View Full Version : Dollar/US economy collapse!
drbiohealth
29th November 2009, 03:54 PM
http://www.youtube.com/watch?v=eZA0qNsf4m0
What do you guys think?
CapeBrenton
1st December 2009, 11:16 AM
I think the dollar is on life support, as is the US economy in general and has been so for quite some time.
The catch is, it's extremely, extremely unlikely that we 'collapse', in spite of the exacerbated sense of immediacy created by the 24 hour news cycle and instant, at-will transfer of information via the net. We will enter a state of elegant decay.
It was inevitable in coming; we devised systems of management, production and commerce that set the world-entire on its ear, but got greedy and put our trust in wizards bearing 'financial theories' rather than the staid and reliable economic fundamentals that seated us in the position we enjoyed for so long... If an epitaph is ever written of the United States, the word "greed" will certainly be contained therein.
The saddest part is that our success was so grotesquely disproportionate in relation to the prior spectrum of human history, we probably had enough fat in our larders to sustain this country and our standard of living for quite some time even absent a meaningful industrial base, but we will be shipping most of what remained to China in the form of interest on accumulated debt.
It's a shame. Our country has some very painful times to go through- both economic and social, that will likely stem from the increasing stratification of wealth and some meaningful demographic shifts that will occur over the next 40 years. We will endure substantial, secular variations from our historical trajectory. In the end, though, assuming the entire ship doesn't sink, I'm fairly confident that there's a decent future ahead. We are the only country in the world that combines the economic engine of free markets with the massive creativity of a generally free people. Until China sheds the intellectual shackles of Communism, the major players in Europe shed economic shackles of Socialism or unless perhaps the Indians concoct a new and totally innovative system completely out-of-the-blue, there isn't another nation on earth which has "this thing" which we have here in America, and I've traveled to plenty to see for myself. Japan tried to become a knock-off of the US and succeeded in some ways, but failed in many others.
I realize people in other countries bitch and moan about America for a litany of reasons and in reading over some posts, it's pretty clear that the culture on this site tends to reflect this dynamic, but I'm not too worried about any of that. Call it smug, call it 'quiet confidence' if you will... I'm pretty sure I know where this trip ends up.
bwhhisc
1st December 2009, 11:38 AM
Nice post...and I even enjoyed your ending to the story. :)
The US economy is in deep, deep sh*t, and the only way out is not pretty.
While it's possible, I doubt the resolve will be there until things really hit bottom and by then it may be too late.
Rubber Duck
1st December 2009, 11:40 AM
You have already feasted on the fat for a decade!
I think the dollar is on life support, as is the US economy in general and has been so for quite some time.
The catch is, it's extremely, extremely unlikely that we 'collapse', in spite of the exacerbated sense of immediacy created by the 24 hour news cycle and instant, at-will transfer of information via the net. We will enter a state of elegant decay.
It was inevitable in coming; we devised systems of management, production and commerce that set the world-entire on its ear, but got greedy and put our trust in wizards bearing 'financial theories' rather than the staid and reliable economic fundamentals that seated us in the position we enjoyed for so long... If an epitaph is ever written of the United States, the word "greed" will certainly be contained therein.
The saddest part is that our success was so grotesquely disproportionate in relation to the prior spectrum of human history, we probably had enough fat in our larders to sustain this country and our standard of living for quite some time even absent a meaningful industrial base, but we will be shipping most of what remained to China in the form of interest on accumulated debt.
It's a shame. Our country has some very painful times to go through- both economic and social, that will likely stem from the increasing stratification of wealth and some meaningful demographic shifts that will occur over the next 40 years. We will endure substantial, secular variations from our historical trajectory. In the end, though, assuming the entire ship doesn't sink, I'm fairly confident that there's a decent future ahead. We are the only country in the world that combines the economic engine of free markets with the massive creativity of a generally free people. Until China sheds the intellectual shackles of Communism, the major players in Europe shed economic shackles of Socialism or unless perhaps the Indians concoct a new and totally innovative system completely out-of-the-blue, there isn't another nation on earth which has "this thing" which we have here in America, and I've traveled to plenty to see for myself. Japan tried to become a knock-off of the US and succeeded in some ways, but failed in many others.
I realize people in other countries bitch and moan about America for a litany of reasons and in reading over some posts, it's pretty clear that the culture on this site tends to reflect this dynamic, but I'm not too worried about any of that. Call it smug, call it 'quiet confidence' if you will... I'm pretty sure I know where this trip ends up.
CapeBrenton
1st December 2009, 11:47 AM
You have already feasted on the fat for a decade!
Arguably, Britain has been feasting on colonial-era fat for the past 100 years, so at minimum, we all know it can be done.
jacksonm
1st December 2009, 12:40 PM
Arguably, Britain has been feasting on colonial-era fat for the past 100 years, so at minimum, we all know it can be done.
