Macro Analytics                                                                                                           ...
Macro Analytics                                                                                                           ...
Macro Analytics                                                                                                           ...
When Leverage Fails!          4
WHEN LEVERAGE FAILS“There is no means of avoiding the final collapse of aboom brought about by credit expansion.          ...
WHEN LEVERAGE FAILS6
WHEN LEVERAGE FAILS7
WHEN LEVERAGE FAILS8
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WHEN LEVERAGE FAILS11
WHEN LEVERAGE FAILS12
WHEN LEVERAGE FAILS13
WHEN LEVERAGE FAILS14
WHEN LEVERAGE FAILS“There is no means of avoiding the final collapse of aboom brought about by credit expansion.          ...
WHEN LEVERAGE FAILS16
WHEN LEVERAGE FAILS                                         CONSOLIDATED Balance SheetTotal Balance Sheet: Assets = $21.03...
WHEN LEVERAGE FAILSECB Definition    Recognition of assets and liabilities    “An asset or liability is only recognized in...
WHEN LEVERAGE FAILS19
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WHEN LEVERAGE FAILSLeverage is now UNLIMITED      “If the outlook for the labor market does not improve substantially, the...
 When the United States closed the gold window at Bretton  woods II in August 1971 the age of unlimited leverage and  Pon...
WHEN LEVERAGE FAILS25
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WHEN LEVERAGE FAILS27
WHEN LEVERAGE FAILSUnwilling or unable to meet the world’s central banks’ DEMANDS for thegold that backed the dollar, Nixo...
DISCLOSURE STATEMENT AND TERMS OF USETHE CONTENT OF THIS SLIDE PRESENTATION AND ITS ACCOMPANYING RECORDED AUDIO DISCUSSION...
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Macro Analytics - 10-13-12 WHEN LEVERAGE FAILS - Part I

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Excessive use of Leverage has brought the world to the financial abyss. Untested Monetary Policies by Global Central Banks have heralded in a world of Mispricing and Malinvestment, where financial markets have disconnected from the real economy and the productive use of capital.

Our forefathers warned us of this and Ludwig von Mises spelled it out that "there is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved".

Ty Andros and Gordon T Long discuss how we have reached the point where, just as the Fed could never again substantially shrink its balance sheet after 2008, it now, along with the ECB, BOJ and BOE, will never be able to stop the flow of printing without destroying the economy.

This two part series walks the listener through how this has come to be, where it is leading, what should have been done earlier and the likely outcomes that are ahead.

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  • We are firmly in the total catastrophe of the currency and financial systems of the developed world, this is a battle between goliaths, it is King Kong (mother nature and Darwin) versus Godzilla (the most powerful public serpents and central bankers). The struggle will be enormous, with rallies in economies like we have just witnessed but in the end like King Canute the tide will engulf the elites. My bet is on mother nature, as she has fought hundreds of battles in history and has never in the long run been defeated by MEN, not once.Keep in mind - All FIAT currency and credit-based financial systems die in waves of insolvency and this is the greatest episode of this nature in history… The depression will be equally as big…*****************
  • Paper is POISON; you cannot store wealth in paper until the collapse has happened and reserve backed money comes back in some form.Bonds are the EPICENTER of the unfolding crisis, then it will move to fiat currencies as they are BONDS as well.G7* SOVEREIGN ALCHEMY WILL FAIL!Just as it has every single time in history, WITHOUT EXCEPTION. There are hundreds of examples never a different outcome. The worst of this depression lies ahead, plan properly and get rich.Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.” -- Friedrich NietzcheNow let me conclude the economic portion of this presentation by informing you that You all live in the matrix and my name is NEO, now lets go to some of the solutions.**************************
  • Paper is POISON; you cannot store wealth in paper until the collapse has happened and reserve backed money comes back in some form.Bonds are the EPICENTER of the unfolding crisis, then it will move to fiat currencies as they are BONDS as well.G7* SOVEREIGN ALCHEMY WILL FAIL!Just as it has every single time in history, WITHOUT EXCEPTION. There are hundreds of examples never a different outcome. The worst of this depression lies ahead, plan properly and get rich.Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.” -- Friedrich NietzcheNow let me conclude the economic portion of this presentation by informing you that You all live in the matrix and my name is NEO, now lets go to some of the solutions.**************************
