View Full Version : The Death of the Petrodollar and Dollar as the Reserve Currency?
Are we witnessing history in the making and the final days, months, years of the dollar as the undisputed reserve currency? Are enough of the required ingredients in the mix right now to see some major countries take the chance and attempt a strategic push away from transactions in dollars?
There have been many interesting discussions spread throughout various threads at this site concerning this issue. There are many here with much more knowledge on this issue than myself and I’m grateful for the information they have passed along to allow me to begin to wrap my mind around this topic.
I was hoping to have a centralized area/thread to gather your perspectives, opinions and source information. With that said and…
With the current world situation seeing:
1. American debt exceeding $17 trillion and unfunded liabilities estimated over $128 trillion
- http://www.usdebtclock.org/
2. Weakening ties with Saudi Arabia
3. The Russian situation and accompanying sanctions
4. Russia beginning to develop its own unique transaction system
- http://www.zerohedge.com/news/2014-03-27/russia-create-own-national-payment-system-bid-reduce-dependence-west
"And as everybody knows, while the biggest trump card over the West Russia has are its energy exports, one can retort that Western leverage over Russia is in the form of SWIFT, or the "Society for Worldwide Interbank Financial Telecommunication", aka the umbrella framework for all interbank transactions taking place in a petrodollar world. If and when the day comes when Russia and/or China and/or India and/or any other BRICs and other nations who are tired of the hegemony of the fading US superpower, decide to create their own version of Swift, all bets on the reserve currency for the past century are off."
5. Growing ties in energy between Russia and China
- see post below
6. Countries around the world recalling their Gold and China purchasing enormous amounts of gold
- see post below
7. The emergence of BRICS
- http://en.wikipedia.org/wiki/BRICS
8. China and Germany Sign Yuan-Agreement Pact. Has Germany finally decided to begin the movement from the disaster of the EU and devaluation of Euro to alternate arrangements? Certainly America’s spying on Merkel and our economic health and foreign relations perception isn’t helping.
- http://www.zerohedge.com/news/2014-03-28/china-germany-sign-yuan-settlement-pact-and-obama-heads-saudi-arabia
Germany’s Bundesbank and the People’s Bank of China agreed to cooperate in the clearing and settling of payments in renminbi, paving the way for Frankfurt to corner a share of the offshore market.
The central banks signed a memorandum of understanding in Berlin today, when Chinese President Xi Jinping met German Chancellor Angela Merkel, the Frankfurt-based Bundesbank said in an e-mailed statement.
Germany’s financial capital prevailed over Paris and Luxembourg in a euro-area race to win trade in renminbi, which overtook the euro to become the second-most used currency in global trade finance in October, according to the Society for Worldwide Interbank Financial Telecommunication. The U.K. Treasury said on March 26 that the Bank of England would sign an initial agreement with the PBOC on March 31 to clear and settle yuan transactions in London.
“Frankfurt is one of Europe’s foremost financial centers and home to two central banks, making it a particularly suitable location,” said Joachim Nagel, a member of the Bundesbank’s executive board. “Renminbi clearing will strengthen the close economic and financial ties between Germany and the People’s Republic of China.”
http://www.zerohedge.com/contributed/2014-03-21/forget-russia-dumping-us-treasuries-%E2%80%A6-here%E2%80%99s-real-economic-threat
"Specifically, Sinclair says that if Russia accepts payment for oil and gas in any currency other than the dollar – whether it’s gold, the Euro, the Ruble, the Rupee, or anything else – then the U.S. petrodollar system will collapse:"
https://www.youtube.com/watch?v=KXGPzDq45gM#t=580
"Indeed, one of the main pillars for U.S. power is the petrodollar, and the U.S. is desperate for the dollar to maintain reserve status. Some wise commentators have argued that recent U.S. wars have really been about keeping the rest of the world on the petrodollar standard.
The theory is that – after Nixon took the U.S. off the gold standard, which had made the dollar the world’s reserve currency – America salvaged that role by adopting the petrodollar. Specifically, the U.S. and Saudi Arabia agreed that all oil and gas would be priced in dollars, so the rest of the world had to use dollars for most transactions.
But Reuters notes that Russia may be mere months away from signing a bilateral trade deal with China, where China would buy huge quantities of Russian oil and gas."
[/I]
But Reuters notes that Russia may be mere months away from signing a bilateral trade deal with China, where China would buy huge quantities of Russian oil and gas."
Reuters link on trade agreement:
http://www.reuters.com/article/2014/03/21/us-ukraine-crisis-russia-insight-idUSBREA2K07S20140321
"The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West."
"However, China overtook Germany as Russia's biggest buyer of crude oil this year thanks to Rosneft securing deals to boost eastward oil supplies via the East Siberia-Pacific Ocean pipeline and another crossing Kazakhstan."
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/03-overflow/20140322_gazprom_0.png
Why Did The Bundesbank Secretly Withdraw Two-Thirds Of Its London Gold?
http://www.zerohedge.com/news/2012-10-24/why-did-bundesbank-secretly-withdraw-two-thirds-its-london-gold
Today, in a surprising development, via the Telegraph we learn that none other than the same Bundesbank which is causing endless nightmares for all the other broke European nations due to its insistence for sound money, decided to voluntarily pull two thirds of its gold holdings held by the Bank of England. According to a confidential report referenced by the Telegraph, Buba reclaimed 940 tons, reducing its BOE holdings from 1,440 in 2000 to 500 in 2001 allegedly "because storage costs were too high." This is about as idiotic an excuse as the Fed cancelling its reporting of M3 in 2006 because "the costs of collecting the underlying data outweigh the benefits." So why did Buba repatriate its gold? Ambrose Evans-Pritchard has an idea.
The shift came as the euro was at its weakest, slumping to $0.84 against the dollar. But it also came as the Bank of England was selling off most of Britain's gold reserves – at market lows – on orders from Gordon Brown.
Peter Hambro, chair of the UK-listed gold miner Petropavlovsk, said the Bundesbank may have withdrawn its bullion in self-protection since it did not, apparently, have its own specifically allocated bars in London. "They may have decided that the Bank of England had lent out too much gold, and decided it was safer to bring theirs home. This is about the identification. Can you identify your own allocated gold, or are you just a general creditor with a metal account?"
The watchdog report follows claims by the German civic campaign group "Bring Back our Gold" and its US allies in the Gold Anti-Trust Committee that official data cannot be trusted. They allege central banks have loaned out or "sold short" much of their gold.
Unease about Germany's unchecked gold reserves
http://www.thenewstribune.com/2012/10/22/2340689/german-auditors-urge-controlling.html
The report says the gold bars "have never been physically checked by the Bundesbank itself or other independent auditors regarding their authenticity or weight." Instead, it relies on a "written confirmations by the storage sites."
The central bank said in a reaction to the report that was also sent to lawmakers Monday that it sees no reason for a physical inspection of the bars. "There is no doubt about the integrity of the foreign storage sites in this regard," it stated.
Given the growing political unease about the issue and the pressure from auditors, the central bank decided last month to repatriate some 50 tons of gold in each of the three coming years from New York to its headquarters in Frankfurt for "thorough examinations" regarding weight and quality, the report revealed.
Hong Kong recalls its gold reserves from UK | Follows Germanys and UAEs lead
http://goldsurvivalguide.co.nz/hong-kong-recalls-its-gold-reserves-from-uk-follows-germanys-and-uaes-%E2%80%8Elead%E2%80%8E/
“Central banks are increasingly aware of the importance of having gold reserves at time of financial crisis and having it easily available at their own disposal“.
This is just further evidence of lack of trust in the 2 major western financial centres – the USA and UK – particularly when it comes to gold. They have in the past been the centre of much discussion on the subject of gold leasing and gold price manipulation. A whole other subject in itself.
China is Quietly Becoming Gold Superpower - World’s Top Gold Producer Holding Onto All of Its Gold
http://www.washingtonsblog.com/2012/11/china-becoming-gold-superpower.html
http://goldbullionpurchaser.com/wp-includes/images/goldproduction2011.png
China is producing more gold than any other country, but isn’t exporting any of it. http://www.bloomberg.com/news/2012-04-05/top-10-gold-producing-countries-in-2011-table-.html
In addition, china is importing huge amounts of gold. http://www.zerohedge.com/news/name-new-reserve-currency-china-imports-more-gold-2012-all-ecb-holdings
As such, China is quietly becoming a gold superpower.
I think it is inevitable. We cannot control our spending and at some point other countries choose the next best option to the petrodollar. Of course mist other countries including China are spending horrendous debt as well. A bit if a race to the rocks at the bottom of the cliff but we all end up smashed on the rocks.
When power and control are threatened look for manipulation into world war or such.
I think it is inevitable. We cannot control our spending and at some point other countries choose the next best option to the petrodollar. Of course mist other countries including China are spending horrendous debt as well. A bit if a race to the rocks at the bottom of the cliff but we all end up smashed on the rocks.
When power and control are threatened look for manipulation into world war or such.
At least China is investing in infrastructure and buying gold. Our whole debt based monetary system is a sham. Fiat monetary systems ALWAYS collapse. Washington is trying to keep what we have afloat.
Moose-Knuckle
03-30-14, 02:34
Our whole debt based monetary system is a sham. Fiat monetary systems ALWAYS collapse.
The Federal Reserve, and it's master the central banks in Europe are nothing more than a giant Ponzi scheme that we are obligated to play a part in.
“When the President signs this act [Federal Reserve Act of 1913], the invisible government by the money power -- proven to exist by the Monetary Trust Investigation -- will be legalized. The new law will create inflation whenever the trusts want inflation. From now on, depressions will be scientifically created”. Charles A. Lindbergh Sr.
Moose-Knuckle
03-30-14, 02:36
Why Did The Bundesbank Secretly Withdraw Two-Thirds Of Its London Gold?
http://www.zerohedge.com/news/2012-10-24/why-did-bundesbank-secretly-withdraw-two-thirds-its-london-gold
Today, in a surprising development, via the Telegraph we learn that none other than the same Bundesbank which is causing endless nightmares for all the other broke European nations due to its insistence for sound money, decided to voluntarily pull two thirds of its gold holdings held by the Bank of England. According to a confidential report referenced by the Telegraph, Buba reclaimed 940 tons, reducing its BOE holdings from 1,440 in 2000 to 500 in 2001 allegedly "because storage costs were too high." This is about as idiotic an excuse as the Fed cancelling its reporting of M3 in 2006 because "the costs of collecting the underlying data outweigh the benefits." So why did Buba repatriate its gold? Ambrose Evans-Pritchard has an idea.
The shift came as the euro was at its weakest, slumping to $0.84 against the dollar. But it also came as the Bank of England was selling off most of Britain's gold reserves – at market lows – on orders from Gordon Brown.
Peter Hambro, chair of the UK-listed gold miner Petropavlovsk, said the Bundesbank may have withdrawn its bullion in self-protection since it did not, apparently, have its own specifically allocated bars in London. "They may have decided that the Bank of England had lent out too much gold, and decided it was safer to bring theirs home. This is about the identification. Can you identify your own allocated gold, or are you just a general creditor with a metal account?"
The watchdog report follows claims by the German civic campaign group "Bring Back our Gold" and its US allies in the Gold Anti-Trust Committee that official data cannot be trusted. They allege central banks have loaned out or "sold short" much of their gold.
Unease about Germany's unchecked gold reserves
http://www.thenewstribune.com/2012/10/22/2340689/german-auditors-urge-controlling.html
The report says the gold bars "have never been physically checked by the Bundesbank itself or other independent auditors regarding their authenticity or weight." Instead, it relies on a "written confirmations by the storage sites."
The central bank said in a reaction to the report that was also sent to lawmakers Monday that it sees no reason for a physical inspection of the bars. "There is no doubt about the integrity of the foreign storage sites in this regard," it stated.
Given the growing political unease about the issue and the pressure from auditors, the central bank decided last month to repatriate some 50 tons of gold in each of the three coming years from New York to its headquarters in Frankfurt for "thorough examinations" regarding weight and quality, the report revealed.
Hong Kong recalls its gold reserves from UK | Follows Germanys and UAEs lead
http://goldsurvivalguide.co.nz/hong-kong-recalls-its-gold-reserves-from-uk-follows-germanys-and-uaes-%E2%80%8Elead%E2%80%8E/
“Central banks are increasingly aware of the importance of having gold reserves at time of financial crisis and having it easily available at their own disposal“.
This is just further evidence of lack of trust in the 2 major western financial centres – the USA and UK – particularly when it comes to gold. They have in the past been the centre of much discussion on the subject of gold leasing and gold price manipulation. A whole other subject in itself.
Oh I'm sure it has NOTHING to do with tungsten filled "gold bars" surfacing the past few years.
Oh I'm sure it has NOTHING to do with tungsten filled "gold bars" surfacing the past few years.
Have they now invented "fiat gold?"
I bet when the crunch comes, countries are going to find all the gold supposedly held in central banks has vaporized. Anyone really believe central bankers are going to let anyone else have that gold that was in their possession?
The_War_Wagon
03-30-14, 06:01
Are we witnessing history in the making and the final days, months, years of the dollar as the undisputed reserve currency?
Yes. :eek:
Anyone interested may want to check out a article over at alt-market.com scroll down the page to see older articles.. Look for a article titled "The world holds a suicidal America hostage" from March 25, Read up on the "IMF 2010 Quota and Governance reforms" It's beginning to look like the game's up.
Crow Hunter
03-30-14, 08:27
I disagree with people leaving the "Petro dollar".
What else will they use?
Chinese yuan? Too much artificial government intervention, markets are not open, contracts/business interests are subject to serious government corruption
Russian ruble? Same as China without the manufacturing base/international trade
Indian Rupee? While they are a growing industrial country, with a fairly decent court/government system but their GDP is extremely low per capita (they have very little productivity reserves)
Swiss Frank? While they have good laws, good court/government, low corruption, their GDP is extremely small. They have very little industrial capacity/productivity capacity per capita
British pound? Although better, very much like Switzerland with an added significant social welfare drag
Euro? Now they have some chance of becoming a reserve currency. However, unlike the US which is a collection of states under a unified central government, the Eurozone is a collection of central governments that have agreed to use a single currency. It is an inherently less stable system that the United States, it has a patchwork of different laws/regulations and has significant internal issues with some "states" with significant socialist welfare states with very little "bench depth" of productivity/GDP per capita
That really only leaves the US with a currency that has a significant "full faith and credit" backing. The US has the most industrial capacity, the best contractual legal system, the most productive/innovative economy and the most stable government system in the world right now. "When the US sneezes, other countries get a cold." As long as this holds true, the other countries in the world will continue to hold US dollars as a reserve currency because the other options out there are so poor.
It is the same reason people want to hold gold when markets go down. Gold has very little useful intrinsic value other than the value that others put on it. You can eat it, you can't use it to wipe your ass, you can't build things out of it, etc. The world will continue to assign value to the US dollar as long as there isn't anything else out there that is the equivalent. Even if a consortium of enemies of the US say that they are no longer going to accept US dollars as currency, unless it is a huge bloc of countries, and they enforce it at the point of a gun, the very inertia that the US dollar has throughout the world will keep it in it's position for a while.
What alternative currency would you personally accept for your goods/services?
While I realize there are lots of proponents of a specie based economy on this board. (Gold, silver, something) That can and will result in a serious deflationary spiral. While that is a good thing for savers, it will destroy economic stability and growth in an economy and it is economic growth that drives innovation. Would you invest your gold pieces in a company to get a chance at a 7-10% return with a chance to lose money when you had a 3 to 5% or better guaranteed return on your gold pieces with no chance of losing value just storing them in jars in your back yard? What happens when everyone starts feeling this way? Where do companies get money to start up new companies, new ideas, new technologies?
With an fiat inflation based economy, if you don't invest your money in something that is giving you a return greater than inflation, you WILL lose purchasing power over time. This drive innovation because people invest in new ideas and new technologies in an effort to beat inflation. In a scarcity based economy, people will not invest because they make money just holding on to their cash as the economy expands and demand for the currency increases.
montanadave
03-30-14, 08:53
Being the world's reserve currency is not without its own perils. While it affords the United States a number of economic and political advantages, it has also permitted us to run up the deficits we now have hanging over our heads. I don't pretend to understand fully the complexities of the world's currency markets, but it seems like a system utilizing a "basket" of currencies might make more sense in that it would spread the advantages AND risks across a broader section of the global economy.
The sad thing is the founding fathers have foresaw many of the issues we are plagued with today.
http://educatorssite.com/?p=904
http://aldbook.wikispaces.com/Our+Founding+fathers,+and+others,+about+money+and+banking
http://www.foundingfatherquotes.com/father/id/6
http://www.washingtonsblog.com/2010/10/the-founding-fathers-vision-of-prosperity-has-been-destroyed.html
I hate to say it, but maybe the death will be a good thing and stop this globalization, one world government, blah blah crap we are heading into..
I disagree with people leaving the "Petro dollar".
What else will they use?
Chinese yuan? Too much artificial government intervention, markets are not open, contracts/business interests are subject to serious government corruption
Russian ruble? Same as China without the manufacturing base/international trade
Indian Rupee? While they are a growing industrial country, with a fairly decent court/government system but their GDP is extremely low per capita (they have very little productivity reserves)
Swiss Frank? While they have good laws, good court/government, low corruption, their GDP is extremely small. They have very little industrial capacity/productivity capacity per capita
British pound? Although better, very much like Switzerland with an added significant social welfare drag
Euro? Now they have some chance of becoming a reserve currency. However, unlike the US which is a collection of states under a unified central government, the Eurozone is a collection of central governments that have agreed to use a single currency. It is an inherently less stable system that the United States, it has a patchwork of different laws/regulations and has significant internal issues with some "states" with significant socialist welfare states with very little "bench depth" of productivity/GDP per capita
That really only leaves the US with a currency that has a significant "full faith and credit" backing. The US has the most industrial capacity, the best contractual legal system, the most productive/innovative economy and the most stable government system in the world right now. "When the US sneezes, other countries get a cold." As long as this holds true, the other countries in the world will continue to hold US dollars as a reserve currency because the other options out there are so poor.