There is no more empire, just a small, rainy island overcrowded with non-indigenous, unemployed immigrants from the ex-colonies and violent crime rates surpassing those of anywhere in USA. The sun has set forever on the british empire.
It really is a damned shame what happened to England. Especially that they have stopped using dinner knives while eating.
bwhhisc
1st December 2009, 03:29 PM
Especially that they have stopped using dinner knives while eating.
:lol:
jacksonm
1st December 2009, 03:49 PM
:lol:
They will soon have to create a new dukedom for Prince Charles, so he can provide a proper title for his second wife Camilla, The Duchess of Fork
http://i.dailymail.co.uk/i/pix/2009/07/21/article-1200906-05C7A47B000005DC-912_233x423.jpg
Drewbert
1st December 2009, 06:41 PM
Heh heh.
touchring
2nd December 2009, 06:21 AM
I think the dollar is on life support, as is the US economy in general and has been so for quite some time.
The catch is, it's extremely, extremely unlikely that we 'collapse', in spite of the exacerbated sense of immediacy created by the 24 hour news cycle and instant, at-will transfer of information via the net. We will enter a state of elegant decay.
Elegant decay is an illusion. The wealth gained from money printing is an illusion, up to a certain stage, hyperinflation will kick in, and then when all the 401ks get wiped out, what will 80 million baby boomers do??
By then, some resource rich states might want to break away and have their own currency and control their own finances.
Drewbert
2nd December 2009, 07:18 AM
and then when all the 401ks get wiped out, what will 80 million baby boomers do??
Revolt.
Drewbert
2nd December 2009, 07:27 AM
Gold now at US$1200
Which country was it whose chancellor sold off 400 tonnes at $275/toz in 1999 (against all advice), and then ended up prime minister?
I forget.
What a dumbarse. How the hell does he still have a job?
touchring
2nd December 2009, 07:42 AM
Revolt.
btw, they're prepared.
Arming Goldman With Pistols Against Public: Alice Schroeder
Share Business ExchangeTwitterFacebook| Email | Print | A A A
Commentary by Alice Schroeder
Dec. 1 (Bloomberg) -- “I just wrote my first reference for a gun permit,” said a friend, who told me of swearing to the good character of a Goldman Sachs Group Inc. banker who applied to the local police for a permit to buy a pistol. The banker had told this friend of mine that senior Goldman people have loaded up on firearms and are now equipped to defend themselves if there is a populist uprising against the bank.
I called Goldman Sachs spokesman Lucas van Praag to ask whether it’s true that Goldman partners feel they need handguns to protect themselves from the angry proletariat. He didn’t call me back. The New York Police Department has told me that “as a preliminary matter” it believes some of the bankers I inquired about do have pistol permits. The NYPD also said it will be a while before it can name names.
CapeBrenton
2nd December 2009, 07:47 AM
Elegant decay is an illusion. The wealth gained from money printing is an illusion, up to a certain stage, hyperinflation will kick in, and then when all the 401ks get wiped out, what will 80 million baby boomers do??
By then, some resource rich states might want to break away and have their own currency and control their own finances.
I'm willing to bet a substantial sum of money- escrowed, denominated in the medium of your choice (gold, if you wish)- that we don't see anything resembling hyperinflation.
Inflation, for certain... Bad inflation- I'm convinced of it... but please, the words "inflation" and "hyperinflation" are not interchangeable and the difference is not semantic.
Drewbert
2nd December 2009, 07:54 AM
btw, they're prepared.
Did you see that dude that showed up at an Obama town hall meeting with an semi-automatic rifle strapped to his back?
Those GS boys will need more than pistols.
The people in the buildings across the street should keep pointing laser pens through their windows. Spook them up a bit more.
touchring
2nd December 2009, 08:50 AM
I'm willing to bet a substantial sum of money- escrowed, denominated in the medium of your choice (gold, if you wish)- that we don't see anything resembling hyperinflation.
Inflation, for certain... Bad inflation- I'm convinced of it... but please, the words "inflation" and "hyperinflation" are not interchangeable and the difference is not semantic.
I don't have a timeline, but I believe the final ending will be hyperinflation, a view shared by many today. Bad inflation, very high inflation, these are all alternative terms to hyperinflation.
Hyperinflation may not just be a US problem alone.
http://www.dailyrecord.co.uk/news/business-news/2009/11/25/revealed-bank-of-england-s-61bn-secret-loan-to-keep-rbs-and-hbos-afloat-86908-21849164/
Revealed: Bank of England's £61bn secret loan to keep RBS and HBOS afloat
Are we to believe that there will be no consequence to this? Can ten million people walk away from trillions of dollars of mortgages and credit card debt, without any effect on the monetary system? I'm sure there will be consequences, just that it hasn't manifested itself yet.
