TFMR Podcast #13 - The Straight Skinny from Gonzalo Lira


With everything in Europe seemingly coming to a head very soon, I thought it would be wise to ring up Gonzalo Lira, as he has a much better grasp of the situation than I.

In this podcast, I give Gonzalo free rein to go wherever he wants. Part of that was intentional; Turdites will recall that the Skype connection between Anytown, USA and Santiago, Chile is slow and creates a "delay" in the recording of the call. Part of it was intentional, though, as you all get plenty of my BS on a daily basis. I figured that if Gonzo was willing to give us the time, I might as well let him have the floor.

This call begins with a discussion of the mysterious trillions of bearer bonds rounded up today in Switzerland. From there, we discuss Europe and the eventual default of Greece and then conclude with some thoughts on Iran and the implications of the war that seems to be brewing.

If you enjoy this podcast, I would strongly you to consider becoming a subscriber at Gonzalo's website:

Membership has its benefits. Not only do you receive timely analysis but Gonzalo also he hosts instructive webinars for his clients about once per month.

The podcast runs a bit longer than usual at 50 minutes or so but, if you have the time over this 3-day weekend, I encourage you to listen to the entire thing.



The Doc
Feb 19, 2012 - 2:30pm

Great interview Turd, keep up

Great interview Turd, keep up the good work! Gonzalo's opinions have been interesting ever since reading his account of the Chilean hyperinflation.


Be Prepared
Feb 19, 2012 - 2:04pm

Turd - Break it down for us....

The ECB has just granted itself the power to declare any sovereign bond contract holder junior to whatever position it holds and may eliminate any provision that doesn't ensure that it gets every red cent back with interest.... period.

The question is how does the market digest this new paradigm? The markets are barely digesting the fact the JPM forever broke the futures market by declaring the "Rule of Law" doesn't apply to them. How is what the ECB doing any different? The Banks are openly and, without any concern, are clearly saying they rule the world and anything that doesn't serve their purposes is going to be changed and ignored at will.

Does the market wake up to this accelerated and overt stance by the banks? or the market so thinly traded between banking algos that it won't even blip?

Turd - How you do see it progressing from here? It seems that this would be US Treasures good..... Euro bonds bad..... Dollar up.... Euro down.... PMs down.... Equities denominated in Dollars up.... well.. you get the picture.... Any thought progression you might have would be helpful? Maybe put in your post tonight if you have time.. Thanks, my friend!

Feb 19, 2012 - 2:03pm

1934 bonds

I think it is safe to say, with all the info posted about these bonds on this forum, that:

1) they are no fakes, but in fact real

2) are somehow tied to gold, be it as payment, loan, insurance, or otherwise

3) there is a connection to the FED and China

Be Prepared
Feb 19, 2012 - 1:38pm
Feb 19, 2012 - 1:13pm

More on U.S. bonds...very interesting articles


The Stolen Treasures of Chinese Emporers: Golden Trust of Chiang Kai-shek

The article has a link to another website that describes a story (translated from German to English, so the grammar is poor in many areas but does not detract from the story) of a lawyer showing up representing a client who had in his possession 250 U.S. bonds from 1934 that are each of 100 million value that are worth 58 Billion w/ interest:

Arthur Heinrich Stern
Golden Trust of Chiang Kai-shek

Feb 19, 2012 - 1:02pm

Best Podcast from you

Your "new" method is very good to listen to. Way more natural etc. Good work Turd.

Feb 19, 2012 - 12:57pm


Germany drawing up plans for Greece to leave the euro

Plans for Greece to default, potentially leaving the euro, have been drafted in Germany as the European Union begins to face up to the fact that Greek debt is spiralling out of control - with or without a second bailout.

Image 1 of 2 Riot police chase away high-school students during an anti-austerity rally at central Syntagma square in Athens Photo: REUTERS

8:16PM GMT 18 Feb 2012


The German finance ministry is actively pushing for Greece to declare itself bankrupt and to agree a "haircut" on the bulk of its debts held by banks, a move that would be classed as a default by financial markets.

Eurozone finance ministers meet on Monday to approve the next tranche of loans from the EU and the International Monetary Fund, designed to stave off national bankruptcy while the new Greek government puts the country's finances in order.

But the severe austerity measures being demanded have caused such fury in Greece, and the cuts required are so deep, that Wolfgang Schäuble, the German finance minister, does not believe that any government would be able to implement them.

His pessimism has been tipped into despair with a secret European Commission, Central and IMF report that even if Greece made good on its promises, it would not be enough to reach the target of bringing total debt to 120 per cent of GDP by 2020.

"He just thinks the Greeks cannot do what needs to be done. And even if by some miracle they did what has been promised, he - and a growing group - are convinced it will not pull Greece out the hole," said a eurozone official.