It is the same reason people want to hold gold when markets go down. Gold has very little useful intrinsic value other than the value that others put on it. You can eat it, you can't use it to wipe your ass, you can't build things out of it, etc. The world will continue to assign value to the US dollar as long as there isn't anything else out there that is the equivalent. Even if a consortium of enemies of the US say that they are no longer going to accept US dollars as currency, unless it is a huge bloc of countries, and they enforce it at the point of a gun, the very inertia that the US dollar has throughout the world will keep it in it's position for a while.
What alternative currency would you personally accept for your goods/services?
While I realize there are lots of proponents of a specie based economy on this board. (Gold, silver, something) That can and will result in a serious deflationary spiral. While that is a good thing for savers, it will destroy economic stability and growth in an economy and it is economic growth that drives innovation. Would you invest your gold pieces in a company to get a chance at a 7-10% return with a chance to lose money when you had a 3 to 5% or better guaranteed return on your gold pieces with no chance of losing value just storing them in jars in your back yard? What happens when everyone starts feeling this way? Where do companies get money to start up new companies, new ideas, new technologies?
With an fiat inflation based economy, if you don't invest your money in something that is giving you a return greater than inflation, you WILL lose purchasing power over time. This drive innovation because people invest in new ideas and new technologies in an effort to beat inflation. In a scarcity based economy, people will not invest because they make money just holding on to their cash as the economy expands and demand for the currency increases.
Good post. The more I try and figure this out the more I realize the complexities in solving the problem.
Regarding, the truth of your bolded statement this is exactly how one can subtlety enslave entire societies. It becomes a continuous effort merely to stay afloat due to inflation. It becomes difficult to truly "drop out" of the rat race system.
Oh I'm sure it has NOTHING to do with tungsten filled "gold bars" surfacing the past few years.
Have they now invented "fiat gold?"
I bet when the crunch comes, countries are going to find all the gold supposedly held in central banks has vaporized. Anyone really believe central bankers are going to let anyone else have that gold that was in their possession?
Yep, the US and other countries have been carrying gold on their balance sheets even if they do not have physical possession (see below). Appears its getting harder and harder for the the manipulation and, likely absence, of material gold to be managed...
No wonder the calls for a physical audit of the nation's Gold reserves are continually shot down. Can you imagine the consequences if it is found we've used our Gold (for say black budget items) and have a mere fraction of stated amounts?
Senator Rand Paul: Audit The Fed
http://www.breitbart.com/Breitbart-TV/2014/01/15/Rand-Paul-Audit-The-Fed
I rise today in opposition to secrecy, in opposition to the veil of secrecy that cloaks the money changing hands in the temple of the Federal Reserve. While the money changes hands, the monied class gets richer and the middle class gets short-changed. It is more than time to part the curtain that hides the trillions of dollars that change hands. There is a revolving door from Wall Street to the Treasury to the Fed and back again. We have former Secretaries of the Treasury going from government to Wall Street and pocketing hundreds of millions of dollars.
I have called repeatedly for transparency at the Federal Reserve so Americans can see what is being done with their money supply. Every time I’ve called for transparency, people from both sides have said that transparency would only undermine the independence of the Federal Reserve. But Congress does have a role in overseeing the Fed. Congress created the Fed and right now independence has come to mean no oversight.
*****
The Emperor Has No Gold
http://www.washingtonsblog.com/2012/11/the-emperor-has-no-gold.html
*****
CNBC head editor John Carney is arguing that it doesn’t matter whether or not the Fed has the gold.
http://www.cnbc.com/id/49540593/The_Germans_Are_Coming_for_Their_Gold
Comments about Germany: The actual presence of the gold wouldn’t make a lick of difference unless, say, Germany’s central bank decided it wanted to start using the gold for some practical, non-monetary purpose like making watches.
This paranoia is not entirely irrational, for one reason. As I mentioned above, for almost all imaginable operational purposes, the actual existence of the gold in Fort Knox or in the vault beneath the FRBNY’s Liberty Street headquarters is irrelevant. The bookkeeping is what really matters here.
*****
Do Western Central Banks Have Any Gold Left???
http://sprottglobal.com/markets-at-a-glance/maag-article/?id=6590
Under current reporting guidelines, therefore, central banks are permitted to continue carrying the entry of physical gold on their balance sheet even if they’ve swapped it or lent it out entirely. You can see this in the way Western central banks refer to their gold reserves. The UK Government, for example, refers to its gold allocation as, “Gold (incl. gold swapped or on loan)”. That’s the verbatim phrase they use in their official statement. Same goes for the US Treasury and the ECB, which report their gold holdings as “Gold (including gold deposits and, if appropriate, gold swapped)” and “Gold (including gold deposits and gold swapped)”, respectively (see Chart B). Unfortunately, that’s as far as their description goes, as each institution does not break down what percentage of their stated gold reserves are held in physical, versus what percentage has been loaned out or swapped for something else. The fact that they do not differentiate between the two is astounding,
http://sprott.com/media/192423/chartb.gif.gif
I hate to say it, but maybe the death will be a good thing and stop this globalization, one world government, blah blah crap we are heading into..
Or spur it on... What will happen when the nation that supported the world's economy crumbles? Don't you think the world will cry that no single nation should every carry such economic weight and push for a unified system?
http://www.bloomberg.com/news/2013-02-10/putin-turns-black-gold-into-bullion-as-russia-out-buys-world.html
Keep hearing more and more about Russia's massive gold grab would like to do more research on it
Good argument why the US dollar us the inly logical choice for the world reserve currency and only currency oil is sold for.
Yet if it is so much better than any other alternative why did we feel compelled to make a devil's bargain with Saudia Arabia to make sure they commit to the petro dollar? Why do we shed our young mens' blood at the whim of the Saudi king? Why do feel compelled to bow before Chinese rulers? And nervously ask for an audience to keep them buying Treasuries?
Seems to me those are the actions of someone skating on thin ice trying to keep it together just a little longer but knowing it will not last.
Crow Hunter
03-31-14, 09:21
Good argument why the US dollar us the inly logical choice for the world reserve currency and only currency oil is sold for.
Yet if it is so much better than any other alternative why did we feel compelled to make a devil's bargain with Saudia Arabia to make sure they commit to the petro dollar? I don't think that bargain is for them to use the dollar. I think it is to keep the oil flowing to keep civil unrest from happening in the US and other Western countries Why do we shed our young mens' blood at the whim of the Saudi king? Same as above. To keep the oil flowing. While we don't get all of our oil from the Middle East, a disruption in supply drives up prices for all. High oil prices hurts our economy and causes voters to kick the administration in power out for years. The Energy Crises in the 1970s is one of the reasons the Republicans actually started to be something other than the minority party. Why do feel compelled to bow before Chinese rulers? And nervously ask for an audience to keep them buying Treasuries? Instead of oil, now it is cheap commercial goods. If there were a disruption in the stuff you could buy at Wal-mart or a cost increase due to the need to make them in the US or other first world country there would be nearly as bad of an uproar as having oil prices spike.
Seems to me those are the actions of someone skating on thin ice trying to keep it together just a little longer but knowing it will not last.
Mine in red.
I could very well be wrong. But I am making the bet that the US will lose prominence over time as other countries become more like the US in productivity and in their laws/regulations. I have a 50/50 split on US vs International equities vs the efficient frontier 30-40%.
That being said, I don't think that the US will collapse nor do I feel that the dollar will cease to be the reserve currency during my lifetime. The US is still, right now, the only option other than a commodity that everyone wants. But since those commodities are even less "controlled" than the US dollar. Can you imagine what it would be like trying to determine the "value" of something in barrels of oil with countries like Venezuela or Russia or Saudi Arabia playing with the standards by increasing or decreasing their output based on what they want to buy today and thereby deflating or inflating the world currency?
You think "trade wars" are bad now. Whew. ;)
At least now the US can be "relied upon" and the value of the Petro Dollar is relatively stable day to day and while the US can and is currently driving inflation, it doesn't abruptly reverse course on a monthly/weekly/daily cycle and it is controlled by a single entity vs a group of actors with dissimilar world views/goals.
But I am just an engineer who likes to invest. Not an economist or a prestidigitator.:dirol:
montanadave
03-31-14, 10:39
Nothing runs without energy. Look at a graph of energy consumption vs. GDP per capita. So having your fiat currency linked to oil actually makes more sense than linking it to gold. Hydrocarbon fuels are the heavy hitters in the energy business and that isn't likely to change anytime real soon. The United States, with all its faults, is still where people rushed to stash their money when the world's economy teetered on the edge of collapse in 2008.
So call me crazy, but I don't see any looming threat to the "petrodollar." The "photoyuan" or the "radiorupee" may be coming, but I'm not holding my breath.
If somehow the Dollar DID stop being the world's currency, it would spell disaster.
The real issue is perception. As long as there is no better, safer place, the dollar will stand. But spending like a drunk sailor and monitizing our nation's debt is a bad way to keep this perception going....
Will the fed reserve or some institution loose the dollar transfer fee. Maybe that is there is a need for a carbon tax, as the transfer fee of that money will replace the loss of the petro dollar fee? Follow the money tells all so to say?
Crow Hunter
03-31-14, 12:14
If somehow the Dollar DID stop being the world's currency, it would spell disaster.
The real issue is perception. As long as there is no better, safer place, the dollar will stand. But spending like a drunk sailor and monitizing our nation's debt is a bad way to keep this perception going....
I absolutely 100% agree.
montanadave
03-31-14, 12:27
If somehow the Dollar DID stop being the world's currency, it would spell disaster.
The real issue is perception. As long as there is no better, safer place, the dollar will stand. But spending like a drunk sailor and monitizing our nation's debt is a bad way to keep this perception going....
Unfortunately, that's one of those nasty advantages to being the reserve currency and last, safe harbor in an economic storm. Investors around the world keep buying up U.S. treasuries despite earning next to nothing in the way of returns. Who can resist borrowing money when it's a zero-interest (or close to) loan? Certainly not the U.S. government.
The shame is we're borrowing money to pay for shit which has absolutely no return in the long-term. If we were borrowing money to rebuild infrastructure, expand manufacturing, fight a war and actually keep the spoils, it might, just might, make sense. As it stands, it's short-sighted and ultimately detrimental to our economic and political security.
Can't remember who first posted this video here at M4C in another thread. Whoever it was - many thanks! If you have not seen this, I highly recommend you spend the time. It explains exactly why our system is a contrived scam that is doomed to fail while enriching a few.
The Biggest Scam in the History of the World
http://www.youtube.com/watch?v=iFDe5kUUyT0
Unfortunately, that's one of those nasty advantages to being the reserve currency and last, safe harbor in an economic storm. Investors around the world keep buying up U.S. treasuries despite earning next to nothing in the way of returns. Who can resist borrowing money when it's a zero-interest (or close to) loan? Certainly not the U.S. government.
The shame is we're borrowing money to pay for shit which has absolutely no return in the long-term. If we were borrowing money to rebuild infrastructure, expand manufacturing, fight a war and actually keep the spoils, it might, just might, make sense. As it stands, it's short-sighted and ultimately detrimental to our economic and political security.
It's worse than just borrowing...we are buying our own debt back with created dollars - totally devaluing what the dollar I earned was worth. Other people buying our debt is one thing, buying it ourselves is worse...Icing on the cake is that it's all being wasted on social programs. In the long run, just like Obamacare, it's not fiscally sustainable, and eventually someone is going to PAY (I'm afraid that person is my savings and my daughter's future)...
Can't remember who first posted this video here at M4C in another thread. Whoever it was - many thanks! If you have not seen this, I highly recommend you spend the time. It explains exactly why our system is a contrived scam that is doomed to fail while enriching a few.
The Biggest Scam in the History of the World
http://www.youtube.com/watch?v=iFDe5kUUyT0
It was me. I'll try to find one, if there is one, that explains perpetual bailouts and debt that I read about in one of my books. Basically the IMF or World Bank ''gives'' a loan to struggling countries, they then become part of the UN, or NATO or the bank of international settlements. In the end it works exactly the same, benefitting no one BUT the banks that create that money out of thin air because the countries go deeper and deeper into debt, having to take out new loans to cover the old loans with higher interest rates, on top of larger debt.
^ Thanks Caeser.
The latest...
What About The Dollar: Russia, Iran Announce $20 Billion Oil-For-Goods Deal
http://www.zerohedge.com/news/2014-04-02/whither-petrodollar-russia-iran-announce-20-billion-oil-goods-deal
Spot what is missing in the just blasted headline from Bloomberg:
IRAN, RUSSIA SAID TO SEAL $20B OIL-FOR-GOODS DEAL: REUTERS
If you said the complete absence of US Dollars anywhere in the funds flow you are correct. Which is precisely what we have been warning would happen the more the West and/or JPMorgan pushed Russia into a USD-free corner.
Once again, from our yesterday comment on the JPM Russian blockade: "what JPM may have just done is launch a preemptive strike which would have the equivalent culmination of a SWIFT blockade of Russia, the same way Iran was neutralized from the Petrodollar and was promptly forced to begin transacting in Rubles, Yuan and, of course, gold in exchange for goods and services either imported or exported. One wonders: is JPM truly that intent in preserving its "pristine" reputation of not transacting with "evil Russians", that it will gladly light the fuse that takes away Russia's choice whether or not to depart the petrodollar voluntarily, and makes it a compulsory outcome, which incidentally will merely accelerate the formalization of the Eurasian axis of China, Russia and India?"
Mo_Zam_Beek
04-03-14, 12:13
Related Note:
http://armstrongeconomics.com/2014/04/03/putin-beefing-up-syria-still-with-eyes-on-ukraine/
Putin has now more openly beefed-up Syria after Crimea. The West cannot stop Russia and he knows that. Stopping the pipeline through Syria is economically vital to retain Russia’s hold on Europe and the US will start to send gas to Europe in 2015. Syria is all about energy to help Europe – it has nothing to do about people. The rebels are religious motivated and if they displace Assad, then what? We have another Islamic nation opposed to the USA? Putin is dividing and conquering and Syria is his closest Arab ally. His victory in Crimea and NATO’s realization he could take all of Ukraine in 3 to 5 days, allows him to ignore U.S. and European Union calls for Assad to step down and boost Assad to ensure total victory to prevent the pipeline that would compete against Russia. The U.S. and EU hit dozens of Putin associates with travel and asset freezes the last month to protest Russia’s seizure of Crimea from Ukraine and the US Congress approved additional punitive measures this week. This of course is only escalating the entire situation and entrenched the positions to guarantee there will ultimately be a confrontation.
On Ukraine, Putin has brilliantly created a virtual reality war game that now includes a non-existent fascist threat to the lives of Russian speakers in Ukraine and the right to invade to protect them. There is no solution to negotiations since there is no such threat. The people of Maidan do not accept puppets from the US/EU or Russia just as the claims that “leaders” of Maidan hired snipers. There are no leaders for it has been a real consensus movement and those claiming to be leaders that showed their face a couple of times are not accepted by the people. Ukrainians are between a rock and a hard place with puppet leaders they still do not trust. The people in the West all spoke Russian for one day and those in the East spoke Ukrainian to show support for each other but that gets little press.
The bottom line is clear. There is no win-win in negotiations with Putin over Ukraine because there is no fascist threat. Therefore, nothing can be offered and nothing can actually be done. Putin knows the West is weak economically and when the US economy turns down, Europe will be torn apart by its own taxes and excessively high unemployment. Hollande still claims the French people want more “social justice” that he has defined and everyone has equal income after taxes - excluding politicians of course. The only “social justice” will be to let Putin take Europe and pay the pensions. That will send him back real fast.
It was me. I'll try to find one, if there is one, that explains perpetual bailouts and debt that I read about in one of my books. Basically the IMF or World Bank ''gives'' a loan to struggling countries, they then become part of the UN, or NATO or the bank of international settlements. In the end it works exactly the same, benefitting no one BUT the banks that create that money out of thin air because the countries go deeper and deeper into debt, having to take out new loans to cover the old loans with higher interest rates, on top of larger debt.
Bank$ters$ rule and the politican$ drool. The little people have no clue ,,, except for sports and TV.
These are the things that a few of us had been trying to alert people to but as my grandmother used to say:
"Those that cannot hear have to feel"...
-------------------------------------
"One cannot awaken a man who pretends to be asleep."
Bank$ters$ rule and the politican$ drool. The little people have no clue ,,, except for sports and TV.
Ha ha (in kid speak - LOLZ)...
I often use the example if:
"I can keep you stupid and have you concerned primarily with:
1. The game is on TV...
2. I have cold beer...
3. and, the pizza is on the way...
I control you".
Nothing wrong with the game, cold beer or pizza (yeah). But when it is your focus in life, you are my tool.
These are the things that a few of us had been trying to alert people to but as my grandmother used to say:
"Those that cannot hear have to feel"...
-------------------------------------
"One cannot awaken a man who pretends to be asleep."
Yes, thank you. I've paid attention to your perspective.
Yes, thank you. I've paid attention to your perspective.
You're welcome, brother.
-------------------------------------
"One cannot awaken a man who pretends to be asleep."
You're welcome, brother.
-------------------------------------
"One cannot awaken a man who pretends to be asleep."
Keep it coming. I'm evaluating and trying to advance my perspective.
