategic recommendations. Going forward all big Wall Street banks, when visiting college campuses, should adopt the following tactics.
    No. 1. Send only women. You may not have fully understood why you hired them in the first place, but now is their moment to shine. For some time now the standard recruiting mission has included at least one woman and one person of color, to “season” the sauce. But typically, in the interests of keeping it “real,” there has been on the scene at least one white male recruiter.
    Anyone who studies the Princeton-JPMorgan video will see that we can no longer afford to keep it real. The camera passes forgivingly over the JPMorgan women — the viewer feels sorry for them, for some reason — and comes to rest on the lone white Morgan man. The viewer doesn’t feel sorry for him. Get him out of there. Now.
    No. 2. Having identified your female employees, gather them together to explain that they have no obligation to justify your behavior, even to themselves. They shouldn’t give college students the satisfaction of thinking that you have devoted so much as a passing thought to the following subjects: Why it is OK for Wall Street banks to create securities designed to fail; why it is OK for them to game the ratings companies; why it is OK to get paid huge sums of money while working for companies rescued, and still implicitly backed, by the U.S. government; why it is OK to subvert attempts by politicians to reform the financial system?
    Avoid taking questions from college students. For that matter, avoid engaging them in substantive conversation of any sort. Your women need to shift the conversation from content to form. They must say things like, “I don’t mind what you are saying, I just mind how you are saying it.” And “I don’t understand why you can’t treat other people with respect.”
    They must cast themselves not as extensions of a global financial empire but as guests. Everyone at Princeton can agree that it is wrong to be rude to ladies on a visit.
    Happily, many Princeton students, hiding behind aliases, have already taken up this cry on campus websites. Encourage those who still want to work for big Wall Street banks to blog and post our new defense. Don’t offer jobs to these students who agree to help, however. They are better suited to being Wall Street customers than Wall Street bankers.
    No. 3. Focus on what actually angers these angry young people, rather than what they say angers them. The character of Princeton students didn’t change overnight; what changed is their circumstances. They think they are pissed off at us because of what we did. They are actually pissed off at us because we can no longer afford to hire them all. To that end …
    No. 4. Engage, quietly, with the ringleaders. Of course, all variations of the Occupy movement claim to be leaderless. We on the committee aren’t buying this. With the possible exception of Bank of America, there is no such thing as a leaderless organization, only organizations in which the leaders operate in the shadows.
    Sources inside inform us that one of the leaders of the Princeton-JPMorgan protest — the young man who led the so- called “mic check” — is a comparative literature major named Derek Gideon. Sources further indicate that for his senior thesis Mr. Gideon is writing — get this — a poem.
    This poem of his apparently leaves him with a great deal of time and energy to stir up trouble.
    “My goal is to change the dominant campus culture,” he has been quoted saying, “the culture that assumes that going to work for Goldman Sachs and JPMorgan is the most prestigious thing you can do, without having any critical sense of their current role in society. We’re very privileged to be here. We’re getting an incredible education. All just for us to be sending 30 percent, 40 percent of our graduates to the finance sector?”
    Unsurprisingly, Mr. Gideon doesn’t know precisely what he is going to do with his life after he graduates. This young man strikes the committee as an ideal candidate for a job at Goldman Sachs. Yes, in our experience, even the Gideons of this world can be persuaded. After all, what better way for him to improve our behavior than to become one of us? Put that way, he almost has an obligation to take his natural resting place among us.
    As awkward as it is to find ourselves in a war with students inside our own trade schools, we cannot simply cease to deal with them. After all, many are our own children. Disinheritance is messy. And, anyway, what’s the point of winning the estate-tax battle if we have no heirs?
    More important, the students at Ivy League schools are our most devastating ammunition in this looming cultural war. They show the Lower 99 that today’s economic inequality isn’t some horrible injustice but a financial expression of the natural order of man. The sort of people who become Upper Ones are inherently different from the sort of people who become Lower 99s. The clearest sign of this inherent difference is that we begin our adult life by getting into places like Princeton.
    Win the battle at Princeton and we might still win this war.
    (Michael Lewis, most recently author of “Boomerang: Travels in the New Third World,” is a columnist for Bloomberg News. The opinions expressed are his own.)
    To contact the writer of this article: Michael Lewis at mlewis1@bloomberg.net.