Read more:

Feb 19, 2012 - 12:52pm
Feb 19, 2012 - 12:42pm



Good interview. For those that attack GL because he says the US is going to be a tough place to live, I strongly encourage you to look (historically) at both Germany and Argentina. It is what history teaches about empires! Very few have the imagination to see how different life can become. You must realize that we are very biased by our life experience in the U.S.

Check this out and draw your own conclusions...

Video unavailable

Replace Berlin with New York and Sex with Money. No censorship of public behavior= no law/regulation of business behavior. hmmm

very interesting video

silly humans.

MF Global update:

Up to 96% money restored. What crime? There wasn't any real money stolen. Come on now, be reasonable.

It is not as if the chairman of the National Futures Association is also the Chairman of the alleged criminal organization that stole the money... yup JP Morgan, Chairman of JPM Futures, one and the same guy....obviously no conflicts of interest.

In my post at the end of last year I said that somehow they would come up with the money, thereby eliminating damages, eliminating criminal accusations. They create money out of nothing anyway, why would this be different?? And look how they will be sticking it to all members for money that went to only one....good to be king. Amazing. Steal over one billion dollars. And no one gives a rip. Holder? Bueller? Buelller?

In 1920 Berlin the pleasure trade operated with impunity

In 2010 New York the money trade operated with impunity.

Any guesses on what the outcome will be this time? What nutjob is watching from the sidelines now, just seething, maybe in a jail like you know who, writing his version of how things should be...just waiting..Maybe jailed because OWS?

I'm not encouraging or advocating violence. What I am saying, is if you are working for the banks that run these schemes, wake up, get a new line of work. You might as well, since it is obvious the industry has to shrink dramatically. Blankfein? Plastic surgery and Bolivia? Good luck. I don't think you can get rid of that stank.

I'm just sayin'. Those psychopaths that feel that they can behave horribly, ruining 10's if not 100's of millions of peoples lives, just so they can move up the Forbes list a notch (as measured by Wiemar DM's) are going to get flamed badly. Not tomorrow. Not next week. Within 20 years for sure. 10? Maybe? It could be this year. Laugh if you want. History is your guide and argues strongly against the "it will all work out" crowd... Imagine how pissed government pensioners are going to be when they have worked 30 years and they get virtually nothing. "Burn it down" pissed. The dots will get connected. History folks. There is nothing new under the sun.

*HT Jesse on the graphic

Feb 19, 2012 - 12:28pm

Logic question?

'We would do better to try to find out where our ideas are wrong, rather than try to prove them correct!' said Popper

IMO everything over the last couple of weeks has been just noise MOPE, in order to confuse sheeple! Sticking to facts shows a somewhat different perspective on things.

Lease rate facts;

On comparing the lease rate charts to the price history of Silver, whilst the lease rate fell progressively thru Mar 11, bottoming at the end of Mar 11 (Ag 37.74 on 03/31/11), the price of Silver continued to increase until 04/25/11 (news of Osmin b's death a few days later causing the trigger to sell), by which time the lease rates had moved back to a positive reading!

In Sept 11 the lease rates bottomed mid month, on news of the Greek debt issues by coincidence 09/15/11 (Ag 39.80). The price did not fall however until after Bernanke's FOMC speech on the 09/21/11 (Ag 40.43), when 'he offered no plans to prop up the economy', leading to a big sell off immediately thereafter!

In early Dec11 the lease rates bottomed again, at around the time the whole of the EU was put on credit watch, but the price only started its big fall after the Fed speech on 12/13/11 'No more QE' (Ag 31.40)! By this time, the lease rates were once again recovering, with Silver not bottoming until 12/29/11!

If the Cartel intends to dump the price substantially at this point (ie Monday/Tuesday, then surely they are going to have to increase their naked shorts position even more, with the high risk factor that Iran/greece/Israel etc could completely negate their efforts, as would have appeared to have happened on at least two occasions in the last week! Based on their apparent efforts at shorting this week since Tuesday, they will have already substantially increased their shorts even more, so the question is why do they need to do it now?

If you wanted to predict how people would behave, Munger said, you only had to look at their incentives....

Questions = Are CDS payouts, in the event of a default, in anyway linked to the price of an underlying asset (ie the price of Gold or Silver)? If so, is there a time limit, or period, that the underlying asset price is based on (ie if Greece defaults in March, would the CDS insurance payout amount be based on the difference between the price of Silver now, and its price 12 months ago for instance)?

I don't pretend to fully understand CDS's, or how they are configured, though IMO, it would be pretty daft to agree a Euro loan, and then insure the payout, to also be in Euros in the event of a Euro default for instance.

So come on you clever guys, work out the relevance, and let us know!

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