Latest on Russian response to Ukraine-related sanctions:
http://www.zerohedge.com/news/2014-04-25/furious-russia-downgraded-just-above-junk-sp-proposes-scorched-earth-retaliation-aga
Furious Russia, Downgraded To Just Above Junk By S&P, Proposes "Scorched Earth" Retaliation Against NATO Countries
"But far more importantly, and ahead of yet another round of western sanctions which appears imminent unless Obama is to look even more powerless than he currently is (granted, a difficult achievement), Russian presidential adviser Sergei Glazyev proposed plan of 15 measures to protect country’s economy if sanctions applied, Vedomosti newspaper reports, citing Glazyev’s letter to Finance Ministry. According to Vedomosti as Bloomberg reported, Glazyev proposed:
- Russia should withdraw all assets, accounts in dollars, euros from NATO countries to neutral ones
- Russia should start selling NATO member sovereign bonds before Russia’s foreign-currency accounts are frozen
- Central bank should reduce dollar assets, sell sovereign bonds of countries that support sanctions
- Russia should limit commercial banks’ FX assets to prevent speculation on ruble, capital outflows
- Central bank should increase money supply so that state cos., banks may refinance foreign loans
- Russia should use national currencies in trade with customs Union members, other non-dollar, non-euro partners
Granted, Russian holdings of US Treasurys are not that substantial (and could be monetized entirely in three months of POMO by the Fed), and western financial linkages to Russia, aside from trade routes, are not life-threatening, but if Russia were to take the baton, and other BRIC countries, already furious by the recent US decision to not boost their IMF status, follow suit, then Obama's life is about to become a living nightmare. Especially, if that most important BRIC member - China - does any of the many things it can do to indicate if, in this brand new Cold War, it is with or against the US..."
But Reuters notes that Russia may be mere months away from signing a bilateral trade deal with China, where China would buy huge quantities of Russian oil and gas."
Reuters link on trade agreement:
http://www.reuters.com/article/2014/03/21/us-ukraine-crisis-russia-insight-idUSBREA2K07S20140321
"The Holy Grail for Moscow is a natural gas supply deal with China that is apparently now close after years of negotiations. If it can be signed when Putin visits China in May, he will be able to hold it up to show that global power has shifted eastwards and he does not need the West."
"However, China overtook Germany as Russia's biggest buyer of crude oil this year thanks to Rosneft securing deals to boost eastward oil supplies via the East Siberia-Pacific Ocean pipeline and another crossing Kazakhstan."
http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2014/03-overflow/20140322_gazprom_0.png
And it's done...
http://money.msn.com/business-news/article.aspx?feed=OBR&date=20140521&id=17637442&ocid=ansmony11
"China and Russia signed a $400-billion gas supply deal on Wednesday, securing the world's top energy user a major source of cleaner fuel and opening up a new market for Moscow as it risks losing European customers over the Ukraine crisis."
And of course the associated currency deal...
http://en.ria.ru/russia/20140520/189968566/Russia-China-Plan-to-Expand-Payments-in-National-Currencies.html
"Russia and China are planning to increase the volume of direct payments in mutual trade in their national currencies, according to a joint statement on a new stage of comprehensive partnership and strategic cooperation signed during high-level talks in Shanghai on Tuesday."
"The decision to switch to the national currencies, thus reducing dependence on the US dollar was first announced in 2010 by then-Russian Prime Minister Vladimir Putin and Chinese Premier Wen Jiabao. The announcement was followed by a deal struck by the central banks of the two countries that allowed bilateral trade in the ruble and renminbi, as well as in freely convertible currency."
Ah, so it's finally happened...I've been reading about this Russia-China gas deal for a couple months now.. Should be interesting to see what happens next.. The fact that the Chinese plan to have the Yuan fully convertible by 2018, is another important step. A fully convertible gold backed Yuan, will be a irresistible investment for a lot of investors/countries... That's not to say China doesn't have it's fair share of problems, they do.. But the big difference is, their money is at least, backed by something tangible, and ours isn't...Time will tell how this plays out...
^ Yep.
Not only is China buying up all the gold it can, Russia too is now dumping US Bonds and re-investing in gold...
http://dzswc0o8s13dx.cloudfront.net/goldcore_bloomberg_chart4_21-05-14.png
http://www.zerohedge.com/news/2014-05-21/russia-dumps-record-amount-us-treasurys-here-what-it-buying
"one country has been dumping US bonds at an unprecedented rate, and in March alone Russia sold a record $26 billion, or 20% of its holdings.
So as Russia is selling record amount of US paper, what is it buying? For the answer we go to Goldcore which tells us that...
Russia Buys 900,000 Ounces Of Gold Worth $1.17 Billion In April
The Russian central bank has again increased its gold reserves by another 900,000 ounces worth $1.17 billion in April."
http://dzswc0o8s13dx.cloudfront.net/goldcore_bloomberg_chart1_21-05-14.png
Russian Gold Reserves in Million Fine Troy Ounces - 1995-2014 - Monthly Chart (Bloomberg)
Moose-Knuckle
05-22-14, 15:41
And mean while back in the US . . .
http://i10.photobucket.com/albums/a144/AKS-74/barrygolfing_zpsa915e501.jpg (http://s10.photobucket.com/user/AKS-74/media/barrygolfing_zpsa915e501.jpg.html)
And mean while back in the US . . .
http://i10.photobucket.com/albums/a144/AKS-74/barrygolfing_zpsa915e501.jpg (http://s10.photobucket.com/user/AKS-74/media/barrygolfing_zpsa915e501.jpg.html)
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2014/05/Participation%20Rate%20April_0.jpg
Doc Safari
05-22-14, 16:23
Why do you guys keep arguing about all this financial stuff, and world war 3, and the Middle East, and whatnot?
Don't you know it's more important to make sure people with AIDS have free health care?
:lol:
If the US can become petroleum-self-sufficient, and possibly become the top petroleum producer, we would be in a better economic position. Our shale wealth is vast and we now know how to tap into it in a cost-effective way.
The progress we've made on the petroleum front has been in spite of the fool shown playing golf in earlier posts.
It continues....
http://www.zerohedge.com/news/2014-06-18/putin-advisor-proposes-anti-dollar-alliance-halt-us-foreign-aggression
"Putin Advisor Proposes "Anti-Dollar Alliance" To Halt US Aggression Abroad"
"It is still not clear just why the western media dropped Ukraine coverage like a hot potato, especially since the civil war in Ukraine's Donbas continues to rage and claim dozens of casualties on both sides. Perhaps the audience has simply gotten tired of hearing about mixed chess/checkers game between Putin vs Obama, and instead has reverted to reading the propaganda surrounding just as deadly events in the third war of Iraq in as many decades."
more-
"However, "out of sight" may be just what Russia's political elite wants. In fact, as VoR's Valentin Mândr??escu reports, while the great US spin and distraction machine is focused elsewhere, Russia is already preparing for the next steps. Which brings us to Putin advisor Sergey Glazyev, the same person who in early March was the first to suggest Russia dump US bonds and abandon the dollar in retaliation to US sanctions, a strategy which worked because even as the Kremlin has retained control over Crimea, western sanctions have magically halted (and not only that, but as the Russian central bank just reported, the country's 2014 current account surplus may be as high as $35 billion, up from $33 billion in 2013, and a far cry from some fabricated "$200+ billion" in Russian capital outflows which Mario Draghi was warning about recently)."
more -
"It is this same Glazyev who published an article in Russian Argumenty Nedeli, in which he outlined a plan for "undermining the economic strength of the US" in order to force Washington to stop the civil war in Ukraine. Glazyev believes that the only way of making the US give up its plans on starting a new cold war is to crash the dollar system."
more -
"Glazyev's set of countermeasures specifically targets the core strength of the US war machine, i.e. the Fed's printing press. Putin's advisor proposes the creation of a "broad anti-dollar alliance" of countries willing and able to drop the dollar from their international trade. Members of the alliance would also refrain from keeping the currency reserves in dollar-denominated instruments. Glazyev advocates treating positions in dollar-denominated instruments like holdings of junk securities and believes that regulators should require full collateralization of such holdings. An anti-dollar coalition would be the first step for the creation of an anti-war coalition that can help stop the US' aggression."
It continues....
http://www.zerohedge.com/news/2014-06-18/putin-advisor-proposes-anti-dollar-alliance-halt-us-foreign-aggression
"Putin Advisor Proposes "Anti-Dollar Alliance" To Halt US Aggression Abroad"
"It is still not clear just why the western media dropped Ukraine coverage like a hot potato, especially since the civil war in Ukraine's Donbas continues to rage and claim dozens of casualties on both sides. Perhaps the audience has simply gotten tired of hearing about mixed chess/checkers game between Putin vs Obama, and instead has reverted to reading the propaganda surrounding just as deadly events in the third war of Iraq in as many decades."
more-
"However, "out of sight" may be just what Russia's political elite wants. In fact, as VoR's Valentin Mândr??escu reports, while the great US spin and distraction machine is focused elsewhere, Russia is already preparing for the next steps. Which brings us to Putin advisor Sergey Glazyev, the same person who in early March was the first to suggest Russia dump US bonds and abandon the dollar in retaliation to US sanctions, a strategy which worked because even as the Kremlin has retained control over Crimea, western sanctions have magically halted (and not only that, but as the Russian central bank just reported, the country's 2014 current account surplus may be as high as $35 billion, up from $33 billion in 2013, and a far cry from some fabricated "$200+ billion" in Russian capital outflows which Mario Draghi was warning about recently)."
more -
"It is this same Glazyev who published an article in Russian Argumenty Nedeli, in which he outlined a plan for "undermining the economic strength of the US" in order to force Washington to stop the civil war in Ukraine. Glazyev believes that the only way of making the US give up its plans on starting a new cold war is to crash the dollar system."
more -
"Glazyev's set of countermeasures specifically targets the core strength of the US war machine, i.e. the Fed's printing press. Putin's advisor proposes the creation of a "broad anti-dollar alliance" of countries willing and able to drop the dollar from their international trade. Members of the alliance would also refrain from keeping the currency reserves in dollar-denominated instruments. Glazyev advocates treating positions in dollar-denominated instruments like holdings of junk securities and believes that regulators should require full collateralization of such holdings. An anti-dollar coalition would be the first step for the creation of an anti-war coalition that can help stop the US' aggression."
I have no doubts they'll get it done...I don't think it'd be too hard to convince the BRIC nations to go along with this, and once it got going, I'd bet there would be a number of other country's that'd jump on board as well, once they've seen that there no repercussions from doing so... I mean, what's Obumbo gonna do? More sanctions? Yeah, that worked real well with Russia...
Some great insight and background info on our true state of affairs. Better aware than manipulated.
"How A Country Dies"
http://www.zerohedge.com/news/2014-06-22/how-country-dies
If the US can become petroleum-self-sufficient, and possibly become the top petroleum producer, we would be in a better economic position. Our shale wealth is vast and we now know how to tap into it in a cost-effective way.
The progress we've made on the petroleum front has been in spite of the fool shown playing golf in earlier posts.
I agree and certainly do hope for energy independence. We could become the go-to-source for almost a majority (by some accounts) of fossil fuel resources. That combined with a major push to alternative sources of DOMESTIC energy like hydrogen cell technology, would allow us to sell an enormous amount of fossil fuel to offshore customers. Amazing to see the intentional undermining of our capability via the EPA - just another example of intentional destruction of the system (ala Cloward-Piven Strategy).
This is a bit of catch-22 issue. We are so dependent upon the Petrodollar artificially supporting our currency valuation that I fear any transition period may be enough to trigger the fall. I'm not certain that we could weather the period from the Petrodollar to currency independence.
The existing Petrodollar system is GOING to crash - whether from Black Swan event, ineptitude or intentional. This is the tricky part to figure out - exactly how to make the transition before the fall. It must include massive sacrifices and deviations from the entitlement mentality. I fear the majority of our population simply won't ,and is likely incapable of that level of cultural change. My parents and grandparents generation (i.e. Great Depression era) certainly could. But this current population - not likely.
Agree with you cinco, and I believe the intention is that most people DO NOT adjust and become debt serfs for life. Work for lower wages, buy goods at crony companies, get more debt at crony banks, vote for who the big boss marks for you to vote. Just like a national version of the coal mine and company store in the holler.
Crow Hunter
06-24-14, 08:42
Reiterating my previous posts on the subject.
Whose currency will the world other than the Dollar?
I see lots of theories on why the Petrodollar will cease but what about the alternatives? It is kind of pointless to speculate on the reasons to dump the dollar without speculating on what will replace it.
No one will dump the dollar until there is a better replacement. There are no other currencies right now that I personally would trust the way I trust the dollar.
The closest thing would be the Euro but there are always talks of the breakup of the Eurozone and a return to home currencies.
What would you choose instead of the dollar?
Reiterating my previous posts on the subject.
Whose currency will the world other than the Dollar?
I see lots of theories on why the Petrodollar will cease but what about the alternatives? It is kind of pointless to speculate on the reasons to dump the dollar without speculating on what will replace it.
No one will dump the dollar until there is a better replacement. There are no other currencies right now that I personally would trust the way I trust the dollar.
The closest thing would be the Euro but there are always talks of the breakup of the Eurozone and a return to home currencies.
What would you choose instead of the dollar?
To think that the FRN is irreplaceable is folly and flies in the face of world history. The British soverign used to be accept the world over because "The sun never sets on the British Empire" yet look at it now...
I suspect that the Yuan(Renmibi) could replace it. That may take a while but there is going to come a point in time when the U.S. will need China more than they will need the U.S.
Reiterating my previous posts on the subject.
Whose currency will the world other than the Dollar?
I see lots of theories on why the Petrodollar will cease but what about the alternatives? It is kind of pointless to speculate on the reasons to dump the dollar without speculating on what will replace it.
No one will dump the dollar until there is a better replacement. There are no other currencies right now that I personally would trust the way I trust the dollar.
The closest thing would be the Euro but there are always talks of the breakup of the Eurozone and a return to home currencies.
What would you choose instead of the dollar?
To think that the FRN is irreplaceable is folly and flies in the face of world history. The British soverign used to be accept the world over because "The sun never sets on the British Empire" yet look at it now...
I suspect that the Yuan(Renmibi) could replace it. That may take a while but there is going to come a point in time when the U.S. will need China more than they will need the U.S.
Crow and Big Al I'm tracking with you both and the following are two possibilities - one based upon a crisis the other based upon manuevering:
1. Gold - If a manufactured crisis or Black Swan event, I see gold instantly becoming the replacement. This is why I believe you see such major moves being taken by the main players (see above posts on massive buying programs by the Russians and Chinese). This would include such moves by Germany recalling its overseas gold reserves. I believe this is why one sees so much consideration to gold and how major banks/etc. are attempting to manipulate the low price of gold (sort of a backdoor opportunity for them to acquire as much as possible at depressed prices).
Plenty of info on gold price manipulation:
http://www.bloomberg.com/news/2014-02-28/gold-fix-study-shows-signs-of-decade-of-bank-manipulation.html
"The London gold fix, the benchmark used by miners, jewelers and central banks to value the metal, may have been manipulated for a decade by the banks setting it, researchers say."
http://www.reuters.com/article/2014/03/05/us-gold-fix-idUSBREA240R620140305
"In the filing with the U.S. District Court in Manhattan dated March 3, New York resident Kevin Maher, who says he bought and sold gold and gold futures and options, alleged the banks overseeing the benchmark - Societe Generale (SOGN.PA), Deutsche Bank (DBKGn.DE), Barclays (BARC.L), Bank of Nova Scotia (BNS.TO) and HSBC (HSBA.L) - colluded to manipulate it."
http://www.zerohedge.com/news/2014-05-23/barclays-fined-manipulating-price-gold-decade-sending-bursts-sell-orders
"It was almost inevitable: a week after we wrote "From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold" and days after "Barclays' Head Of Gold Trading, And Gold "Fixer", Is Leaving The Bank", earlier today the UK Financial Conduct Authority finally formalized what most in the "tin-foil" hat community had known for years, when it announced that it fined Barclays £26 million for manipulating "the setting of the price of gold in order to avoid paying out on a client order." Furthermore, the FCA confirmed that those inexplicable gold raids which come as if out of nowhere, and slam gold with a vicious force so strong sometime they halt the entire market,"
2. Yuan (Renmibi) - I agree with what Big Al points out above. The Yuan is the likely replacement that BRICS will be adopting when the time is right. Certainly, the Yuan has major issues with manipulation - but hey so does the dollar. So not exactly trading a steady/secure currency for another - just another face on the international banking games - till it's the Yuan's turn to fail. As Big Al points out reserve currencies do not last, they simply shift around the globe depending upon expanding/contracting economic powers.
Moves are already taking place to position the Yuan with the major players in Europe - IMO in anticipation of the break-up of the EU and especially the driving economic factor of the EU, Germany, abandoning the Euro. The following is taken from my first post:
8. China and Germany Sign Yuan-Agreement Pact. Has Germany finally decided to begin the movement from the disaster of the EU and devaluation of Euro to alternate arrangements? Certainly America’s spying on Merkel and our economic health and foreign relations perception isn’t helping.
- http://www.zerohedge.com/news/2014-0...s-saudi-arabia
Germany’s Bundesbank and the People’s Bank of China agreed to cooperate in the clearing and settling of payments in renminbi, paving the way for Frankfurt to corner a share of the offshore market.
The central banks signed a memorandum of understanding in Berlin today, when Chinese President Xi Jinping met German Chancellor Angela Merkel, the Frankfurt-based Bundesbank said in an e-mailed statement.
Germany’s financial capital prevailed over Paris and Luxembourg in a euro-area race to win trade in renminbi, which overtook the euro to become the second-most used currency in global trade finance in October, according to the Society for Worldwide Interbank Financial Telecommunication. The U.K. Treasury said on March 26 that the Bank of England would sign an initial agreement with the PBOC on March 31 to clear and settle yuan transactions in London.