  • Paper is POISON; you cannot store wealth in paper until the collapse has happened and reserve backed money comes back in some form.Bonds are the EPICENTER of the unfolding crisis, then it will move to fiat currencies as they are BONDS as well.G7* SOVEREIGN ALCHEMY WILL FAIL!Just as it has every single time in history, WITHOUT EXCEPTION. There are hundreds of examples never a different outcome. The worst of this depression lies ahead, plan properly and get rich.Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.” -- Friedrich NietzcheNow let me conclude the economic portion of this presentation by informing you that You all live in the matrix and my name is NEO, now lets go to some of the solutions.**************************
  • Paper is POISON; you cannot store wealth in paper until the collapse has happened and reserve backed money comes back in some form.Bonds are the EPICENTER of the unfolding crisis, then it will move to fiat currencies as they are BONDS as well.G7* SOVEREIGN ALCHEMY WILL FAIL!Just as it has every single time in history, WITHOUT EXCEPTION. There are hundreds of examples never a different outcome. The worst of this depression lies ahead, plan properly and get rich.Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.” -- Friedrich NietzcheNow let me conclude the economic portion of this presentation by informing you that You all live in the matrix and my name is NEO, now lets go to some of the solutions.**************************
  • Paper is POISON; you cannot store wealth in paper until the collapse has happened and reserve backed money comes back in some form.Bonds are the EPICENTER of the unfolding crisis, then it will move to fiat currencies as they are BONDS as well.G7* SOVEREIGN ALCHEMY WILL FAIL!Just as it has every single time in history, WITHOUT EXCEPTION. There are hundreds of examples never a different outcome. The worst of this depression lies ahead, plan properly and get rich.Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.” -- Friedrich NietzcheNow let me conclude the economic portion of this presentation by informing you that You all live in the matrix and my name is NEO, now lets go to some of the solutions.**************************
  • Paper is POISON; you cannot store wealth in paper until the collapse has happened and reserve backed money comes back in some form.Bonds are the EPICENTER of the unfolding crisis, then it will move to fiat currencies as they are BONDS as well.G7* SOVEREIGN ALCHEMY WILL FAIL!Just as it has every single time in history, WITHOUT EXCEPTION. There are hundreds of examples never a different outcome. The worst of this depression lies ahead, plan properly and get rich.Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.” -- Friedrich NietzcheNow let me conclude the economic portion of this presentation by informing you that You all live in the matrix and my name is NEO, now lets go to some of the solutions.**************************
  • Paper is POISON; you cannot store wealth in paper until the collapse has happened and reserve backed money comes back in some form.Bonds are the EPICENTER of the unfolding crisis, then it will move to fiat currencies as they are BONDS as well.G7* SOVEREIGN ALCHEMY WILL FAIL!Just as it has every single time in history, WITHOUT EXCEPTION. There are hundreds of examples never a different outcome. The worst of this depression lies ahead, plan properly and get rich.Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.” -- Friedrich NietzcheNow let me conclude the economic portion of this presentation by informing you that You all live in the matrix and my name is NEO, now lets go to some of the solutions.**************************
  • Paper is POISON; you cannot store wealth in paper until the collapse has happened and reserve backed money comes back in some form.Bonds are the EPICENTER of the unfolding crisis, then it will move to fiat currencies as they are BONDS as well.G7* SOVEREIGN ALCHEMY WILL FAIL!Just as it has every single time in history, WITHOUT EXCEPTION. There are hundreds of examples never a different outcome. The worst of this depression lies ahead, plan properly and get rich.Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.” -- Friedrich NietzcheNow let me conclude the economic portion of this presentation by informing you that You all live in the matrix and my name is NEO, now lets go to some of the solutions.**************************