  10. frances snoot says:

    @Jayme
    I think, perhaps, the writer was speaking in the vernacular of the populace. Ours meaning hers.

  11. Eric says:

    Karl calls it – the borrowing by governments – the underlying sin at 8:00.

    Lets call it what it is, it is Original Sin. The folly is people flocking to treasury bonds, followed by idiotic evaluations about the significance of people flocking to or away from treasury bonds. I can’t think of anything more inane. Why would any government bother to issue bonds when its currency is fiat? Why would anyone go long a fiat currency unless the return matched inflation? The only suckers left buying into sovereign debt are banks that promise to buy them with zero interest loans from central banks.

    The only way that banks could cooperate with government deficit spending is to become accomplices in the crime of depreciating fiat currency. OWS has it wrong by a mile, they are protesting the wrong end of the shtick.

    BTW, Max, that interview with Karl was a great summary of the conventional wisdom of shadow economics for 2011.

  12. Jimbo says:

    The constitution does not give congress control over the money supply, it gives it the right to coin money. There is a difference. What we have at the moment is a government-issued currency which is used as the basis for a privately issued currency, which the fascists want to remove in the name of “freedom”. They have to lie to get their immoral ideas forced on the rest of us, because when people are told the truth they will reject the fiat-induced theft which these fascists desire.

    FBeard, you are one of them – a liar. When you claim the bible is the living word of a god we all know it to be a lie. Any analysis of the bible shows it is not true.

  13. F. Beard says:

    Why would any government bother to issue bonds when its currency is fiat? Eric

    To provide a risk-free return to the rich and the banks. Alexandre Hamilton called it (paraphrase) “binding the interests of the rich to the success of the US Government.”

    Why would anyone go long a fiat currency unless the return matched inflation? Eric

    Because the inflation numbers are cooked? Because bonuses are based on nominal, not real performance? Because government bonds are risk-free if the government can create the money the bonds are denominated in? Because the banks are afraid to lend into an economy they have wrecked?

    The only suckers left buying into sovereign debt are banks that promise to buy them with zero interest loans from central banks. Eric

    Yes, they are “suckers”, in the sense of being parasites. No one is entitled to a risk-free ROI at the expense of everyone else.

    The only way that banks could cooperate with government deficit spending is to become accomplices in the crime of depreciating fiat currency. Eric

    As long as interest must be paid for all new money created then those who lend the government its own money have a good chance of profiting from inflation.

  14. Robert Baird says:

    Mr Denningers predictions sound very similar to the ones he made around 2008 when the deleveraging of that time was going to lead to a great deflation and asset price collapse. It did not happen. As Eric Janszen says, no gold standard no deflation. Iam however very interested in his views on a trade war and would love to hear him debate Mish on the pros and cons of trade tarrifs etc.

  15. F. Beard says:

    The constitution does not give congress control over the money supply, it gives it the right to coin money. There is a difference. Jimbo

    Coin money = create money.

    What we have at the moment is a government-issued currency which is used as the basis for a privately issued currency, which the fascists want to remove in the name of “freedom”. Jimbo

    No. The true fascists are those who support a lender of last resort, government deposit insurance, government borrowing any other government privileges for the banks.

    They have to lie to get their immoral ideas forced on the rest of us, because when people are told the truth they will reject the fiat-induced theft which these fascists desire. Jimbo

    See folks? Jimbo, a supporter of banking, desires PMs as money. So how can PMs as money be a solution to banking? They aren’t. Bankers were very distressed when the US went off the gold standard. They won’t be sad if we go back on one.