“Frankfurt is one of Europe’s foremost financial centers and home to two central banks, making it a particularly suitable location,” said Joachim Nagel, a member of the Bundesbank’s executive board. “Renminbi clearing will strengthen the close economic and financial ties between Germany and the People’s Republic of China.”
Whenever the world figures this out and someone creates a gold backed currency.
http://www.freerepublic.com/focus/f-news/888963/posts
Although you tend to get into more complex issues with gold backed currency, possible slowing of an economy due to a lower money velocity. Of course that's dependent on a peaceful transition.
Of you try to even explain the above to the average voter I usually get blank stare like I grew 3 heads all of a sudden.
Crow Hunter
06-24-14, 12:53
To think that the FRN is irreplaceable is folly and flies in the face of world history. The British soverign used to be accept the world over because "The sun never sets on the British Empire" yet look at it now...
I suspect that the Yuan(Renmibi) could replace it. That may take a while but there is going to come a point in time when the U.S. will need China more than they will need the U.S.
Yes it could.
But not now. Not for a while. Probably not in our lifetimes. The Chinese economy doesn't have the depth on the bench compared to their population and their court/regulatory systems aren't reliable enough for that and won't be until they become a MUCH more open society. Not something those in power are going to want to do because it will hurt them even though it would help their people. That lack of independence in their financial markets hurts them.
The big reason I think the British pound lost prominence is because of the breakup of the Empire. It no longer had the economic/labor resources to back up it's currency compared to other countries economic horsepower. I think if it wasn't for the emergence of the US as an economic superpower with the excellent Anglo/Dutch banking/economic systems the British pound would still be the international currency of choice. That is another ding against China. They do not have the Anglo/Dutch economic system and therefore their banking system isn't as robust or as agile as the US. We don't really think about it but other than the US, England and a few countries in Europe our banking system is not universal across the world. Just look at something as simple as bankruptcy in Eastern countries like Japan. That is a fundamental flaw. In the US, a company or individual can start over again and begin producing positive returns, that isn't as easy in non-Anglo/Dutch economic systems and it slows them down. Look how long the Japanese economy has been in the doldrums.
1. Gold - If a manufactured crisis or Black Swan event, I see gold instantly becoming the replacement. This is why I believe you see such major moves being taken by the main players (see above posts on massive buying programs by the Russians and Chinese). This would include such moves by Germany recalling its overseas gold reserves. I believe this is why one sees so much consideration to gold and how major banks/etc. are attempting to manipulate the low price of gold (sort of a backdoor opportunity for them to acquire as much as possible at depressed prices).
Plenty of info on gold price manipulation:
http://www.bloomberg.com/news/2014-0...ipulation.html
"The London gold fix, the benchmark used by miners, jewelers and central banks to value the metal, may have been manipulated for a decade by the banks setting it, researchers say."
http://www.reuters.com/article/2014/...A240R620140305
"In the filing with the U.S. District Court in Manhattan dated March 3, New York resident Kevin Maher, who says he bought and sold gold and gold futures and options, alleged the banks overseeing the benchmark - Societe Generale (SOGN.PA), Deutsche Bank (DBKGn.DE), Barclays (BARC.L), Bank of Nova Scotia (BNS.TO) and HSBC (HSBA.L) - colluded to manipulate it."
http://www.zerohedge.com/news/2014-0...ts-sell-orders
"It was almost inevitable: a week after we wrote "From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold" and days after "Barclays' Head Of Gold Trading, And Gold "Fixer", Is Leaving The Bank", earlier today the UK Financial Conduct Authority finally formalized what most in the "tin-foil" hat community had known for years, when it announced that it fined Barclays £26 million for manipulating "the setting of the price of gold in order to avoid paying out on a client order." Furthermore, the FCA confirmed that those inexplicable gold raids which come as if out of nowhere, and slam gold with a vicious force so strong sometime they halt the entire market,"
I don't think gold will even remotely be used. Just like you linked in your article. It is just as open to manipulation as a fiat currency is but it is further constrained in that it is not as easily divisible as a paper fiat currency and extremely susceptible to deflationary pressures. Deflation kills economies and really, really hurts poor people while really helping rich people (those with cash versus debts) and it is very difficult to control. Inflation can be controlled to a certain extent by manipulating the currency and helps those with debt and penalizes those who do not "put their money to work" earning something over inflation and thereby driving economic growth.
I think that gold is being bought by world powers, not because they are planning to change to a gold backed currency, but because they are worried about some type of a black swan type event (possibly a new limited world shooting or trade war?) that usually interrupts normal peacetime valuations of national currencies and they feel they may need to purchase items from other countries with much higher economic production capacities while their home currencies are "distressed". Having some gold available to trade for other items with other countries is probably a good thing. But it could also just be something they are doing because their corrupt leaders are planning on absconding with the gold or they could be trying to manipulate prices of other items tied to gold.
I definitely would NOT be changing my investments or asset allocation based on any of the fears of the collapse of the petrodollar. (I actually recently decreased my international asset allocation from 50% of equity to 30% of equity) because I see some risk in holding too much international equity as I am getting older.
I am going to get me a few small gold and silver coins though when the prices finish reverting to the mean. Just so I can play with them. :)
Good comments and insight Crow. I appreciate you sharing your viewpoint. You're obviously a sharp guy with good understanding of matters. Please continue with your comments - you're helping me to grow in my understanding by considering other perspectives.
I'd guess it is safe to say we mostly all agree that the word "manipulation" is heavily involved in all matters of economics. What concerns me from matters I've discerned about the lengths and heights of this manipulation (the book "The Grand Chessboard" by Zbigniew Brzezinski comes to mind) is perhaps we might be witnessing the maneuvering for an orchestrated "Black Swan" that would force the world off the dollar. Thus, gold would allow those countries/oligarchs to weather that very rough transition (this is how I should have explained what role gold would play as a transitional means to a replacement fiat currency).
I understand what you are getting at by detailing China's economic woes - thus my earlier comments about the Yuan having it's own issues. I believe you have a much better understanding than I do, so keep up the detailed explanations. A crisis would simply move the time table up for a reserve currency switch. For those in the "know" the implications could literally mean a century of dominance.
In association, this brings to mind discussions we had, I believe in the "Ukraine at the Precipice" thread, regarding the long term Russian/Chinese/Communist plan. When the above discussions are considering from the perspective of an anti-American alliance designed to undermine western economic and cultural foundations, it does seem to dove tail to an extent. Anatoliy Golitsyn, an early 1960s KGB defector, had some many interesting things to say about this strategy that have come to fruition:
http://en.wikipedia.org/wiki/Anatoliy_Golitsyn
- "In 1984, Golitsyn published the book New Lies For Old,[13] wherein he warned about a long-term deception strategy of seeming retreat from hard-line Communism designed to lull the West into a false sense of security, and finally economically cripple and diplomatically isolate the United States."
- "In his book Wedge - The Secret War between the FBI and CIA (Knopf, 1994), Mark Riebling stated that of 194 predictions made in New Lies For Old, 139 had been fulfilled by 1993, 9 seemed 'clearly wrong', and the other 46 were 'not soon falsifiable'"
- "claim that the "Sino-Soviet split was a charade to deceive the West"
Just trying to wrap my mind around this very complex issue. I appreciate the guys participating here and sharing your knowledge and perspectives. I find I learn/comprehend best by a back-and-forth brainstorm/spitball discussion. Keep it coming I'm learning and enjoying the growth.
Also, periodic chaos is an opportunity for the oligarch elites. They could make a killing by getting into commodities (broad sense) now, trash the dollar, and then even reestablish the dollar and sell those hard assets back. Whipsaw the common man both ways and end up with even more cash.
Crow Hunter
06-26-14, 10:29
Good comments and insight Crow. I appreciate you sharing your viewpoint. You're obviously a sharp guy with good understanding of matters. Please continue with your comments - you're helping me to grow in my understanding by considering other perspectives.
Thank you for the compliment but I am not really that sharp. :o
I am an engineer and by nature I like to understand a problem as much as possible before embarking on a solution. Since I have my (hopefully early) retirement future tied up in this stuff, I try to understand it as well as I can. While I certainly believe that there is always the possibility for a collapse of the dollar and the US being taken back to a 3rd world country there really isn't anything that I can do about it. If it all goes to pot, it won't be in my direct control and any effort I make to "plan for it" will very likely backfire just as bad as "putting my head in the sand" and continuing to invest using the same methods that have worked for the last 150 years. Look up the Lazy Portfolio as championed by Mr. Taylor Larimore. (A Battle of the Bulge WWII vet from the 101st)
I think the likelihood of that catastrophe to be so small relative to the likelihood of my dying of old age broke living on nothing but a reduced social security allowance from the government that I focus on what I can do to make as much money as possible before I retire with the assumption that the US will continue to be at least in the top 2 or 3 economic powerhouses in the world through my lifetime with the $ still being, if not the world reserve currency, at least the currency that I will be required to legally tender my debts/taxes with.
If I a wrong, there isn't much that I can do about it other than moving to another country as a refugee and I will not do that even if my only other option is to starve to death sitting on the gravestones of my parents/family with a rifle in my hands.
If I a wrong, there isn't much that I can do about it other than moving to another country as a refugee and I will not do that even if my only other option is to starve to death sitting on the gravestones of my parents/family with a rifle in my hands.
I share your sentiment 100%. I really want to see this issue addressed and resolved before we enter an economic collapse unlike anything ever seen. Man, I cannot even begin to fathom the level of suffering this country would endure. Most all of our countrymen are paycheck to paycheck and already upside down on most things.
I really enjoy the website ZeroHedge as they cover the underbelly of the financial world that the MSM won't touch with a 10 foot pole. It has really awakened me to what the true degree of manipulation occurs in the financial world.
Another great article today from them...
http://www.zerohedge.com/news/2014-06-27/mainstream-media-admits-us-dollars-domination-coming-end
"Mainstream Media Admits "The U.S. Dollar's Domination Is Coming to an End"
The Chinese government has been rapidly loosening controls over the renminbi to increase its reserve status and compete with the dollar. And the rest of the world has quickly adapted to the opportunity.
The proof is clear. According to SWIFT, China’s renminbi is now the second most used currency in the world for global trade settlement, putting it ahead of even the euro.
In London, renminbi trade last year surged 50% to $25.3 billion per day. And there’s every indication that this growth will continue.
Singapore’s central bank is now offering overnight renminbi liquidity. Russian companies are preparing to pay for trade in renminbi. Even the World Bank’s IFC just issued its first renminbi-denominated bond.
It’s happening. And based on the data, it’s completely obvious… to just about everyone but the US government.
I was surprised to see an article in the Financial Times’ banking intelligence subsidiary (‘The Banker’) entitled “The US’s dollar domination is coming to an end.”
The Banker is a good source of info.
Crow Hunter
06-27-14, 15:04
http://economix.blogs.nytimes.com/2014/03/26/qa-why-the-dollar-remains-the-reserve-currency/?_php=true&_type=blogs&_r=0
We know the euro has not challenged the dollar as a reserve currency. What about the prospects for China’s currency, the renminbi, becoming a global reserve currency?
A.If China moves ahead with financial market reforms and liberalizes capital flows so foreign investors can acquire RMB-denominated assets, China’s renminbi could become a major reserve currency. But that wouldn’t be enough to make the renminbi a safe haven currency that would challenge the dollar. For that to happen, China would have to undertake significant reforms to its political, institutional and legal frameworks. That is needed for foreign investors to invest with confidence in China’s markets, for safety rather than just high yield.
What made the dollar attractive?
A.It’s simple: there are no good alternatives to the dollar. Any time you think of the dollar losing its dominance, you have to ask yourself: if not the dollar, then what? And there’s no good answer. Emerging markets need foreign exchange reserves to protect themselves from volatile capital flows. And private investors and financial institutions want safe and liquid assets – assets expected to at least hold their principal value and that are easy to trade. These are typically government bonds.
But the supply of safe assets in the world has shrunk. The euro zone doesn’t look quite as safe anymore. Japan and Switzerland don’t want money flowing into their markets, as that would drive up the value of their currencies and hurt their exports. So that leaves the United States as the main provider of safe financial assets in the form of U.S. Treasury securities.
One of the surprising findings of your book is that things didn’t quite work out the way economists like you expected after the global financial crisis begin to hit in late 2008. What happened?
A.I expected the dollar to weaken because the crisis exposed problems in the U.S. financial system. Moreover, the U.S. racked up a lot of government debt and the Fed began flooding the global financial system with dollars. The more dollars there are out there, the less value they should have. But the exact opposite happened. The dollar, if anything, gained slightly in value.
Contrary to all expectations, the U.S. dollar’s position as the world’s dominant reserve currency has been strengthened by the crisis. The world became even more dependent on the dollar than it had been before the crisis.
Anything is possible (and why you should own diversified assets including foreign stocks, cash and real property/commodities, including gold/silver if you like them) but I just don't see the dollar collapsing happening in my lifetime. Worst case I see a mixed Dollar/reminbi/other alternative currencies being used with a slow transition away from the dollar. There is also a serious possibility of inflation so keeping low interest fixed rate debts on appreciating real property rather than paying them off might be a good idea.
I play the field and try to own a little of everything (diversification). I have stock/bonds/international stock/real estate and....... guns/ammo.;)
I would, however, be much more worried about being stuck eating catfood at 70 because I didn't invest in a good diverse 3 Fund portfolio or Permanent Portfolio because I was expecting a "dollar collapse" and "bet" it all on one thing (like Gold or even just stocks) and have my bet be wrong.
If you look back long enough there have been expectations of an imminent US collapse since the 1970s. Just read some of the opening of Mel Tappen's Survival guns. If you didn't know any better you would assume it was written in recently except for the now impossible to find and now collector guns. ;)
A person investing $10,000 back in 1977 in the equivalent of the 3 Fund portfolio would be sitting pretty right now.
Cinco and Crow Hunter, thank you for your input.
I'm right there with you guys in realizing there is little we can do about this. All we can really do is be prepared to ride out the civil unrest that will inevitably come with the collapse of our economy. I'm hoping that it won't ever happen but the future sure doesn't look too promising.
I will differ to y'all's input in this matter as you both seem more well read up on it than I. This stuff just scares the crap outta me more than the threat of nuclear warfare.
brickboy240
07-01-14, 15:17
Although yes...there IS not great alternative to the USD...is there any chance that the USD could be replaced by a basket of other currencies? The Yuan and possibly other currencies together?
THAT is what worries me...I think that might be possible.
-brickboy240
Some great insight and background info on our true state of affairs. Better aware than manipulated.
"How A Country Dies"
http://www.zerohedge.com/news/2014-06-22/how-country-dies
"Ahh" an interesting bit of commentary following the article, to say the least!
jbvtme
jbvtme's picture
btw...during what period was this country ever great? indian genocide, slavery, exploitation of immigrants and factory workers, trashing the environment, wars, wars, wars, assassinations, political intrigue, debauched media, brainwashing in schools, fake moon landings, pedophelia, socialism, darwinism...there is barely a spiritual bone in the body of this wretched country ruled by reptilian reprobates spawned from the bottom of the gene pool who have floated like excrement to the top of the food chain. we have trashed this planet. i pray the mother ship shows us no mercy!
This could be interpreted in two ways, he's a kook, or perhaps he's an individual devoted to spreading a narrative.....
Moose-Knuckle
07-01-14, 16:13
"Ahh" an interesting bit of commentary following the article, to say the least!
This could be interpreted in two ways, he's a kook, or perhaps he's an individual devoted to spreading a narrative.....
Reptilians huh, he must be from the David Icke crowd.
montanadave
07-01-14, 16:25
If your excrement floats, might be time to consider a dietary adjustment . . . or a checkup.
Although yes...there IS not great alternative to the USD...is there any chance that the USD could be replaced by a basket of other currencies? The Yuan and possibly other currencies together?
THAT is what worries me...I think that might be possible.
-brickboy240
That's quite possible, and exactly what the BRICS nations (especially China,Russia) have been angling for... All that needs done is to price oil in something other than dollars, and a fully convertible gold backed currency would be very convincing to OPEC...And, if that happened (big IF) soon afterward we might all be going Amish...
Even the Drudge Report has a link up to Zero Hedge. Some tidbits...
http://www.zerohedge.com/news/2014-07-02/brics-are-morphing-anti-dollar-alliance
"The BRICS Are Morphing Into an Anti-Dollar Alliance"
- Before the crucial visit to Beijing next week, the governor of the Russian Central Bank, Elvira Nabiullina met Vladimir Putin to report on the progress of the upcoming ruble-yuan swap deal with the People's Bank of China and Kremlin used the meeting to let the world know about the technical details of its international anti-dollar alliance.
- On June 10th, Sergey Glaziev, Putin's economy advisor published an article outlining the need to establish an international alliance of countries willing to get rid of the dollar in international trade and refrain from using dollars in their currency reserves.
- “We've done a lot of work on the ruble-yuan swap deal in order to facilitate trade financing. I have a meeting next week in Beijing”, she said casually and then dropped the bomb: “We are discussing with China and our BRICS parters the establishment of a system of multilateral swaps that will allow to transfer resources to one or another country, if needed. A part of the currency reserves can be directed to [the new system].”
- Currency swaps between the BRICS central banks will facilitate trade financing while completely bypassing the dollar. At the same time, the new system will also act as a de facto replacement of the IMF, because it will allow the members of the alliance to direct resources to finance the weaker countries. As an important bonus, derived from this “quasi-IMF” system, the BRICS will use a part (most likely the “dollar part”) of their currency reserves to support it, thus drastically reducing the amount of dollar-based instruments bought by some of the biggest foreign creditors of the US.