  • Paper is POISON; you cannot store wealth in paper until the collapse has happened and reserve backed money comes back in some form.Bonds are the EPICENTER of the unfolding crisis, then it will move to fiat currencies as they are BONDS as well.G7* SOVEREIGN ALCHEMY WILL FAIL!Just as it has every single time in history, WITHOUT EXCEPTION. There are hundreds of examples never a different outcome. The worst of this depression lies ahead, plan properly and get rich.Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.” -- Friedrich NietzcheNow let me conclude the economic portion of this presentation by informing you that You all live in the matrix and my name is NEO, now lets go to some of the solutions.**************************
  • We are firmly in the total catastrophe of the currency and financial systems of the developed world, this is a battle between goliaths, it is King Kong (mother nature and Darwin) versus Godzilla (the most powerful public serpents and central bankers). The struggle will be enormous, with rallies in economies like we have just witnessed but in the end like King Canute the tide will engulf the elites. My bet is on mother nature, as she has fought hundreds of battles in history and has never in the long run been defeated by MEN, not once.Keep in mind - All FIAT currency and credit-based financial systems die in waves of insolvency and this is the greatest episode of this nature in history… The depression will be equally as big…*****************
  • Paper is POISON; you cannot store wealth in paper until the collapse has happened and reserve backed money comes back in some form.Bonds are the EPICENTER of the unfolding crisis, then it will move to fiat currencies as they are BONDS as well.G7* SOVEREIGN ALCHEMY WILL FAIL!Just as it has every single time in history, WITHOUT EXCEPTION. There are hundreds of examples never a different outcome. The worst of this depression lies ahead, plan properly and get rich.Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.” -- Friedrich NietzcheNow let me conclude the economic portion of this presentation by informing you that You all live in the matrix and my name is NEO, now lets go to some of the solutions.**************************
  • Paper is POISON; you cannot store wealth in paper until the collapse has happened and reserve backed money comes back in some form.Bonds are the EPICENTER of the unfolding crisis, then it will move to fiat currencies as they are BONDS as well.G7* SOVEREIGN ALCHEMY WILL FAIL!Just as it has every single time in history, WITHOUT EXCEPTION. There are hundreds of examples never a different outcome. The worst of this depression lies ahead, plan properly and get rich.Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.” -- Friedrich NietzcheNow let me conclude the economic portion of this presentation by informing you that You all live in the matrix and my name is NEO, now lets go to some of the solutions.**************************
  • Paper is POISON; you cannot store wealth in paper until the collapse has happened and reserve backed money comes back in some form.Bonds are the EPICENTER of the unfolding crisis, then it will move to fiat currencies as they are BONDS as well.G7* SOVEREIGN ALCHEMY WILL FAIL!Just as it has every single time in history, WITHOUT EXCEPTION. There are hundreds of examples never a different outcome. The worst of this depression lies ahead, plan properly and get rich.Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.” -- Friedrich NietzcheNow let me conclude the economic portion of this presentation by informing you that You all live in the matrix and my name is NEO, now lets go to some of the solutions.**************************
  • Paper is POISON; you cannot store wealth in paper until the collapse has happened and reserve backed money comes back in some form.Bonds are the EPICENTER of the unfolding crisis, then it will move to fiat currencies as they are BONDS as well.G7* SOVEREIGN ALCHEMY WILL FAIL!Just as it has every single time in history, WITHOUT EXCEPTION. There are hundreds of examples never a different outcome. The worst of this depression lies ahead, plan properly and get rich.Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.” -- Friedrich NietzcheNow let me conclude the economic portion of this presentation by informing you that You all live in the matrix and my name is NEO, now lets go to some of the solutions.**************************
  • Paper is POISON; you cannot store wealth in paper until the collapse has happened and reserve backed money comes back in some form.Bonds are the EPICENTER of the unfolding crisis, then it will move to fiat currencies as they are BONDS as well.G7* SOVEREIGN ALCHEMY WILL FAIL!Just as it has every single time in history, WITHOUT EXCEPTION. There are hundreds of examples never a different outcome. The worst of this depression lies ahead, plan properly and get rich.Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.” -- Friedrich NietzcheNow let me conclude the economic portion of this presentation by informing you that You all live in the matrix and my name is NEO, now lets go to some of the solutions.**************************