    FBeard, you are one of them – a liar. When you claim the bible is the living word of a god we all know it to be a lie. Any analysis of the bible shows it is not true.
    Jimbo

    I suppose it is the prohibition on usury between fellow countrymen that offends you? But why? Common stock as a private money form allows any necessary consolidation of capital for economies of scale. Borrowing anyone else’s money is not necessary. Oops! There goes banker profits and control. So sad!

  16. RJ says:

    “Eric | January 1, 2012 at 11:45 am |

    Karl calls it – the borrowing by governments – the underlying sin at 8:00.

    Lets call it what it is, it is Original Sin.”

    And this is complete and utter garbage by Karl based on unbelievable ignorance of money and banking

    Govt debt is a financial liability. Always supported by a financial ASSET

    THE ONLY WAY WE CAN ALL COLLECTIVELY SAVE IS FOR THE GOVT TO RUN DEFICITS.

    Anyone anti Govt debt is anti non Govt financial assets (required for pension savings) and non Govt interest income

  17. RJ says:

    “Why would any government bother to issue bonds when its currency is fiat? Eric

    To provide a risk-free return to the rich and the banks. ”

    Wrong. Govt bonds provide an interest bearing asset to holders of money. Especially pension funds

    AND it is a means to stop monetary inflation

  18. frances snoot says:

    http://www.wussu.com/poems/agh.htm

    “What sphinx of cement and aluminium bashed open their skulls and ate up their brains and imagination?

    Moloch! Solitude! Filth! Ugliness! Ashcans and unobtainable dollars! Children screaming under the stairways! Boys sobbing in armies! Old men weeping in the parks!

    Moloch! Moloch! Nightmare of Moloch! Moloch the loveless! Mental Moloch! Moloch the heavy judger of men!

    Moloch the incomprehensible prison! Moloch the crossbone soulless jailhouse and Congress of sorrows! Moloch whose buildings are judgement! Moloch the vast stone of war! Moloch the stunned governments!

    Moloch whose mind is pure machinery! Moloch whose blood is running money! Moloch whose fingers are ten armies! Moloch whose breast is a cannibal dynamo! Moloch whose ear is a smoking tomb!

    Moloch whose eyes are a thousand blind windows! Moloch whose skyscrapers stand in the long streets like endless Jehovas! Moloch whose factories dream and choke in the fog! Moloch whose smokestacks and antennae crown the cities!

    Moloch whose love is endless oil and stone! Moloch whose soul is electricity and banks! Moloch whose poverty is the specter of genius! Moloch whose fate is a cloud of sexless hydrogen! Moloch whose name is the Mind!

    Moloch in whom I sit lonely! Moloch in whom I dream angels! Crazy in Moloch! Cocksucker in Moloch! Lacklove and manless in Moloch!

    Moloch who entered my soul early! Moloch in whom I am a consciousness without a body! Moloch who frightened me out of my natural ecstasy! Moloch whom I abandon! Wake up in Moloch! Light streaming out of the sky!

    Moloch! Moloch! Robot apartments! invisable suburbs! skeleton treasuries! blind capitals! demonic industries! spectral nations! invincible madhouses! granite cocks! monstrous bombs!

    They broke their backs lifting Moloch to Heaven! Pavements, trees, radios, tons! lifting the city to Heaven which exists and is everywhere about us!

    Visions! omens! hallucinations! miracles! ecstacies! gone down the American river!” (Allen Ginsberg)

    http://upload.wikimedia.org/wikipedia/commons/c/c9/Onthemorningthomas5.jpg

  19. F. Beard says:

    Govt bonds provide an interest bearing asset to holders of money. Especially pension funds

    Ah, using the old folks as a human shield for a fascist practice?

    Old folks are not any more entitled to a risk-free return at everyone else’s expense than any one else. If old people need money, then let’s just give it to them as needed. Let’s not pretend they are doing US a favor by getting a risk-free return for what a monetarily sovereign nation can create for itself, usury free.

    AND it [government borrowing] is a means to stop monetary inflation RJ

    Not so according to MMT. Risk-free government bonds are near perfect money substitutes so their issuance is merely an asset swap at best (Actually, they are slightly inflationary due to the interest that must be paid). If the Fed is the ultimate buyer, then government borrowing is equivalent to naked money printing.

