John Taylor, Chief Investment Officer of FX Concepts, has been doing a lot of thinking about the economy lately and he keeps coming back to one thing– how similar things are to Europe just prior to World War II and how Bernanke’s actions are eerily reminiscent to those of Adolf Hitler. Sure, the facial hair is slightly different but other than that, Taylor says, “the parallels are ominous.” Really, it’s uncanny! If you aren’t lucky enough to be one of Taylor’s clients, who received the history lesson this morning, please join us as we take a gander at the outside the box “insight” some people apparently pay money to read.

Not too many traders remember ‘the phoney war,’ or the Sitzkrieg, as it happened 71 years ago. After Hitler invaded Poland on the first day of September 1939, Poland’s European allies France and England declared war on Germany, but nothing significant happened on that front until the following May when the German Army rolled through Luxembourg, the Netherlands, and Belgium and into France. Although the horror started in Poland in the fall of 1939, for a few months, the rest of Europe was spared that horror, which eventually lasted through the next five years. Strangely, this past September (2010), the US equity market rose by about 8.8%, its best return for that month, since that same September (1939). To me the parallels are ominous. What were those people thinking back in 1939? Could a coming world war have that positive an impact on the economy and on markets? They must have been crazy – of course equities gave up their gains and were cratered in May 1940 when Germany invaded the west. But, what are we thinking of now? A war has just begun. Didn’t Bernanke and the Fed announce in late August at Jackson Hole (and multiple times since then) that the US was going to enter QE2 and debase its currency setting off a currency war. Bernanke, like Hitler seven decades ago, had been warning everyone who would listen for years.

Stay tuned for upcoming reports in which we learn that Bernanke and Kim Jong-il were actually separated at birth.

Market Insight Report [PDF]

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Comments (63)

  1. Posted by Jewishguest | October 21, 2010 at 4:33 PM

    Why’s everyone always blame the Jews?

  2. Posted by Captain Bly (retired) | October 21, 2010 at 4:36 PM

    Not too many traders remember that September 19th is International Talk Like A Pirate Day.

    http://www.altiusdirectory.com/Society/2008/09/international-talk-like-pirate-day-19th.html

    EVENTS: International Talk Like a Pirate Day (19th September), History of International Talk Like a Pirate Day, Celebrations, Treasure Island
    International Talk Like a Pirate Day (ITLAPD) a parodic holiday is discovered in 1995 by Mark Summers and John Baur of Portland, Oregon, who declared 19th September each year seeing that the day when one and all in the globe must converse like a pirate. For instance, a viewer of this holiday would meet friends not with “Hello”, but also with “Ahoy, me hearty!” The vacation, and its celebration, spring from the romanticized sight of Golden Age of Piracy.

    To me, the parallels are ominous.

  3. Posted by Guest | October 21, 2010 at 4:41 PM

    In the words of Taleb, if you’re so rich, why aren’t you smarter? I guess some people get lucky.

  4. Posted by Guest | October 21, 2010 at 4:43 PM

    Wondering what Kim Jong-Il & Bernanke’s shoes sizes are…

  5. Posted by Guest | October 21, 2010 at 4:49 PM

    He disrespected those that fought in the war by making these allegations.

  6. Posted by Anonymous | October 21, 2010 at 4:50 PM

    The correlations are obvious. This guy is hired.

    -J.W. Merriwether

  7. Posted by Dr. Rosenrose | October 21, 2010 at 4:54 PM

    I was a Corporal in the Currency War, and I don’t feel disrespected.

  8. Posted by Guest | October 21, 2010 at 5:05 PM

    Neville Chamberlain = Geithner

  9. Posted by General Disarray | October 21, 2010 at 5:10 PM

    Is he implying that anti-semitism and bigotry are key upward drivers of market performance? Or that I should short the German Bund? I think the clear solution to all this is that the US Treasury should storm the beaches of Normandy.

  10. Posted by Pfluger the Barbarian | October 21, 2010 at 5:10 PM

    Comparing Bernanke, a jew, to Adolf Hitler, is the NKI.