- “I think the work on ruble-yuan swap line will finalized in the nearest future and the way for ruble-yuan settlement will be open. Moreover, we are not the only ones with such initiatives. We know about the statements made by Mr. Noyer, chairman of the Bank of France. As a retaliation for what Americans have done to BNP Paribas, he opined that the trade with China must be done in yuan or euro.”
Nice article about the BNP mess over at Mish's Global Economic trend Analysis...Basically, Putin nailed it when he called the fine leveied on BNP "blackmail"...and, it's looking like France, as well as a few other European nations are about ready to tell Obumbo "**** you and your dollars" This idiot in the white house is going to wake up one morning, and find out that all these sanctions have done is isolate the U.S. and at that point no one will want dollars for anything...except maybe for toilet paper... Europe and the rest of the world are figuring out that they really don't need the dollar... This is one battle the U.S. is going to lose, and it's going to hurt, bad..
Crow Hunter
07-05-14, 12:11
http://www.cigionline.org/articles/internationalization-of-renminbi
Eichengreen: China’s size works in favour of a major international role for its currency, and China will be the largest economy in the world in the not too distant future. But a national unit is attractive as an international currency only if that unit is stable and markets in it are liquid. Building liquid markets is a major challenge, and meeting it requires much more than sheer economic size. So China has a long way to go before the RMB can rival the dollar or even the euro on the global stage.
It will happen in the future, barring a world war or other disaster, but it will be a while and it will be good in the long run for all of us. While a devalued dollar will suck in the short term, having the dollar be worth less on the global market will stop outsourcing in it's tracks and begin pulling manufacturing and other jobs back into the US and help restore middle class wages.
Nice article about the BNP mess over at Mish's Global Economic trend Analysis...Basically, Putin nailed it when he called the fine leveied on BNP "blackmail"...and, it's looking like France, as well as a few other European nations are about ready to tell Obumbo "**** you and your dollars" This idiot in the white house is going to wake up one morning, and find out that all these sanctions have done is isolate the U.S. and at that point no one will want dollars for anything...except maybe for toilet paper... Europe and the rest of the world are figuring out that they really don't need the dollar... This is one battle the U.S. is going to lose, and it's going to hurt, bad..
I believe you are correct.
The whole French BNP angle is quite interesting when you consider the massive Franco-Russian naval warship deal. One more incentive for France to work these deals directly in local currency.
http://www.themoscowtimes.com/business/article/mistral-warship-deal-between-france-and-russia-is-about-economy-not-ethics/502705.html
As 400 Russian sailors docked on the French coast Monday to train on a Mistral-class helicopter carrier, analysts agreed that France's sale of warships to Russia against the backdrop of the Ukraine crisis showcases the triumph of economic concerns over the West's seemingly consolidated political stance on Moscow.
France's training of Russian sailors and its sale of two Mistral warships to Russia for 1.2 billion euros ($1.6 billion) has prompted the indignation of France's Western partners, who have said that the country should support efforts to isolate Russia in response to its annexation of Crimea and the subsequent unrest in eastern Ukraine. France has defended its decision by saying that rescinding the deal would hurt Paris more than Moscow.
For me, it is much easier to take all this in context when one views that all this crap going down on Obama's watch is ON PURPOSE. Obama and his handler's have the hammer down on the throttle towards oblivion. It is really, really hard to fathom the true extent of damage done during his tenure.
The elites think that by weakening the US we will be forced into world government. Obama and a majority of Congress are working hard to make that happen. The may be surprised that as the federal govt becomes more weaker irrelevant and dangerous that states may just say go to hell and "borrow the power" right the hell back.
The elites think that by weakening the US we will be forced into world government. Obama and a majority of Congress are working hard to make that happen. The may be surprised that as the federal govt becomes more weaker irrelevant and dangerous that states may just say go to hell and "borrow the power" right the hell back.
That's a good point, I don't think Obumbo and his handlers, ever really thought that part out..I don't think that it occurred to them that when the Federal Govt rolls over as they've planned, that the State Govt's may not, and add to that, by the time that happens, most of the people in all 50 states will have figured out that they just took a good ****ing, and they'll be royally pissed. Now, instead of one Federal Govt to deal with, the elites will have possibly 50 smaller ones to deal with. I'd also bet that most of these smaller State Gov'ts won't be buying what they're selling.. At that point, well, let's say things just got a lot more difficult....
The elites think that by weakening the US we will be forced into world government. Obama and a majority of Congress are working hard to make that happen. The may be surprised that as the federal govt becomes more weaker irrelevant and dangerous that states may just say go to hell and "borrow the power" right the hell back.
That's a good point, I don't think Obumbo and his handlers, ever really thought that part out..I don't think that it occurred to them that when the Federal Govt rolls over as they've planned, that the State Govt's may not, and add to that, by the time that happens, most of the people in all 50 states will have figured out that they just took a good ****ing, and they'll be royally pissed. Now, instead of one Federal Govt to deal with, the elites will have possibly 50 smaller ones to deal with. I'd also bet that most of these smaller State Gov'ts won't be buying what they're selling.. At that point, well, let's say things just got a lot more difficult....
Agree with your perspectives. Perhaps the motivation for Obama's comments and subsequent moves to have a "domestic security force just as powerful as the military" (or something along those lines). Just saying if they do realize future state opposition and that the dollar will fall, I can see people of their mindset staging an event to blame on our economic collapse. Say a massive cyber attack and all the digital money goes "poof" (out of your account and into another). Most folks aren't aware that the majority of the fiat dollar currency is actually in digitized form. Per the Federal Reserve website (http://www.federalreserve.gov/faqs/currency_12773.htm):
There was approximately $1.28 trillion in circulation as of May 14, 2014, of which $1.23 trillion was in Federal Reserve notes.
Better for them to control the when and how - and then try to establish firm "socialist" control for you know "the children". The ultimate climate for government dependency.
Interesting article link below on what the US would look like if all secessionist movements were to succeed. Not that all are quite legit or could be successful, but as you both point out people are getting fed up and there are some very viable states that could pull it off (such as a Texas Republic with TX, OK, LA with the oil/natural gas and technical resources along with major port and waterways).
http://www.dailymail.co.uk/news/article-2531986/The-124-States-America-A-look-USA-been.html
The 124 States of America
http://i.dailymail.co.uk/i/pix/2014/01/01/article-2531986-1A5CB58700000578-62_964x662.jpg
Seems like this topic is drawing more attention from the Drudge Report. Another story on their page today:
http://voiceofrussia.com/news/2014_07_04/Beijing-Seoul-agree-to-direct-trade-in-national-currencies-4477/
Beijing, Seoul agree to direct trade in national currencies
China designated a clearing bank in Seoul for yuan transactions in South Korea on Friday, coinciding with a visit by President Xi Jinping, as Beijing promotes greater use of its currency overseas, AFP reports.
China's central bank has authorised the Bank of Communications, the country's fifth largest lender, to undertake yuan clearing business in the South Korean capital, the People's Bank of China (PBoC) said in a statement.
The announcement came as Chinese President Xi Jinping wrapped up a state visit to South Korea on Friday. China is seeking to make the yuan - also known as the renminbi - used more internationally in keeping with the country's status as the world's second biggest economy behind the United States.
No revolt by some or all the states will be a success unless it demands and forces the elimination of the "Federal" Reserve and any form of privately held central bank. I think a lot of blood will get spilled before that happens.
No revolt by some or all the states will be a success unless it demands and forces the elimination of the "Federal" Reserve and any form of privately held central bank. I think a lot of blood will get spilled before that happens.
Quite true, But unfortunately, this is exactly what needs to happen, I'd go so far as to say that the JP Morgans, Goldman-Sachs, and all the others that benefitted from the creation, and involvement in the fed, need to be run out of the country, never to return...after ALL of their money, property is seized... I seem to remember this tactic worked well shortly after the revolutionary war...Tories were told..
A. There's a boat in the harbor that's heading back to England.
B.Your ass better be on it, 'cause you're not staying here.
C. You can take with you, whatever you can carry on your back.
D You forfeit your property, business, etc...
http://www.zerohedge.com/news/2014-07-08/us-set-alienate-angry-germany-next-crackdown-shifts-bnp-commerzbank-deutsche-bank
All of the geopolitical posts that had been ridiculed here all pointed to exactly that. Folks don't want to hear the truth or ANYTHING that upsets their concept of reality.
Those that cannot hear/see/foresee have to feel/experience...
-------------------------------------
"One cannot awaken a man who pretends to be asleep."
montanadave
07-08-14, 09:25
So, for an interesting change of pace, all you currency obsessives should take a break and read this article by Quentin Taylor, a history/poli-sci professor from Rogers State College in Oklahoma, titled "Money and Politics in the Land of Oz." Taylor presents a compelling argument, based on his own research and that of previous scholars, that Baum's The Wonderful Wizard of Oz was, in addition to an enchanting children's story, a political allegory rooted in the Populist movement of the late 1800s, the "free silver" movement and the plight of the rural farmer, and the presidential candidacy of William Jennings Bryant.
The article is available online from multiple websites: http://www.usagold.com/publications/landofoz.pdf and http://www.independent.org/pdf/tir/tir_09_3_6_taylor.pdf
The "yellow brick road"? Symbol of the gold standard. And those ruby slippers we all remember Judy Garland running around in? Well, in Baum's book, they were actually silver slippers. And the Emerald City? None other than Washington, D.C., awash in the color of money. And that's just scratching the surface. The book itself is replete with characters and symbols which scholars have tied to the political and economic issues of the time.
An entertaining examination of a story we're all familiar with through a very different historical lens.
Gold is measured in ounces (oz)...
I have been following this thread since it's creation as I have always had an interest in this subject. My lack of knowledge in this area is the reason I do not comment but I would like to share something with all of you. I was sent this link and was told to start watching at minute 56, yes it is from the infamous Infowars that a large percentage of members here despise.
This link at the minute I am referencing has more to do with his guest, luckily the guest gets to have most of the talking time. I found the guest to be very knowledgeable or at least he sounds to someone with little knowledge in the subject along with what seem to be respectable credentials.
Please take the time to listen starting at minute 56 as the subject matter to which the guest speaks pertains to the topic of this thread.
http://www.youtube.com/watch?v=0jL0VQP0fBI
montanadave
07-08-14, 10:06
Gold is measured in ounces (oz)...
Go to the head of the class!
https://www.youtube.com/watch?v=AJXKVOxqkWM
montanadave
07-08-14, 10:36
I have been following this thread since it's creation as I have always had an interest in this subject. My lack of knowledge in this area is the reason I do not comment but I would like to share something with all of you. I was sent this link and was told to start watching at minute 56, yes it is from the infamous Infowars that a large percentage of members here despise.
This link at the minute I am referencing has more to do with his guest, luckily the guest gets to have most of the talking time. I found the guest to be very knowledgeable or at least he sounds to someone with little knowledge in the subject along with what seem to be respectable credentials.
Please take the time to listen starting at minute 56 as the subject matter to which the guest speaks pertains to the topic of this thread.
http://www.youtube.com/watch?v=0jL0VQP0fBI
James Rickards is definitely a knowledgeable guy and undoubtedly forgets more about economics and monetary policy when he sneezes than I'll ever know, but he's also the ultimate Wall Street insider. And, when listening to insiders telling John Q. Public about what's really going on and what they should be doing to prepare, the skeptical me has to wonder what those insiders know that they aren't telling the public and how they plan to profit by coaxing the herd in one direction or the other. It's wheels within wheels with these guys.
Don't forget Rickards was one of the key players in negotiating the first of all the federal bank bailouts to come when Long Term Capital Management went off the cliff back in 1998. LTCM was one of the first huge hedge-funds making money hand-over-fist on all manner of sketchy financial instruments, many of which would be the same shitty bag of tricks that took the economy over the cliff in 2008. LTCM was making the rich guys richer until they rolled snake-eyes, saw a black swan, pick your metaphor, and than got bailed out by the Federal Reserve to avoid a broader financial meltdown. Sound familiar?
He's a smart guy, no doubt. And I wouldn't trust him as far as I could throw him.
That's Dave, since I have little knowledge in this topic and your feedback was exactly what I was looking for in regards to Rickards.
montanadave
07-08-14, 11:06
That's Dave, since I have little knowledge in this topic and your feedback was exactly what I was looking for in regards to Rickards.
Hey, the guy could be spot on. Just do your homework. I'm a little jaded at this point and have probably become too cynical for my own good.
Thanks murphman for the link. It was worth the time to hear the perspective the guest put forth. Interesting comments and insight for sure from one of the master manipulators himself.
Thanks Dave for insight into Rickards background.
I'm really appreciating the links, advice and perspectives being offered here. I started the thread in an attempt to wrap my head around this issue and slowly getting a better (and scarier) idea of how screwed we are - whether it's sooner or later.
Crow Hunter
07-08-14, 14:43
We aren't screwed. Even if the dollar completely loses it's status as the reserve currency of choice of world governements it won't be the end of the world. None of the other countries of the world have their currency as the world reserve currency now and they aren't in the midst of a Mad Max scenario now. Heck, some of them are pretty nice places to live.
It will change how we tax and spend (more of the burden for government spending will shift to US tax payers vs foreign investors ) but the world will not end. We won't go to a 3rd world country status. You won't have to use your guns to defend your stash of seeds.
We will likely become more like European countries. Everyday people will get taxed more and receive less. It won't be pretty in that the standard of living of most of the FSA will go down significantly as will that of most everyone else. Houses will be smaller, not everyone will have cars, TVs will be smaller, etc.
We won't be able to sustain our military presence overseas and we won't be giving money away to everyone in the world and illegal immigration will finally be stopped when people start having to really pay through the nose on taxes to support non-tax paying illegal aliens.
Heck, it might not be such a bad thing.;)
Since this is a fundamental change for the world economy, the big players aren't really going to want to undermine the US currency too quickly. NATO doesn't want to be stuck doing their own heavy lifting, no one wants to become the new illegal alien immigration target of choice, etc.
http://www.zerohedge.com/news/2014-07-14/anti-dollar-alliance-prepares-launch-brics-bank
The main impact of reduced status of the Petro Dollar is less ability to float trash currency on the market. It would either accelerate consumer purchasing inflation if the Fed keeps pumping, or reduce Federal borrowing and spending and result in further contraction/recession which be healthier for us.
It it lead to widespread abandonment of the PD then we could spiral into much deeper recession and turmoil. No monopoly lasts forever, so eventually other countries WILL develop alternatives for their trading.
Looks like the BRICS inked the deal...
http://www.zerohedge.com/news/2014-07-15/brics-announce-100-billion-reserve-bypass-fed-developed-world-central-banks
then go live there for a while and let me know !
sorry don't want to live like China or India and don't want to live like England either !
half my relatives live in Europe and does not sound like a place I want to live at all
not sure what is nice about video every where no way to protect yourself you can't even buy a pointy kitchen knife and they want to give more power to islamics than there own people ! which won't end well
tell me whats so nice about these places you claim ? and if they are so nice why are you not living there ?
We aren't screwed. Even if the dollar completely loses it's status as the reserve currency of choice of world governements it won't be the end of the world. None of the other countries of the world have their currency as the world reserve currency now and they aren't in the midst of a Mad Max scenario now. Heck, some of them are pretty nice places to live.
Looks like the BRICS inked the deal...
http://www.zerohedge.com/news/2014-07-15/brics-announce-100-billion-reserve-bypass-fed-developed-world-central-banks
You might want to check out www.Alt-Market.com they have a interesting article up about N11..The next 11 countries to form another BRICS.. The noose around the dollar is tightening quickly...
FlyingHunter
07-16-14, 06:35
As the petrodollar declines in influence, what will be the impact to Gold prices?
As the petrodollar declines in influence, what will be the impact to Gold prices?
I figure they're going to go up..silver as well, Alt-market had a article up last week about how Mexico is supposedly going to launch a silver backed currency, Any country that launches a currency backed by something tangible like gold, silver, will probably gain a lot of investment, The main idea among BRICS nations, and the N11 is the same..dump the U.S. dollar... And by doing so, they take the printing press away from the FED, this, severely limits the U.S.'s influence worldwide, as well as our ability to start wars with anybody who disagrees with U.S. policy.. If these efforts are successful,(and considering the amount of hatred for the U.S. world wide, there's no reason to think they won't be) The U.S. will end up like the England, Spain, France, Portugal, and other "Has been's" in history, One time great countries, who were denutted by their own stupidity, greed...
Crow Hunter
07-16-14, 12:56
then go live there for a while and let me know !
sorry don't want to live like China or India and don't want to live like England either !
half my relatives live in Europe and does not sound like a place I want to live at all
not sure what is nice about video every where no way to protect yourself you can't even buy a pointy kitchen knife and they want to give more power to islamics than there own people ! which won't end well
tell me whats so nice about these places you claim ? and if they are so nice why are you not living there ?
When I say nice places to live, I don't mean they are America or that I would choose them over America. My family has been here too long (1640's).
They may not have our liberal gun laws but they aren't 3rd world shitholes either.
I am saying that just because our currency is no longer the world reserve currency, we won't suddenly turn into Honduras or Somalia.
We won't live as high on the hog as we do now, but we won't be fighting over garbage to eat either.
Everyone seems to think that the dollar losing status as the world reserve currency will result in a Zombie Apocalypse or The Road.
It won't. Even if it happens suddenly, and it won't, life will pretty much go on exactly the same way as it does now other than the tax structure will change and stuff made overseas will cost Americans more. Wal-mart will not be China-mart anymore. Wal-mart and other large corporations will source goods from countries in which the cost of labor is lower.
It won't be as easy on everyone as it is now but the USD has not always been the world reserve currency and we shouldn't expect it to be forever in the future. China is where we were at the turn of the 20th century just as we are where England was, just like England was when Spainish Dollars were dominant and I am sure you could go all the way back to Greek Denari or earlier. None of those countries ceased to exist or became 3rd world Mad Max meets The Road Apocalyptic wastelands when other countries decided that their currency was no longer the primary medium of exchange.