  20. frances snoot says:

    The bride of Molech: endless oil.

  21. RJ says:

    Ah, using the old folks as a human shield for a fascist practice?

    Govt debt can set people free from debt slavery. And allow savings for old age. We need lots more Govt debt not less

  22. F. Beard says:

    Govt debt can set people free from debt slavery. RJ

    Sure – at the expense of others thereby enslaving them. Or if you are calling deficit spending without borrowing “debt” then I agree.

    And allow savings for old age. RJ

    People should be able to save but savings do not require usury.

    We need lots more Govt debt not less RJ

    Now you are conflating debt with usury. Fiat can be considered a form of debt but it certainly requires no usury. The government should simply deficit spend without borrowing.

    Summary: Government can and should deficit spend but without borrowing or usury.

  23. kdt says:

    @RJ | January 1, 2012 at 4:04 pm |

    “Eric | January 1, 2012 at 11:45 am |

    Karl calls it – the borrowing by governments – the underlying sin at 8:00.

    Lets call it what it is, it is Original Sin.”

    this is a bit like blameing the subprime browers for ansewring the phone saying”yes” as a greeting and geting a loan!! show me an instance of of a house fliper walking in to a bank with a base ball bat to get a loan and not geting arested. the same aplys here as far as i know no billion dollar loans are being coerced by thes browers in fact the behavior is exactly the same at micro as well as macro the first hit is always free to hook the adict then you ring them dry till they die it is not your fault you were doing faviors and providing a service. gag puke, give me a break! to top it off gov. is not a person and therfor cant sin by definition the fact these atributs are used absolves people like chenny ,bush ,oboma ,the congress critters ,holder, corzine,……… none of them personaly responsable to those harmed by there actions becaus of this idea that gov. , or inc. are some how aware and acting on there own .

  24. kdt says:

    @RJ………………………………………………… THE ONLY WAY WE CAN ALL COLLECTIVELY SAVE IS FOR THE GOVT TO RUN DEFICITS
    so there was no such thing as savings befor the guberment gave you money to have for your very own?? i can go chop down a tree process it into fuel or building matrials store them and this is “savings” same as jaring and canning your garden produse in both cases your acting as a BANK and yes you can lend real things and expect return in kind on the most basic level grain silos are the oldest form of bank we have, wich is why they were directly affected by MF Globals failure to maintain that fire wall!

  25. kdt says:

    @RJ | January 1, 2012 at 4:04 pm | sorry was not paying atention and pulled eric’s post out of yours! ops lol

  26. @Karl, Max, Stacy

    True to form, Libertarians continue to display their complete inability to grasp even the most BASIC political concepts. And, can’t name even one so-called extreme leftist in the USA. radical leftists want NO GOV’T Karl? huh!? whaaaat!?

    You know the global economic climate, there’s no doubt…..but when it comes to political ideologies? YOU ARE AS CLUELESS POLITICALLY AS OBAMA IS FINANCIALLY.

    next time you’re asked about political systems Karl, just say you don’t know. better to appear ignorant than open your mouth and remove all doubt.

  27. kdt says:

    @fbeard The long term solution is separate government and private money supplies as implied by Matthew 22:16-22.
    lol i havent read that pasage in full sence i was a kid as an adult i have to say, that interpritation is simplistic at best and could be read as “you have delt with them now they are your problem” he was no fan of the tempel money changers ether they were both exploiting the population in the same way at the same time wich was why rome ended up destroying the temple and exiling the “jews” only one protection racket per block and rome wanted that bolck

  28. F. Beard says:

    that interpritation is simplistic at best and could be read as “you have delt with them now they are your problem” kdt

    Paul confirms submission to government in Romans 13.