  • Paper is POISON; you cannot store wealth in paper until the collapse has happened and reserve backed money comes back in some form.Bonds are the EPICENTER of the unfolding crisis, then it will move to fiat currencies as they are BONDS as well.G7* SOVEREIGN ALCHEMY WILL FAIL!Just as it has every single time in history, WITHOUT EXCEPTION. There are hundreds of examples never a different outcome. The worst of this depression lies ahead, plan properly and get rich.Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.” -- Friedrich NietzcheNow let me conclude the economic portion of this presentation by informing you that You all live in the matrix and my name is NEO, now lets go to some of the solutions.**************************
  • Paper is POISON; you cannot store wealth in paper until the collapse has happened and reserve backed money comes back in some form.Bonds are the EPICENTER of the unfolding crisis, then it will move to fiat currencies as they are BONDS as well.G7* SOVEREIGN ALCHEMY WILL FAIL!Just as it has every single time in history, WITHOUT EXCEPTION. There are hundreds of examples never a different outcome. The worst of this depression lies ahead, plan properly and get rich.Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.” -- Friedrich NietzcheNow let me conclude the economic portion of this presentation by informing you that You all live in the matrix and my name is NEO, now lets go to some of the solutions.**************************
  • Paper is POISON; you cannot store wealth in paper until the collapse has happened and reserve backed money comes back in some form.Bonds are the EPICENTER of the unfolding crisis, then it will move to fiat currencies as they are BONDS as well.G7* SOVEREIGN ALCHEMY WILL FAIL!Just as it has every single time in history, WITHOUT EXCEPTION. There are hundreds of examples never a different outcome. The worst of this depression lies ahead, plan properly and get rich.Insanity in individuals is something rare – but in groups, parties, nations and epochs, it is the rule.” -- Friedrich NietzcheNow let me conclude the economic portion of this presentation by informing you that You all live in the matrix and my name is NEO, now lets go to some of the solutions.**************************
  • An example of real money is a silver dollar; in 1965, when us dollars where still backed by gold and silver, you could exchange a paper dollar for a silver dollar. At the time you could buy 5 gallons of gas or 4 loaves of bread in exchange for the paper or silver dollar…today that same silver dollar buys 10 gallons of gas or 10 loaves of bread. Real money buys approximately the same amount of goods and services tomorrow as it does today.When the dollar was backed by gold and silver it was REAL money. Gold and silver is timeless pure wealth. It hasn't been produced by any bank, corporation or printing press, thus gold doesn't have a counter-party, nor does it need one. Gold can't be devalued or thrust into bankruptcy. Paper money backed by gold or silver is what is called SOUND money. It resists debasement. This is the fact that gold-haters seem incapable of understanding. Of course they hate gold because it CAN’T be printed out of THIN Air and unmasks the government and central bank fraud that FIAT money really is. Thus, it is a reliable store of value and unit account for the exchange of goods and services in trade. And has been REAL money for thousands of years.******************
  • Macro Analytics - 10-13-12 WHEN LEVERAGE FAILS - Part I

    1. 1. Macro Analytics October 13th, 2012 WHEN LEVERAGE FAILS Listen to the original podcast for this slide at www.GordonTLong.com/Macro_Analytics 1The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
    2. 2. Macro Analytics October 13th, 2012 WHEN LEVERAGE FAILS Gordon T Long GordonTLong.com Listen to the original podcast for this slide at www.GordonTLong.com/Macro_Analytics 2The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
    3. 3. Macro Analytics October 13th, 2012 WHEN LEVERAGE FAILS Ty Andros Tedbits.com Traderview.com Listen to the original podcast for this slide at www.GordonTLong.com/Macro_Analytics 3The content of this slide should not be considered investment advice of any sort, nor should it be used to make investment decisions. Use of thisslide is considered to be your explicit acceptance of the Disclosure Statement and the Terms of Use found on the last page of this document.