  11. Posted by trojan | October 21, 2010 at 5:14 PM

    what a joke- the historic parallels to the 1912 US occupation of Nicaragua are so much more obvious

  12. Posted by buckettrader | October 21, 2010 at 5:17 PM

    Psst – Hitler was Jewish. Pass it on.

  13. Posted by OptionsTrader | October 21, 2010 at 5:28 PM

    Let all stop the sensationalism for a second and notice that he isn’t trying to say Hilter and Bernanke are the same guy. Just that their fiscal policies are similar.

    In other news, too bad for the bitch-ass NY Yankees they won’t even make it to play THE SAN FRANCISCO GIANTS in the World Series babyyyy. But then again what has New York ever accomplished besides overbearing leverage and good pizza.

  14. Posted by Rho2Gamma | October 21, 2010 at 5:28 PM

    More along the lines of Grenada.

  15. Posted by STAR | October 21, 2010 at 5:30 PM

    My grandmother was killed by a voltage surge in Queens. Sure I could blame Con Ed and draw modern day parallels saying it was a conspiracy, but I won’t and that’s why one day, machines will rule the earth.

  16. Posted by ExtraOrdinaryPopularDelusions | October 21, 2010 at 5:41 PM

    Are we talking the 1920s Hitler or the 1940s Hitler here? It’s an important distinction!

    Prescott Bush

  17. Posted by Guestarama | October 21, 2010 at 5:42 PM

    Hey – don’t shrug off the pizza. It’s big.

  18. Posted by Guest | October 21, 2010 at 5:42 PM
  19. Posted by OptionsTrader | October 21, 2010 at 5:45 PM

    True that. New York also has better looking girls and better bars…but DESPITE THAT

  20. Posted by meh | October 21, 2010 at 5:47 PM

    Don’t make me come over there…
    -Brandon Merriweather

  21. Posted by Anonymous | October 21, 2010 at 5:51 PM

    Paul von Hindenburg = Greenspan

  22. Posted by Guest | October 21, 2010 at 5:51 PM

    Don’t make ME come over THERE…
    – Floyd Mayweather

  23. Posted by neverwuzza | October 21, 2010 at 5:52 PM

    Economics is too important to be left to fund managers

    – Clemenza

  24. Posted by Guest | October 21, 2010 at 5:52 PM

    In this instance, would invading Poland be the old killing it?

  25. Posted by SHUTUP | October 21, 2010 at 5:52 PM

    I’m sure you’ve been a die-hard fan over the past 5 years going to 40 degree night games in mid-July to watch them lose. don’t forget that the SF Giants were once the New York Baseball Giants so shut your ingnorant mouth scumbag.

  26. Posted by Anonymous | October 21, 2010 at 6:01 PM

    Umm BL?

  27. Posted by ExtraOrdinaryPopularDelusions | October 21, 2010 at 6:04 PM

    Fuck the Yankees. Only in New York could someone throw more money than God at a problem and still end up worse than where they started.

    Only thing separating NY from Rome is that at least their sports teams had the balls to square off against lions instead a pack of underperforming crybabies.

  28. Posted by Anonymous | October 21, 2010 at 6:06 PM

    Wouldn’t throwing buckets of money out the window and getting nowhere be more applicable to the Mets than the Yankees? Just sayin’

  29. Posted by Guest | October 21, 2010 at 6:28 PM

    Leni Riefenstahl = Paul Krugman

  30. Posted by Guest | October 21, 2010 at 6:56 PM

    Christ killers

  31. Posted by Truthitude | October 21, 2010 at 7:34 PM

    Don’t forget most of the hot girls are imported…

  32. Posted by Dead_Cat | October 22, 2010 at 11:49 AM

    They don’t have oil and their air force is tiny.

  33. Posted by Dead_Cat | October 22, 2010 at 11:49 AM

    They don’t have oil and their air force is tiny.

  34. Posted by Dead_Cat | October 22, 2010 at 11:54 AM

    Well yeah but so is everyone in Manhattan, apart from a few trustafarians pretending to be artists.

  35. Posted by JustSayin | October 22, 2010 at 1:36 PM

    Based on that approach I find the parallels between the New York Yankees and Bernanke to be frightening.

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