If it is something that people are really seriously worried about, they should be buying unhedged soverign bonds from foreign countries and assets in foreign corporations that derive their income from non US sources, not speculating in gold or silver. Gold and silver are non productive rocks that people dig up out of the ground, melt down and then put back into the ground and pay people to guard (to paraphrase Buffett). They don't actually make or create or sell anything.
Don't forget though, this has all happened before and sometimes didn't happen at all, even when predicted. Just look back at all the scare about the Japanese take over of the world economy and pushing the US into the back burner in the 1970's and 80's. See where that went?;)
Crow Hunter, I am glad you're bringing some optimism to this thread :)
I don't think that the USA will turn into Somalia as a whole if the USD melts into the sunset. Some areas will get bad and you'll see looting and civil unrest probably to some extent everywhere.
Our standard of living will drop significantly whe the USD melts. When the USD looses value, and don't kid yourself it will loose value when it's status of world reserve currency changes, our ability to purchase goods drops. We don't make much in the USA and in many cases spinning up factories to make stuff will take time. Heck we don't even grow most of our foods. Ever see where your fruits and vegetables come from. The situation would be bad till we adjusted and began making stuff locally from local resources or we find something as valuable as the USD to trade for OUS goods. Maybe wheat and corn can become the next trading currency for the US. Bushell of wheat for a barrel of oil. All that delta going and spinning up new industry will take time and the USA won't be a happy place while that's going on.
Moose-Knuckle
07-16-14, 16:22
The average American house hold sits down to eat dinner around the table with food they purchased at their local grocery store. The components of said meal were trucked in on average from over 1500 miles away.
Not if but when the US economy goes critical mass things will go pear shaped FAST.
"Civilization: a thin veneer over barbarianism." ~John M. Shanahan
The article on zerohedge about the official deal with BRICS is an official green light towards the end for me.
Sent from my iPhone using Tapatalk
Crow Hunter
07-16-14, 18:12
Crow Hunter, I am glad you're bringing some optimism to this thread :)
Glad I could help.:D
I just don't want people to go off the deep end and sink all their money into speculative assets they may result in them having to eat cat food in retirement.
I don't have any problem with people hedging their bets and getting a little gold or silver (less than 10% of total assets) or purchasing some land and buying guns and ammo. I think that is all a good thing.
I don't want people to panic thinking that this is going to be the end of the world (if it even happens in our lifetimes) and costing themselves in the long run.
The likelihood of most of us on this board having to work well past 67 years old because we didn't purchase enough productive assets during our working years is significantly higher than the chance that every government and corporation in the world suddenly stops believing in the "full faith and credit" of the US government at exactly the same time and picks an alternative (or even a basket of alternative) currencies available today as its replacement and the USD turns into the Zimbabwean Dollar.
Buying gold and silver or any other commodity is pure speculation. It isn't an "investment". It doesn't have any return unless someone wants to buy it from you for more than you paid for it. It is very akin to gambling and, like gambling, it turns out bad more often than good.
Commodities don't produce anything. They don't pay dividends. They don't make Iphones. They don't develop cancer cures. They don't hire people. They just sit there and when you buy it, you hope that no one finds a way to get more cheaper than what you paid for it so it will retain its value and that people will continue want it more than you do.
That of course is another problem with gold. Assuming it DOES go up in value AND assuming that it is legal to sell or be used to pay debts (which it won't be), are you going to be willing to let go of such a precious commodity to buy a TV? Especially if you hold onto it for another month or 2 you could buy a car. If you hold onto it a year, you might be able to buy a house with it and so on.... (That is why commodity based currencies always get changed over to fiat, deflation destroys economies much worse than inflation)
Being prepared is one thing. Potentially throwing your future into the toilet on a bet is a bad idea and I don't won't guys here to be selling their gun collections in retirement to fund cat food purchases for meals.
The article on zerohedge about the official deal with BRICS is an official green light towards the end for me.
Sent from my iPhone using Tapatalk
You might want to go back and read up on what fearless leader(Obumbo) did today...It seems that the Europeans weren't being tough enough on the Russians (I can only guess it might be because they like to stay warm in the winter) and he went for another round of sanctions against the Russians.. If you own a AK, well, don't expect to see any more from Russia.. Kalashnikov Concern was one of the named firms banned... Actions like this only cement the BRICS nations together more tightly.. They're not going to drop the dollar, today, tomorrow, or in the near future, I agree with Crow Hunter on that, But you can bet you ass it's coming... In the meantime, Exon-Mobil might have just lost their chance to drill in Russia.....
Seems like something new everyday with the (seemingly) accelerating cooperation of BRICS. Now this:
Chinese leader woos Latin America with deals
Brasilia (Brazil) (AFP) - China's president pressed a charm offensive with Latin America on Thursday, signing deals with Brazil, meeting regional leaders and proposing a $20 billion infrastructure fund that highlights Beijing's growing interests in the region.
Xi then met behind-closed doors with a dozen Latin American and Caribbean leaders, including Cuba's communist President Raul Castro.
After the summit, Rousseff said China proposed the creation of a $20 billion fund to finance infrastructure projects in Latin America and the Caribbean.
He also offered a credit line of up to $10 billion to nations of the Community of Latin American and Caribbean States (CELAC).
In addition, a Chinese-Latin American cooperation fund of $5 billion would be set up for investments.
China's massive purchases of commodities and exports of manufactured goods to the region have boosted its two-way trade with Latin America to a total of $261.6 billion last year, according to official figures.
Another brick in the wall.
http://en.itar-tass.com/economy/744084
Russia, China agree on national currency swaps
The Russian and Chinese monetary regulators have agreed a draft document on national currency swaps, the Central Bank of Russia said on Thursday.
“The draft document between the Central Bank of Russia and the People’s Bank of China on national currency swaps has been agreed by the parties” and is at the stage of formal approval procedures, the Russian regulator’s press office said.
“We have reached a high degree of readiness for ruble-yuan swaps to facilitate trade financing,” the Russian Central Bank chief said in early July.
http://www.zerohedge.com/news/2014-08-09/de-dollarization-accelerates-chinarussia-complete-currency-swap-agreement
De-Dollarization Accelerates - China/Russia Complete Currency Swap Agreement
The last 3 months have seen Russia's "de-dollarization" plans accelerate. First Gazprom clients shift to Euros and Renminbi, then the UK signs currency swap agreements with China, then NATO ally Turkey cuts ties and mulls de-dollarization, Switzerland jumps in the currency swap agreements, and BRICS create their own non-US-based funding vehicle, and then finally this week, Russia's oligarchs have shifted cash holdings to Hong Kong. But this week, as RT reports, Russian and Chinese central banks have agreed a draft currency swap agreement, which will allow them to increase trade in domestic currencies and cut the dependence on the US dollar in bilateral payments. “"The agreement will stimulate further development of direct trade in yuan and rubles on the domestic foreign exchange markets of Russia and China," the Russian regulator said.
And as we have explained repeatedly in the past, the further the west antagonizes Russia, and the more economic sanctions it lobs at it, the more Russia will be forced away from a USD-denominated trading system and into one which faces China and India.
Glad I could help.:D
I just don't want people to go off the deep end and sink all their money into speculative assets they may result in them having to eat cat food in retirement.
I don't have any problem with people hedging their bets and getting a little gold or silver (less than 10% of total assets) or purchasing some land and buying guns and ammo. I think that is all a good thing.
I don't want people to panic thinking that this is going to be the end of the world (if it even happens in our lifetimes) and costing themselves in the long run.
The likelihood of most of us on this board having to work well past 67 years old because we didn't purchase enough productive assets during our working years is significantly higher than the chance that every government and corporation in the world suddenly stops believing in the "full faith and credit" of the US government at exactly the same time and picks an alternative (or even a basket of alternative) currencies available today as its replacement and the USD turns into the Zimbabwean Dollar.
Buying gold and silver or any other commodity is pure speculation. It isn't an "investment". It doesn't have any return unless someone wants to buy it from you for more than you paid for it. It is very akin to gambling and, like gambling, it turns out bad more often than good.
Commodities don't produce anything. They don't pay dividends. They don't make Iphones. They don't develop cancer cures. They don't hire people. They just sit there and when you buy it, you hope that no one finds a way to get more cheaper than what you paid for it so it will retain its value and that people will continue want it more than you do.
That of course is another problem with gold. Assuming it DOES go up in value AND assuming that it is legal to sell or be used to pay debts (which it won't be), are you going to be willing to let go of such a precious commodity to buy a TV? Especially if you hold onto it for another month or 2 you could buy a car. If you hold onto it a year, you might be able to buy a house with it and so on.... (That is why commodity based currencies always get changed over to fiat, deflation destroys economies much worse than inflation)
Being prepared is one thing. Potentially throwing your future into the toilet on a bet is a bad idea and I don't won't guys here to be selling their gun collections in retirement to fund cat food purchases for meals.
Good info, thanks.
I've been thinking of buying silver in small amounts ( a local store sells them). Would that be a good way to start diversifying? Or is it a pure gamble?
My own arguement is, would it be better if I save more money (obviously in dollars) or buy silver/gold? Since the Dollar is always depreciating, wouldn't it be better to invest some of your money now in precious metals?
For example, would $2k worth of silver bought now be worth more than $2k cash in 2years? Seems like the answer is pretty obvious, but I could be wrong.
Good info, thanks.
I've been thinking of buying silver in small amounts ( a local store sells them). Would that be a good way to start diversifying? Or is it a pure gamble?
My own arguement is, would it be better if I save more money (obviously in dollars) or buy silver/gold? Since the Dollar is always depreciating, wouldn't it be better to invest some of your money now in precious metals?
For example, would $2k worth of silver bought now be worth more than $2k cash in 2years? Seems like the answer is pretty obvious, but I could be wrong.
I don't think It'd be a bad idea to invest some of your money in silver...Note I said some of your money.. not all of it, Like any other investment it's a gamble, so I wouldn't invest any more than you could afford to lose.. buying from the local guy.. That depends, what do you want? 99.9% silver coins, bars? junk silver? (U.S.coins quarters, dimes, half dollars, dollars, Minted before 1964 ) you'll need to do some research, what's the local guys spot price vs what you can find on the web? and figure in shipping, that can be a real killer these days. Junk Silver may be the cheapest way to get into silver, typically these coins are bought for their silver content (90%) rather than condition, Again, do a little research before you jump in.. Some people I've met buy junk sliver with the idea of using it for barter in the event of a currency collapse.. Myself, I figure in that type of event you'll be better off with a stock of food, guns, ammo, and if possible live far enough out of town so that you could raise your own garden and possibly livestock......
Crow Hunter
08-11-14, 09:15
Good info, thanks.
I've been thinking of buying silver in small amounts ( a local store sells them). Would that be a good way to start diversifying? Or is it a pure gamble?
My own arguement is, would it be better if I save more money (obviously in dollars) or buy silver/gold? Since the Dollar is always depreciating, wouldn't it be better to invest some of your money now in precious metals?
For example, would $2k worth of silver bought now be worth more than $2k cash in 2years? Seems like the answer is pretty obvious, but I could be wrong.
I wouldn't put more than 10% of my net worth in anything like that. Personally I wouldn't put anything in gold/silver/copper for investment purposes. I am wanting to buy some gold and silver coins to play with just because I have always wanted some to play with. My gold and silver coin won't be considered part of my investment portfolio.
If it were one of the best investments out there and had this incredible future of constant increases in value and you owned it (dealer), would you be selling it?;)
The problem with gold and silver or any commodity for that matter is that they only go up in value when someone wants to buy it from you for more than you paid for it (or it is a high use item like oil) or someone discovers a new industrial use for it. The dollar might not always be depreciating (inflation) it might be flat (no inflation) for a long time or go the other way (deflation). The reason that the Fed has been dropping interest rates for so long is to fight deflation as much as "stimulate" the economy and they might be winning or they might lose. Now over the long term, since inflation is better for the economy and since most governments are targeting inflation, a stash of gold/silver might be a good anchor on your portfolio as they will usually move up in tandem with inflation and hedge it. But you will never beat inflation in the long run using gold/silver and that is why you need to limit it to less than 10% of your overall portfolio IMHO.
For example, would $2k worth of silver bought now be worth more than $2k cash in 2years? Seems like the answer is pretty obvious, but I could be wrong.
It could. Then again, it could not. Go to Apmex and look at their historical charts. There was a significant runup in the last few years but also a significant drop and prior to the run up it was basically flat for decades. There is no guarantee that it will go up in the future.
Just like oil (or other commodities), if the price goes up high enough someone will figure out a way to get to it cheaper. When Gold gets high enough that figuring out a way to get it out of seawater becomes feasible it could be worth next to nothing.
For investing, you will be better off buying a good Total Market index fund than gold/silver/copper. The stock fund will throw off dividends every quarter and you will participate in any type of new venture. Like when a company figures out a way to extract gold from seawater or creates the next Iphone or discovers a cure for cancer or obesity. You will also participate in the profit.
Also keep in mind that for tax purposes Gold/Silver are cosidered "collectibles" and when you sell them you will need to report the profit to the IRS and pay income tax on it. Which will be higher than if you had sold an equivalent amount of appreciated stocks/bonds which would be taxed at a much lower Long Term Capital gains tax rate. You could probably get by without reporting a small gain here or there but if you are making the serious gain that people are predicting and you don't report it, they WILL find out.;)
If it makes you sleep better at night to own gold/silver (or guns ammo and land in my case:cool:)then do it, just don't go all in. Diversify.
That is what it is all about, sleeping well at night.
http://www.bloomberg.com/news/2014-09-23/moscow-s-mr-yuan-builds-china-link-as-putin-tilts-east.html
Gazprom Sales
China agreed to prepay for supplies, which are scheduled to start in 2018, to help state-run OAO Gazprom (OGZD) finance the construction of the pipeline that will carry the fuel to the border. Introducing yuan payments into the gas business would lead to an exponential rise in trading in the Chinese currency in Moscow, the people said. China is already Russia’s largest trading partner, with turnover of $89 billion last year, according to Russian customs data, and Putin has set a goal of reaching $100 billion next year.
Vladimir Putin has a secret agent in his campaign to curb the impact of sanctions on Russia’s economy: Mr. Yuan.
That’s what skeptical bankers started calling Igor Marich after he introduced yuan trading in Moscow in 2010, when Russia became the first country outside China to offer regulated renminbi purchases. Now, as sanctions from the west over the conflict in Ukraine prompt more Russian companies to look east for growth, Mr. Yuan has become something of an honorific.
The yuan-ruble trade on the Moscow Exchange, where Marich runs money markets, has jumped 10-fold this year to $749 million in August, though still a sliver of the $367 billion in dollar-for-ruble sales. Yuan buying hit a then-peak of 666 million yuan ($109 million) on July 31, when the European Union penalized Russia’s largest banks, OAO Sberbank (SBER), VTB Group and OAO Gazprombank, over Putin’s support for Ukraine’s insurgency. With EU and U.S. sanctions in place and ties with China deepening, daily trading will soon reach 1 billion yuan, Marich said.
“I believe we can see this result within a year,” the 40-year-old sports enthusiast said in an interview at the exchange in central Moscow, where he started working in 2000, the same year Putin became president.
Marich’s goal may come sooner than he thinks. Russia is considering accepting yuan for gas under the $400 billion, 30-year supply deal that China signed during Putin’s visit to Beijing in May, according to four senior Russian officials and executives who asked not to be identified because a final decision hasn’t been made.
Gazprom Sales
China agreed to prepay for supplies, which are scheduled to start in 2018, to help state-run OAO Gazprom (OGZD) finance the construction of the pipeline that will carry the fuel to the border. Introducing yuan payments into the gas business would lead to an exponential rise in trading in the Chinese currency in Moscow, the people said. China is already Russia’s largest trading partner, with turnover of $89 billion last year, according to Russian customs data, and Putin has set a goal of reaching $100 billion next year.
Gazprom and its Chinese partner, China National Petroleum Corp., the country’s biggest oil and gas producer, have so far declined to comment on the financial details of the accord.
Under Putin, Russia has moved to end what he’s called the “dollar monopoly” that allows the U.S. to act like a global economic “parasite.” The U.S. debt binge that triggered the worst financial crisis since the Great Depression six years ago exposed the need, according to Putin, for a counterweight to the U.S.-led International Monetary Fund and World Bank. The issue became more acute after Putin’s annexation of Crimea in March sparked the first round of sanctions.
BRICS Bank
In July, 70 years after the Bretton Woods agreement formed the Washington-based IMF and World Bank, Putin and his BRICS counterparts from China, India, Brazil and South Africa created their own development lender and reserve fund with the equivalent of $200 billion of combined capital.
Iranian Yuan
After flying to the Chinese capital for talks with his counterpart, Melnikov, who now heads the Russian-Iranian Council at the Russian Chamber of Commerce, said he traveled to the northern city of Heihe and was “astonished” by the amount of cross-border trade -- 20 Il-76 cargo planes filled with Chinese goods flying into Russia from Beijing every day.
“I asked our businessmen how they paid for their goods and they replied, ‘We bring cash in our pockets,’” Melnikov said. “That’s not the safest way of transferring funds, you know, so I thought we should help these Russian and Chinese businessmen use rubles and yuan instead of cash dollars. We signed our first agreement, on settlements in national currencies in border trade, in 2002.”
The opportunities now for Russia to expand with China and other countries using the yuan, such as Iran, are “enormous,” according to Melnikov.
China is the largest importer of Iranian oil, and it pays in its own currency. As a result, Russian companies exporting to Iran are starting to accept yuan, he said.