    4. 4. When Leverage Fails! 4
    5. 5. WHEN LEVERAGE FAILS“There is no means of avoiding the final collapse of aboom brought about by credit expansion. Thealternative is only whether the crisis should come sooneras a result of a voluntary abandonment of further creditexpansion, or later as a final and total catastrophe of thecurrency system involved.” - Ludwig von Mises Ludwig von Mises We are in the latter; catastrophe looms All FIAT currency and credit-based financial systems die in waves of insolvency… 5
    6. 6. WHEN LEVERAGE FAILS6
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    15. 15. WHEN LEVERAGE FAILS“There is no means of avoiding the final collapse of aboom brought about by credit expansion. Thealternative is only whether the crisis should come sooneras a result of a voluntary abandonment of further creditexpansion, or later as a final and total catastrophe of thecurrency system involved.” - Ludwig von Mises Ludwig von Mises We are in the latter; catastrophe looms All FIAT currency and credit-based financial systems die in waves of insolvency… 15
    16. 16. WHEN LEVERAGE FAILS16
    17. 17. WHEN LEVERAGE FAILS CONSOLIDATED Balance SheetTotal Balance Sheet: Assets = $21.032 Trillion, Liabilities = $22.631 Trillion 17
    18. 18. WHEN LEVERAGE FAILSECB Definition Recognition of assets and liabilities “An asset or liability is only recognized in the Balance Sheet when it is probable that any associated future economic benefit will flow to or from the ECB, substantially all of the associated risks and rewards have been transferred to the ECB, and the cost or value of the asset or the amount of the obligation can be measured reliably.” 18
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    23. 23. WHEN LEVERAGE FAILSLeverage is now UNLIMITED “If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability.… “ Ben Bernanke FOMC September 2012 “It is impossible to overstate the importance of the above paragraph”.“Just as the Fed could never again substantially shrink its balance sheet after 2008,itnow will never be able to stop the flow of printing without destroying the economy.” Daniel Oliver, Myrmikan Capital, LLC doliver@myrmikan.com 23
    24. 24.  When the United States closed the gold window at Bretton woods II in August 1971 the age of unlimited leverage and Ponzi finance was born! This crisis is the unwinding of the boom created by unlimited credit expansion. The markets will clear 40 years of leverage and Ponzi finance in a short period of time. The opportunities are as enormous as the pitfall’s. 24
    25. 25. WHEN LEVERAGE FAILS25
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    27. 27. WHEN LEVERAGE FAILS27
    28. 28. WHEN LEVERAGE FAILSUnwilling or unable to meet the world’s central banks’ DEMANDS for thegold that backed the dollar, Nixon and the US Treasury DEFAULTED onthe promises of Bretton Woods I by removing the GOLD reserves thatbacked the world’s reserve currency and thereby converted thefunctions of the US dollar from: A medium of exchange A store of value A measure of value A standard of value No one else’s liability Moving purchasing power through time and spaceTo… 28
    29. 29. DISCLOSURE STATEMENT AND TERMS OF USETHE CONTENT OF THIS SLIDE PRESENTATION AND ITS ACCOMPANYING RECORDED AUDIO DISCUSSION AREINTENDED FOR EDUCATIONAL PURPOSES ONLY.This slide presentation and its accompanying recorded audio discussion are not a solicitation to trade or invest, andany analysis is the opinion of the author and is not to be used or relied upon as investment advice. Trading andinvesting can involve substantial risk of loss. Past performance is no guarantee of future returns/results. Commentaryis only the opinions of the authors and should not to be used for investment decisions. You must carefully examinethe risks associated with investing of any sort and whether investment programs are suitable for you. You shouldnever invest or consider investments without a complete set of disclosure documents, and should consider the risksprior to investing. This slide presentation and its accompanying recorded audio discussion are not in any way asubstitution for disclosure. Suitability of investing decisions rests solely with the investor. Your acknowledgement ofthis Disclosure and Term of Use Statement is a condition of access to it. Furthermore, any investments you may makeare your sole responsibility.THERE IS RISK OF LOSS IN TRADING AND INVESTING OF ANY KIND. PAST PERFORMANCE IS NOT INDICATIVE OFFUTURE RESULTS. Listen to the original podcast for this slide at www.GordonTLong.com/Macro_Analytics 29

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