  29. kdt says:

    wage and eco pairity perfict way to put it and points to the fact that industrialation is its self a ponzi scheme henry ford HAD to rais the pay of his employees or he would have had no where near the customer base he needed ……….that is a ponzi right there

  30. febo says:

    How dare Denninger blank Ron Paul.
    Ron Paul IS the 3rd party.
    Sock Puppet of 2012 candidate #1, Karl – a lil bit of strong shit cut with THE crucial military financial complex anti-meme (aka “Ron Paul does not exist”) – Denninger.
    Denninger, you’ve been OUTED.

  31. kdt says:

    @fbeard i never said i agreed with every thing the man says just that he is on the right track his fixation on ayn rand is worrysome iv never read atlas shrugs but i did see her on donahue and did not like her stances on some isues, that said chioses are limited and action is now unavoidable the next prez will apoint a a large % of the judiciary so it is do or die time the checks will be messing with there ballences real push back will be possible or if not this will be a true tiping point as they are pushing to put a pro public disarmerment (gun control) bench in place this AFTER ADMITING THE WORST POSSIBLE THINGS ABOUT FAST AND FURIOUS are in fact true that they intended in part to use it to loby for disarming the public.

  32. kdt says:

    lol as far as bill still, he would be a great treasury secratery but as prez. the congress would eat him alive as a snack!! lame duck liver any one? carl is grown up enuff to know this, what is his game?? bill still is practicly indorsing ron paul from what i have seen: http://www.youtube.com/watch?v=VjGTaXhpObM

  33. febo says:

    Max and Stacey, can we have more appearances from
    Nicole Foss – she needs to be featured regularly because she is so utterly right and her rap should be spread to as many people as possible, as a public service.
    Ann Barhardt – she reduced Peter Schiff – Peter Schiff – to a cowering crouching position – he was literally trying to save his balls by the end of that interview. But you gotta let her do at least her MF Global rant – its a masterpiece of rhetoric of the kind the deep right seems to excel in every now and then.
    Jane Tavakoli – same kind of thing – some women defend the rules of the game so brilliantly.
    Micheal Hudson
    Lew Rockwell, of course
    Deek Jackson – maybe he could do a 2 min slot every week
    Pease also interview Eric King, from an Amsterdam Coffe Shop
    Could you also talk to Stefan Molyneaux about turning everyone off of whatever he says is alright, I mean, I like Libertarianism, but if he’s an example of what it would be like, well er

  34. kdt says:

    @F. Beard | January 1, 2012 at 8:20 pm |

    that interpritation is simplistic at best and could be read as “you have delt with them now they are your problem” kdt

    Paul confirms submission to government in Romans 13

    lol just re read that had the wrong paul going in my reply lmao

  35. febo says:

    I mean, cmon, isn’t the Iowa vote THE MOST EXCITING THING EVER?
    Ron Paul COULD WIN
    THAT COULD MARK THE BEGINING OF THE REVOLUTION you all somehow never get around to saying you want

  36. kdt says:

    @febo Could you also talk to Stefan Molyneaux about turning everyone off of whatever he says is alright, I mean, I like Libertarianism, but if he’s an example of what it would be like, well er

    this is some prety good reteric from your own self lol

  37. febo says:

    @kdt why thankyou, thankyou indeed

  38. Freemarkets says:

    RP will probably form 3rd party depending on how the votes are counted in secret??????
    Ticker didnt say to much about tensions in the middle east /hormuz. This will surely have a inflationary pressure in oil prices this year if the threats that are being made by US administration and others are carried out. It is likely that if attacked through seige/economically or militarily the Iranians will be able to close or severely disrupt the straight. Perhaps this strategy will help the west as a distraction from the ponzi which has stalled. This will give the banksters the option of blaming others for the the problems they have created – nothing like a good fog of war to lose things in! Will 2012 really be any different to any other year? More War – More lies from old status quo puppet politicians and on and on

  39. NoEffingWay says:

    Denninger may end up being correct about gold deflating along with the rest of the over leveraged markets, but I would expect that leverage (100 to 1 paper gold) to disappear also.

    http://www.youtube.com/watch?v=WCwWfSYBwOQ

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