Good info, thanks.
I've been thinking of buying silver in small amounts ( a local store sells them). Would that be a good way to start diversifying? Or is it a pure gamble?
My own arguement is, would it be better if I save more money (obviously in dollars) or buy silver/gold? Since the Dollar is always depreciating, wouldn't it be better to invest some of your money now in precious metals?
For example, would $2k worth of silver bought now be worth more than $2k cash in 2years? Seems like the answer is pretty obvious, but I could be wrong.
Think of them like a retirement account. Something you won't touch for nearly forever. It's the only thing that can't ever be worth 0. The % is up to you.
Crow Hunter
09-24-14, 09:55
The dollar has recently been Appreciating fairly significantly against other world currencies.
That is one of the big reasons that gold/silver/oil has been dropping in price (after I bought some of course:mad:) over the last several months even though there is quite a bit of global instability out there.
While it looks like Putin and China may be trying to work out a deal to get around trade restrictions, the rest of the world still feels like the US dollar is the better bet. Even with our central bank trying their best to keep it from happening.
That is why I think that even though the USD will eventually be surpassed as the world reserve currency, it won't happen in any of our lifetimes without some significant and fundamental change in the way the US or other countries are governed.
The dollar has recently been Appreciating fairly significantly against other world currencies.
That is one of the big reasons that gold/silver/oil has been dropping in price (after I bought some of course:mad:) over the last several months even though there is quite a bit of global instability out there.
While it looks like Putin and China may be trying to work out a deal to get around trade restrictions, the rest of the world still feels like the US dollar is the better bet. Even with our central bank trying their best to keep it from happening.
That is why I think that even though the USD will eventually be surpassed as the world reserve currency, it won't happen in any of our lifetimes without some significant and fundamental change in the way the US or other countries are governed.
The only thing I'm sure of is that it will happen. When is anybody's guess. Truth be told WILL be a world war over it. We took out Saddam for selling oil in gold and euros I believe. We sanctioned Iran for it.We manufactured the uprisings in Libya and Syria for the SAME end result due to a war weary public Gaddafi had plans for a gold backed dinar. Assad was selling oil for gold and euros as well. Also, Qatar wants to run natural gas pipelines through Syria to Europe and through Iraq, Iran Afghanistan and Pakistan to India.
So the manipulation of actual money (gold/silver/etc.) continues as the current economic system erodes faster and faster and faster...
Money vs. currency here for those inclined or unsure...
Dude in video is a salesman - I get that. However, the basic message is accurate...
https://www.youtube.com/watch?v=DyV0OfU3-FU
http://www.jsmineset.com/2015/07/24/1-99-per-pound-filet-mignon-and-war/
This past Sunday night and Monday’s action in gold needs to be discussed of what I believe is now a rapidly moving big picture. $2.7 billion worth of gold futures were sold in just 2 minutes Sunday night. As I have asked before, “who” could possibly “own” this much gold other than an official source? The answer of course is nearly no one other than a very small handful of ETF’s. In perspective, $2.7 billion worth of gold is roughly 3% of global production. Said differently, it amounts to nearly 10 days worth of labor and production worldwide… sold in less than two minutes!
Next, assuming there really is an entity that owns this much gold, “who” in their right mind would sell it in this fashion? Who would sell so much and so rapidly concentrated in time as to knock the price down $50? What trader would still have a job the following day if their own sale created a drop of four percent in the proceeds received? Traders today fight over one thousandth of a percent, are we to believe a trader was willing to give up 4%? Was this trader so “scared” that gold was going to drop Mondaythat he just “had to get out”? No, it is obvious to even the most disingenuous, this was purely an “operation”, one meant to depress the price of gold at any cost. In perspective, this trader by not spacing out the trade cost his “firm” $40 million if you only use the midpoint of the trade. Will this be reflected in his year end bonus (sarcasm)? As of today, finally, the hunt is on as to “whodunit” http://www.zerohedge.com/news/2015-07-23/hunt-mystery-gold-bear-raid-leader-begins ???
Switching over to silver, the low prices have again created havoc in the physical market. Prior to Sunday, the U.S. mint had already suspended sales of Silver Eagles. This was done for one of only two possible reasons. 1. demand was so great they could not keep up with it or 2. they could not source physical silver to mint the coins. This is exactly akin to Venezuela’s toilet paper shortage. They have mandated a retail price below what it can be produced for and thus …manufacturers have stopped making it because they cannot earn a profit.
From a broader perspective, what I believe we are seeing is simply one “skirmish” (but at the very core) in a global financial war between the West and the East. We now know several other pieces to the puzzle. China, the leader of the East is clearly economically slowing down as evidenced by many recent statistics, the container trade numbers being most recent;
As a theory, most believe the 600 tons of gold announced by China last week was the reason for the Sunday/Monday drop. This I believe is correct but for 180 degree wrong reasons. Many were shocked and disappointed at the number of only 600 tons. It truly is laughable as it represents about 3 months worth of gold China currently imports and has been for over 5 years. I believe they made this announcement for two reasons. First, they needed to show more gold in order to be considered by the IMF for inclusion into the SDR this fall. I also believe they wanted to show a lower number so as not to spook gold higher as they are clearly a buyer each month. If you are a buyer, why press the price higher as long as you are receiving delivery?
Going a step further and tying this all together we can see several things happening. China is now witnessing an unprecedented capital outflow while the U.S. dollar has gotten stronger. A strong U.S. dollar is textbook warfare against Russia and aimed at tightening the screws further both financially and economically.
If you look at this from the standpoint of “war”, these are all chess moves between those issuing a fake currency and those wanting to do real trade with real settlement. Did the U.S. just “punish” China for being a gold buyer and making an announcement (even though miniscule)? I think this can be looked at as the Western banks are short paper gold derivatives and long dollars whereas the East is long real metal and desirous of leaving the Western banking system behind. There is no other reason China and Russia would have set up trade banks, clearing systems, currency hubs etc. all over the world if they did not expect to use them. This is a war between the West wanting to prolong their own current fiat system and the East wanting to move away to one that is equitable to all involved.
We are already in WW III. It is because of and being waged in financial assets. It is clear to me the U.S. is in panic mode and trying to break the long term bull trend in gold. If the trend cannot be broken, the dollar will be zeroed out. Unfortunately, both sides know this full well. The military warnings of late from both Russia and China have become much louder and the actions and movements by the U.S. (staging in Turkey for Syrian raids for example) much more dangerous. As I see it, the U.S. “needs” war to cover many dirty financial tracks. China/Russia on the other hand may try to prevent war by releasing “the truth” and thus crippling the U.S. financially and thus the ability to wage aggression.
Let me finish with a couple of questions. Who do you believe is more levered, the East or the West? Yes, China is levered and unquestionably going to suffer short term during the unwind. Xi Jinping said this himself. Who has a financial system layered with trillions of dollars in derivatives? Which direction has physical gold been flowing for at least a decade? Finally, what is the “real” price of gold or silver? Is it what the paper exchanges say? Or is it what it actually costs to purchase …in size? I believe we will find out all of these answers and many more over the next few months. The entire world will be shocked to its core when nearly everything we have come to believe in turns out to have been a Hollywood production of “Wag the Dog”! I pray there will be “options” available to the West, though deep down I know this is not the case.
Crow Hunter
07-25-15, 20:18
I am holding the greatest investment in the world. It is 100% guaranteed to survive the coming destruction of the fiat petrodollar and make you rich.
I am such a great guy that I will give some to you, in exchange for your soon to be worthless toilet paper $USD, even though I know, beyond a shadow of a doubt that it will be worthless to anyone and will lose value, because I am such a great guy and all....;)
Anyone see logic in this?
Now if the guy said he would only take guns, ammo, land, food, tools, vehicles, gas in exchange for his shiny rocks, then he might be a little more believable.
MountainRaven
07-25-15, 20:38
I believe that the term is, "Useful idiot."
Anyone who believes that China and Russia want a system that is anything close to equitable needs to spend less time listening to their puppets.
If you really want to be ready for the "impending collapse" of society, buy bullets and beans. More importantly, cultivate friendships - or at least positive relationships - with your neighbors and learn a trade, like carpentry or automotive mechanics. Then you'll be able to take the shiny rocks from the guys who spent their cash on them.
Forget the golden rule (he who has the gold makes the rules) - remember the iron rule (he who has the guns makes the rules) and the riddle of steel (even the finest tools are secondary to training, drive, and mindset).
I believe that the term is, "Useful idiot."
Anyone who believes that China and Russia want a system that is anything close to equitable needs to spend less time listening to their puppets.
If you really want to be ready for the "impending collapse" of society, buy bullets and beans. More importantly, cultivate friendships - or at least positive relationships - with your neighbors and learn a trade, like carpentry or automotive mechanics. Then you'll be able to take the shiny rocks from the guys who spent their cash on them.
Forget the golden rule (he who has the gold makes the rules) - remember the iron rule (he who has the guns makes the rules) and the riddle of steel (even the finest tools are secondary to training, drive, and mindset).
I don't for one second believe China or Russia want an equitable system - no more than those who pull the strings in the West would want one. This is a power play nothing more. Once one fiat system fails, another will be put in play initially backed by tangible wealth (precious metals, resources, land, etc.). This system will eventually transition back to fiat and the cycle will repeat.
Once one fiat system fails, another will be put in play initially backed by tangible wealth (precious metals, resources, land, etc.). This system will eventually transition back to fiat and the cycle will repeat.
For anyone that hasn't read monetary history, they always do.
Another country trying to expand its options. Hmm. A collapse and choices of fiat currency based by promises (US Dollar) and gold (Chinese Yuan) - tough choice for the world. Especially if the Petrodollar is dumped.
http://www.bloomberg.com/news/articles/2015-11-09/china-to-allow-direct-conversion-between-yuan-and-swiss-franc
China took another step to boost the yuan’s global usage, saying it will start direct trading with the Swiss franc, as the nation pushes its case for reserve-currency status at the International Monetary Fund.
The link will start on Tuesday, the China Foreign Exchange Trade System said in a statement, making the franc the seventh major currency that can bypass a conversion into the U.S. dollar and be directly exchanged for yuan. The rate will be allowed to fluctuate a maximum 5 percent on either side of a daily fixing, according to CFETS.
The idea of the petrodollar only covers a portion of the US financial hegemony in the world. It is not the only pillar in what makes the US economy so diversified with other gigantic pillars.
Forget everything you learned in school (shouldn't be hard, as that wasn't much), and everything you're hearing from pressttutes and Russian foreign intelligence service fronts about petrodollar and new currencies to replace the dollar, as they are ignorant of the reality, and designed to scare people into making really bad or rash financial decisions.
What is the largest pillar of the US economy? Why is the dollar so much more powerful than other currencies?
Let's look at characteristics of the United States to better understand this:
1. The US is the only Nation in the world who has no natural enemies at its borders, and is in complete control of the seas around it, let alone all the choke points for international trade around the world.
2. The US has the most valuable real estate in the world, with the most vast connected river network anywhere, with more deep sea ports connected to that river network.
3. The US is located in a temperate zone, not tundra or tropics.
4. The US is the largest breadbasket in the world, with the Ukraine a distant 2nd, and the European steppe 3rd.
5. The US is the largest exporter/importer in the world.
6. The US has vast infrastructure, based on riverine and coastal geography, then railroads, then highways, waterways, 3 major mountain ranges, vast hydroelectric plants feeding power to the underlying civilizations, with almost countless cities numbering in 1 million or more inhabitants. There is no other place on earth with as many international airports, let alone municipal airports.
7. The US has the 3rd largest population behind China and India, both of which are 3rd world human feces sesspools. The US population has a vibrant young demographic, which is able to support the elderly, unlike China, Russia, or Europe.
What do these facts mean for global economy?
1. When markets get volatile around the world, foreign investors, Russian kleptocrats, and European bankers put their money in the US market, even if it means no rate of return, just to keep the money safe from places like Cyprus, Greece, the Eurozone financial crisis, Chinese economic bubble, etc. Chinese investors were buying up all the US assets they possibly could years ago when they saw that their own nation's assets didn't offer the returns or safety they were looking for.
2. A bad global economy is an inconvenience for the US, and a life-changing event for the 3rd world. Cue the food shortages in North Africa, depression-level unemployment in Southern Europe, and Russian sanctions causing Murmansk whores to not be able to afford their housing.
3. Gold has been declining in value for 2 years straight now. Gold is nothing if you don't have military power, real estate, and the ability to protect your interests. If you're still talking about China as a rising economic force, go visit the 1 billion + peasants outside of the Chinese global economy and see how they're doing, and the absolute fear in Beijing about what to do about it.
4. As the US pulls back its jobs that were transferred overseas to be performed by Asian cheap labor, now to be performed by automated systems in advanced manufacturing plants within the US and the US sphere, China can cough up all the gold they want, and try to trick stupid investors into their cheap currency, but it will not change the reality of who is holding all the chess pieces on this board.
Last time I checked, China doesn't police the world's oceans to make sure that dirtbag little pissant dictators stay in their lane. In fact, China's attempts at naval activity are only destabilizing sea trade among their Asian neighbors, and Japan is not going to sit idly by and let it happen. China can dupe all the morons on the block to back a totally corrupt, tampered currency like the Yuan, but they don't pull the strings when it comes to international finance. The US does.
Is China selling hundreds of billions of dollars to the Gulf Arabs and Suadis, you know, the nations that China would be screwed without if they couldn't buy cheap oil from them, unlike the US, who gets most of our oil from within, then Canada, then Mexico, then Nigeria, Venezuela, and maybe 7% from the Saudis? No, the US supplies the UAE and Saudi Arabia with their defense systems.
China knows they're doomed. They're just trying to lessen the pain of the impending anarchy by concocting these schemes that suck in other saps who are willing to get on board with such a stupid scheme. It's pretty pathetic when you look at it, but you can't blame them. In a nation that relies on exports for well over 95% of its GDP, and only 3% of what they produce is consumed internally, it's bound to fail on a massive scale. That will have global implications like no other. You think the Syrian and Iraqi refugee crisis is bad? Wait until the Chinese refugee crisis blows from what it is now, the 2nd largest source of illegal immigration into the US, into a full on hemorrhage, combined with the North Korean collapse.
Stop reading the Russian propaganda presstitute disinfo though. It's not even amateur in scope.
^ You did read all the posts and links right? I started this thread more or less to explore, educate and obtain new perspectives on a topic that (according to history) will repeat itself (replacement of one dominant currency with another). Regardless, you gave a well thought out response - and I appreciate that.
Without doubt, in a perfect world with a staunch free market capitalist and freedom minded political leadership, the US could unleash its capabilities and stand to prosper quite well in the long run.
However, considering the immense amount of debt combined with an ideology within American politics that is hell bent on instituting the Cloward-Piven strategy - our potential is well for nought if we cannot actually resolve our many issues including our runaway debt. This combined with a major debt issue for all our "partners", it can't continue forever with the magic Keynesian Economics money machines.
I still will not accept it is OK for governments to continue to run at a deficit but not where else in the real world would this be a feasible long term act (whether a business or personal economy).
http://ichef.bbci.co.uk/news/624/media/images/70524000/gif/_70524425_global_debt_total_borrowing_464.gif
Questions for you sir. Do you believe the only way forward is to continue on down the Keynesian path and continue to accumulate debt? If not what might be a solution - you seem well versed in matters? Do you believe this current world policy to be sustainable or do you think it will collapse and mutate into something else?
Regarding your comment below... Yep, I'm aware of both Russian, Chinese, etc propaganda and try and obtain as many perspectives as possible. Thus, why I appreciate you contributing to the thread - I will take that it all in. But, propaganda goes both ways and boy is the US feeding the public a large dose regarding the "health" of our economy.
Stop reading the Russian propaganda presstitute disinfo though. It's not even amateur in scope.
I'm not a fan of Keynesian economics, but one of the biggest mistakes people make with this whole topic is looking at debt to GDP ratios.
If you're going to get an honest assessment of the US economy, you need to treat it like a financial balance sheet, with ASSETS and liabilities, not debt and gdp.
There is no Nation on earth that has assets comparable to the US, just as a matter of reality. As far as propaganda goes, none of the advantages of the US are taught to the populace, especially not from the presstitutes, let alone the union-run schooling institutions. The teachers don't know any of these facts themselves, because they went to public school and received the same skull-punching for 12 years.
The US can afford to take on a lot more debt than any other country, which is where the problem with government spending comes in: They don't know how to manage that dynamic, so they kick the can down the street to the next generation. However, if you compare out current debt to GDP, it is not the highest it has been, but is in a bad place:
http://www.culture-war.info/Nat%20Debt-GNP.gif
What this graph does not show is liabilities to assets. The assets of the United States dwarf most other nations combined. Until you address that, you can't have an educated position on global economy, finance, trends, dollars, etc.
As things get tough for other nations, they are going to put their money where?
*Chinese investors have already been buying US assets and financial products, just to get them out of China.
* Russian billionaires buy homes.....in Malibu and Beverly Hills, while putting their money in the US.
* Foreign governments facing financial strains look to the US for security for their accounts.
What moron wants to put their money in Europe right now? Middle East banks (pay interest up front)? Brazil? Mexico? India? Where? it's one thing to look at a Russian propaganda sensationalist piece for peasant viewership to encourage them to run to the ATM and draw out everything as a form of economic warfare, and another for governments and businesses with assets in the trillions to put their faith in China. At least in the private sector, they have more informed teams of advisors and accountants who track this, and would laugh at the mention of failing economies as good places for investment.
Like I said, shut off the presstitute vomit, and get good intel on finances. Most media outlets are specifically designed to elicit an emotional response from the peasant class, not inform you, and that is especially true with Foxnews, owned by Rupert Murdoch. A classical education is required to make sense of any of this, starting off with geography.
Since Americans don't learn geography, we are very easy to manipulate as a people. If you were to administer a basic test on American geography on this site right now, I suspect the results would be depressing. And now we want to talk about global trade, fiat currencies, petrodollars, financial trends around the world, and forecasting?
Good post LR. Everyone wants to get their panties in a wad about this topic. Delving into it with a decent brain, a sense of history, the ability to sort the wheat from the chaff, and some financial education will give one a much less worrisome picture.
A basic, dumbed down conclusion, without going into the weeds, shows the US could simply be viewed as the most palatable turd in the punchbowl. And being most palatable means it will always be chosen. Could the USA tank, as in another great Depression? Sure, but, once again, the USA would be the most palatable turd in the bowl.
Moose-Knuckle
11-11-15, 00:57
A couple of things . . .
Toward the end of your post you said:
A classical education is required to make sense of any of this, starting off with geography.
Where towards the beginning of your post you said:
The teachers don't know any of these facts themselves, because they went to public school and received the same skull-punching for 12 years.
As a victim of the public education system I have to wonder where exactly one can receive a classical education when the teachers themselves are in fact dumbed down?
As far as propaganda goes, none of the advantages of the US are taught to the populace, especially not from the presstitutes, let alone the union-run schooling institutions.
I categorically agree with this assertion as I view academia as a whole as an indoctrination mechanism.
Like I said, shut off the presstitute vomit, and get good intel on finances. Most media outlets are specifically designed to elicit an emotional response from the peasant class, not inform you, and that is especially true with Foxnews, owned by Rupert Murdoch.
Again agreed but would like to add that FOX News is owned by Fox Entertainment Group a subsidiary of 21st Century Fox which the Murdoch family owns but has big investors like Prince Alwaleed bin Talal of the House of Saud.
Since Americans don't learn geography, we are very easy to manipulate as a people. If you were to administer a basic test on American geography on this site right now, I suspect the results would be depressing.
Back in school I was reigning geography bee champ. One day when I was in third grade I walked into a room where my mother was having a conversation with several other ladies several of which were school teachers. They were discussing the big news of the day about a little something going on in a tiny Central American nation that no one had really heard of before. None of them knew the name as stood there listening to them talk about it and none of them were aware of my presence. I let them go on for a minute or two until I finally said; "Nicaragua". The room went dead silent and they all looked up at me in bewilderment lol.
Moose-Knuckle
11-11-15, 01:00
Everyone wants to get their panties in a wad about this topic.
Pardon me but what exactly is there not to get one's panties in a wad over concerning the US economy, our National Debt, fiat currency, et al.?
So I asked some questions:
Questions for you sir. Do you believe the only way forward is to continue on down the Keynesian path and continue to accumulate debt? If not what might be a solution - you seem well versed in matters? Do you believe this current world policy to be sustainable or do you think it will collapse and mutate into something else?
I got a response to the first. You said you were not a fan but then seem to justify supporting Keynesian Economics 'cuz 'Merica's assets. So its all good because we have the most assets on the block?
I'm not a fan of Keynesian economics, but one of the biggest mistakes people make with this whole topic is looking at debt to GDP ratios.
There is no Nation on earth that has assets comparable to the US, just as a matter of reality. As far as propaganda goes, none of the advantages of the US are taught to the populace, especially not from the presstitutes, let alone the union-run schooling institutions. The teachers don't know any of these facts themselves, because they went to public school and received the same skull-punching for 12 years.
The US can afford to take on a lot more debt than any other country, which is where the problem with government spending comes in: They don't know how to manage that dynamic, so they kick the can down the street to the next generation. However, if you compare out current debt to GDP, it is not the highest it has been, but is in a bad place:
Literally, 6933 summed up your argument in one quick response...
A basic, dumbed down conclusion, without going into the weeds, shows the US could simply be viewed as the most palatable turd in the punchbowl. And being most palatable means it will always be chosen. Could the USA tank, as in another great Depression? Sure, but, once again, the USA would be the most palatable turd in the bowl.
Yep, I'm still concerned too.
Pardon me but what exactly is there not to get one's panties in a wad over concerning the US economy, our National Debt, fiat currency, et al.?
So LRRPF52, how about questions two and three? You still have not offered any solutions? You still have not addressed the likelihood of a collapse and what a possible replacement system may look like.
So far you argument is full throttle ahead - we have assets!
Your comments regarding our assets, etc is obvious. Yes, we have more assets to back our stupidity - I get that. Kind of like the rich idiot with big houses, cars,etc. but up to his eyes in debt and way past his paycheck. How long till his collateral is called due by his debtors? Well, no worries about his biggest holder of debt - himself (i.e the .gov buying their own debt).
What I'm trying to wrap my mind around is how long can this financial kabuki theater last? What might the transition and replacement system look like?
Historical patterns of dominant societies' currency losing favor as it dwindles in financial and moral strength is a bitch of an example to argue against.
Denying that there are not efforts being made by financial players and countries to position themselves might be due to your "superior" education? There are many links in this thread and reports in various media (as you put it "pressitutes" and independents) of countries bypassing the dollar and beginning to do more business in direct currency exchanges. You can argue the "spin" put forth by various sources, but you cannot argue the fact that it is happening.
Crow Hunter
11-11-15, 13:09
<SNIP>What I'm trying to wrap my mind around is how long can this financial kabuki theater last? What might the transition and replacement system look like?
Historical patterns of dominant societies' currency losing favor as it dwindles in financial and moral strength is a bitch of an example to argue against. <SNIP>
Not LRRPF52 but you have some of your answers in your question:
What has happened historically when a dominant reserve currency dwindles?
It has happened multiple times before. It has even happened in our own country. At one time the Spanish Dollar "Piece of Eight" was the dominant currency in not only the world but also in our own country. People used it because there was a serious shortage of official US coinage. (Another problem with specie based currency) Heck, up until the late 1990's our stock market still traded in 1/8ths as a carry over from this currency and the $ symbol is a symbol off of that silver coin.
When the Spanish Dollar faded in prominence and was replaced by the British Pound, what happened? When the US superseded England as the dominant economic powerhouse of the world and the US Dollar became dominant, what happened? Basically some laws were passed and an economic footnote was added into historical texts.
Pretty much the same thing will happen when another currency becomes the dominant one used in world trade.
I can guarantee you that we will not see a collapse of the value of your USD FRN notes and everyone will be using gold and silver coins. Even if the USD becomes completely worthless on the world market, which it won't, as it represents the collective economic power of the entire US population/resources as LR alluded to, the laws will not change. Legal tender will still be legal tender. You will still have to pay your taxes to the USG with FRN and you will still be required by law to take USD to pay debts owed to you. Even if the leaves on the trees have more intrinsic value and no one outside of the continental US will take USD for anything. And, at least historically here in the US, it will be illegal to use gold/silver/other currencies as a medium of exchange.
But, as I (and LRRP) have stated before, until another country manages to get economic power/stability/reliability on par with the US, no one is going to rely on their currency, no matter how bad the US gets in debt. Because everyone else is WAY worse and doesn't have the economic depth of the bench that the US currently holds.
Could we continue on our current trajectory and eventually undermine this status? Absolutely. But, there is A LOT more undermining that will have to happen before we get to that point.
Not LRRPF52 but you have some of your answers in your question:
What has happened historically when a dominant reserve currency dwindles?
It has happened multiple times before. It has even happened in our own country. At one time the Spanish Dollar "Piece of Eight" was the dominant currency in not only the world but also in our own country. People used it because there was a serious shortage of official US coinage. (Another problem with specie based currency) Heck, up until the late 1990's our stock market still traded in 1/8ths as a carry over from this currency and the $ symbol is a symbol off of that silver coin.
When the Spanish Dollar faded in prominence and was replaced by the British Pound, what happened? When the US superseded England as the dominant economic powerhouse of the world and the US Dollar became dominant, what happened? Basically some laws were passed and an economic footnote was added into historical texts.
Pretty much the same thing will happen when another currency becomes the dominant one used in world trade.
I can guarantee you that we will not see a collapse of the value of your USD FRN notes and everyone will be using gold and silver coins. Even if the USD becomes completely worthless on the world market, which it won't, as it represents the collective economic power of the entire US population/resources as LR alluded to, the laws will not change. Legal tender will still be legal tender. You will still have to pay your taxes to the USG with FRN and you will still be required by law to take USD to pay debts owed to you. Even if the leaves on the trees have more intrinsic value and no one outside of the continental US will take USD for anything. And, at least historically here in the US, it will be illegal to use gold/silver/other currencies as a medium of exchange.
But, as I (and LRRP) have stated before, until another country manages to get economic power/stability/reliability on par with the US, no one is going to rely on their currency, no matter how bad the US gets in debt. Because everyone else is WAY worse and doesn't have the economic depth of the bench that the US currently holds.
Could we continue on our current trajectory and eventually undermine this status? Absolutely. But, there is A LOT more undermining that will have to happen before we get to that point.
Excellent points and I agree to a large extent. It is very fascinating to watch the global chess game.
USA as reserve currency=best turd in the bowl.
If the dollar loses status as reserve? The sky doesn't fall, life goes on. Adjustment pains? Sure. End of life in the US as we know it? No.
Nothing to get your panties in a wad over.
Moose-Knuckle
11-11-15, 14:27
USA as reserve currency=best turd in the bowl.
If the dollar loses status as reserve? The sky doesn't fall, life goes on. Adjustment pains? Sure. End of life in the US as we know it? No.
Nothing to get your panties in a wad over.
What is with you and panties lol?
Have you ever played Jenga?
Outlander Systems
11-11-15, 14:46
I have a mint, 1st Print edition Superman Comic Book worth $5,000,000 according to Kovels; however I was only able to get 3.2m on eBay...
An asset's value is dependent upon the counterparty having the desire to purchase the asset and, more importantly, the means to do so.
One man's asset is another man's liability...
Despite claims to the contrary, there isn't a upside to unprecedented debt levels.
What is with you and panties lol?
Can't you tell when you're being phucked with?:cool:
Something about a woman in nothing more than a pair of panties(that are soon to hit the floor).
China welcomes IMF backing to make yuan world reserve currency
http://news.yahoo.com/imf-experts-recommend-inclusion-chinese-yuan-elite-currency-010527771.html
China on Saturday welcomed backing from IMF experts that the yuan should be included in its reserve currencies, saying the move would strengthen the world's financial system.
It now looks likely the yuan will be formally admitted to the IMF's "special drawing rights" currency basket at the end of the month, which would mark a milestone in China's efforts to become a global economic power.
IMF chief Christine Lagarde said the fund now deemed the yuan "meets the requirements to be a 'freely usable' currency" -- a key hurdle to joining the yen, dollar, pound and euro as a leading unit in international trade.
Thought this thread would be a good place to dump this. Ex-GAO head: US debt is three times more than you think. (http://thehill.com/blogs/blog-briefing-room/news/259476-ex-gao-head-us-debt-is-three-times-more-than-you-think)
The former U.S. comptroller general says the real U.S. debt is closer to about $65 trillion than the oft-cited figure of $18 trillion.
Dave Walker, who headed the Government Accountability Office (GAO) under Presidents Bill Clinton and George W. Bush, said when you add up all of the nation’s unfunded liabilities, the national debt is more than three times the number generally advertised.
“If you end up adding to that $18.5 trillion the unfunded civilian and military pensions and retiree healthcare, the additional underfunding for Social Security, the additional underfunding for Medicare, various commitments and contingencies that the federal government has, the real number is about $65 trillion rather than $18 trillion, and it’s growing automatically absent reforms,” Walker told host John Catsimatidis on “The Cats Roundtable” on New York’s AM-970 in an interview airing Sunday...
Crow Hunter
11-16-15, 11:30
Thought this thread would be a good place to dump this. Ex-GAO head: US debt is three times more than you think. (http://thehill.com/blogs/blog-briefing-room/news/259476-ex-gao-head-us-debt-is-three-times-more-than-you-think)
That is kind of silly.
Using the same "accounting" method, if I am completely debt free with $100,000 in the bank and I have a kid, I suddenly have a negative $145,340 net worth? The average cost to raise a child is $245,340 so I have an "unfunded liability" of $145,340 to raise that child.
No one does accounting that way, for good reason. There is no accounting for increased income and the child might not live that long, might not go to college, might be the next child superstar and become a profit center instead of an expense.
It is good to say that "Hey, we just had a kid, we need to cut back or make more money to afford him/her", but you don't count them as debt.
That being said, it is very obvious that we, as a country, have made commitments that need to be honored and I firmly believe that we need to both increase our taxes/tax base to cover them, and take a hard look at what we are currently spending money on.
Paging VD6A...
Would appreciate your perspective on our current situation...
VooDoo6Actual
03-12-16, 21:09
http://i40.photobucket.com/albums/e225/teehee321/Mobile%20Uploads/image_zpszhvv92x0.jpeg (http://s40.photobucket.com/user/teehee321/media/Mobile%20Uploads/image_zpszhvv92x0.jpeg.html)
http://i40.photobucket.com/albums/e225/teehee321/VALIS_zpspyw6l8sg.jpg (http://s40.photobucket.com/user/teehee321/media/VALIS_zpspyw6l8sg.jpg.html)
http://i40.photobucket.com/albums/e225/teehee321/image_zpsmxzsclat.jpeg (http://s40.photobucket.com/user/teehee321/media/image_zpsmxzsclat.jpeg.html)
Figure it out yet ?
http://i40.photobucket.com/albums/e225/teehee321/Trinity%20%20_zpsripqfqpg.jpg (http://s40.photobucket.com/user/teehee321/media/Trinity%20%20_zpsripqfqpg.jpg.html)
^ I'm tracking more and more every day.
VooDoo6Actual
03-13-16, 11:20
You wouldn't be too far off w/ researching 1962 version of The Manchurian Candidate's plot & note the parallels & that Oscar Wide's anti-mimesis philosophical position that Life emitates Art far more than Art imitates Life...
From The Decay of Lying...
https://en.m.wikipedia.org/wiki/The_Manchurian_Candidate_(1962_film)
^ Thanks. Yes I can see that.
I'm getting better and better at identifying ruses and patterns.
https://www.youtube.com/watch?v=CZo1sXsC-68
^ Thanks. Yes I can see that.
I'm getting better and better at identifying ruses and patterns.
https://www.youtube.com/watch?v=CZo1sXsC-68
Hardest part is getting people to remove head from sand and not only SEE what is happening, but PROCESS the info and then UTILIZE it.
I know many people who can see what's happening and have the intellect to understand the players and the game- but it is uncomfortable and uneasy to do anything about it, so they would rather go the easy route and keep themselves asleep, just keep their heads down and go along,"safe".
It's an intricate system of mass deception, designed not only to keep people asleep, but to make them want to be asleep when they wake up as well. It's scary to see the world for what it truly is and even scarier to stand up against the juggernaut.
The real question and problem is- what do we DO about it? A few, even many can't fight what's happening on a global scale alone. The sheer $$$, effort and man power we're up against is staggering.
When people are happy to be slaves, as long as they have bread and circuses to keep them distracted- how can we free them, or have them free themselves from such a self accepting and self induced slavery?
Eurodriver
03-14-16, 16:54
We can't.
We all know there are millions of Americans who would literally give up their right to vote as long as they have
Food
Housing
Healthcare
Birth Control
The Newest Flat Screen TV & iPhone
Literally millions, and some are Republicans. The mentality does not respect party lines, income levels, religion, race, anything. There are people you interact with on a daily basis that seem otherwise reasonable and normal that would "take the easy way out" if it were offered to them rather than fighting to keep their self-determination.
We can't.
We all know there are millions of Americans who would literally give up their right to vote as long as they have
Food
Housing
Healthcare
Birth Control
The Newest Flat Screen TV & iPhone
Literally millions, and some are Republicans. The mentality does not respect party lines, income levels, religion, race, anything. There are people you interact with on a daily basis that seem otherwise reasonable and normal that would "take the easy way out" if it were offered to them rather than fighting to keep their self-determination.
You're quite right, however the day will come when reality will slap these people in the face. The only thing you can do, is get yourself prepared.History has shown us that most, if not all tyrannical governments eventually turn on their own people. The way things are going, it's just a matter of time before it happens here.
Moose-Knuckle
03-15-16, 01:55
For ****'s sake, even Van Damme figured it out . . .
https://www.youtube.com/watch?v=claY2UU9-5c
I get disheartened too, when I see the vast, vast majority who are willing slaves. However, discussions with folks like you guys give me hope and comfort that I'm not alone.
I attempt to live every day trying to improve my mind and develop my awareness of the truth of matter. Many here have really helped with this process - to have high level thinkers sharing their thoughts/perspectives and sources of information. In turn, I try my best to share with others - even one more "tuned in" mind is a victory.
I can take comfort that I can be free in my own life through my thoughts and actions. I like this quote...
https://s-media-cache-ak0.pinimg.com/736x/8a/26/a9/8a26a9061811499ebe6aa5e32081f610.jpg
Eurodriver
03-15-16, 09:05
For ****'s sake, even Van Damme figured it out . . .
They were trying to shut him up, and yet he was saying nothing "loony" whatsoever.
Who can disagree that someone who is paid by lobbyists dangerous?
VooDoo6Actual
03-15-16, 09:24
Speak TRUTH to power
Truth needs no defending & always stands on it's own.
Digital_Damage
03-15-16, 10:17
reading the old post in this is comical at best....
Outlander Systems
03-15-16, 10:20
Cool story, bro.
reading the old post in this is comical at best....
Cagemonkey
03-15-16, 18:31
That video pretty much sums up how I feel. Life was a lot easier when I didn't have a real stake in the game and was indifferent. Now I have a family and this stuff always weighs on my mind. Glad to see more people are starting to come around.
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