Today, China is asking its citizens to stock up gold. Soon, other governments will follow.
touchring
2nd December 2009, 09:03 AM
Since the pound can be printed freely, why should I pay my debt?
http://www.newsdaily.com/stories/tre5aq3a0-us-dubai-britain/
More to follow.
CapeBrenton
2nd December 2009, 09:46 AM
Bad inflation, very high inflation, these are all alternative terms to hyperinflation.
No. Not really.
Bad inflation, very high inflation, etc aren't necessarily decoupled from the rudiments of monetary equilibria, whereas "hyperinflation" is.
Inflation can be "bad" or "very high" without remotely approaching the requisite thresholds to be considered "hyperinflation".
jacksonm
2nd December 2009, 10:12 AM
My take on when hyperinflation will have occurred:
1. The fed begins monthly reporting of inflation percentage increases.
2. Shops in the USA stop accepting credit cards, checks, etc and start demanding payment in EUR cash, for example.
You remember about 15 years ago, when one needed USD cash in order to purchase almost anything valuable in Russia?
touchring
2nd December 2009, 11:01 AM
My take on when hyperinflation will have occurred:
1. The fed begins monthly reporting of inflation percentage increases.
2. Shops in the USA stop accepting credit cards, checks, etc and start demanding payment in EUR cash, for example.
You remember about 15 years ago, when one needed USD cash in order to purchase almost anything valuable in Russia?
Gold for bread - http://www.youtube.com/watch?v=7ubJp6rmUYM
Zimbabwe is lucky, there is gold in the rivers, wild animals to catch, and cassava.
touchring
2nd December 2009, 11:21 AM
Worst nightmare come true. Infinite inflation in an instance.
http://www.google.com/hostednews/afp/article/ALeqM5gpl4OugxgnFXQNcInr-1rou8odcQ
Anger over N.Korea's shock currency change
By Jun Kwanwoo (AFP) – 6 hours ago
SEOUL — North Korea's shock currency revaluation has sparked anger and frustration in the isolated communist state as citizens see much of their savings wiped out, reports and observers said Wednesday.
Analysts said authorities initially limited the total sum that an individual can exchange for new currency to 100,000 won.
Because of widespread protests, the limit was raised to 150,000 won in cash and 300,000 won in bank savings, according to DailyNK, an online newspaper with informants in the North.
The official exchange rate is 135 won to the dollar but the current black market rate is between 2,000 and 3,000.
CapeBrenton
2nd December 2009, 11:43 AM
Monetarily speaking, the west is a thousand universes away from Zimbabwe or North Korea. To compare one with the other kinda hints at that delusional "end is 'nigh" fantasy-state that is so often- and so recklessly- promoted by those apt to perpetual doom-and-gloomery. There are absolutely no legitimate correlatives to connect those places with anywhere else, as far as monetary policy goes.
I completely agree that we have troubled waters ahead and I'm positioned accordingly (in revenue generating businesses, a few REITs with ag holdings, commodities ETFs and a smattering of physical metals) but your "gold bug" types regularly take things so, so, so far away from what's realistic or even remotely probable one can't help but shake their heads and chuckle sometimes.
Rubber Duck
2nd December 2009, 04:43 PM
You are correct. Hyperinflation is more about the inability of Government to Govern. That is why I am absolutely convinced that the US will experience it.
I'm willing to bet a substantial sum of money- escrowed, denominated in the medium of your choice (gold, if you wish)- that we don't see anything resembling hyperinflation.
Inflation, for certain... Bad inflation- I'm convinced of it... but please, the words "inflation" and "hyperinflation" are not interchangeable and the difference is not semantic.
Rubber Duck
2nd December 2009, 05:15 PM
Arguably, Britain has been feasting on colonial-era fat for the past 100 years, so at minimum, we all know it can be done.
Again you need to do more research.
Empire for Britain end in Suez. The fat ran out circa 1965. The UK then experience three very lean decades. I know, I was there!
If you want to follow the UK model for managing an End of Empire Scenario, then good luck. You will need it!
sbe18
3rd December 2009, 07:04 AM
LOL........on the 400 tons/ tonnes of gold sold...
....
uae total debt is at $184 billion...
dubai world....60+.....
if uae does a US/UK bailout....then it goes to $240+
wonder if China will simply buy UAE debt at 20 cents, but buy the oil
at below OPEC benchmark prices from the UAE....
that would be fun meeting to be a fly on the wall for....
Royal Dutch/Shell and BP exec's crying in their gin glasses...
Exxon exec's crying in their bourbon glasses...
s/
s/
Drewbert
3rd December 2009, 08:15 AM
A good summation...
http://www.theonion.com/content/node/31049
jacksonm
3rd December 2009, 08:38 AM
A good summation...
http://www.theonion.com/content/node/31049
I burst out in laughter, at a highly inappropriate moment, while reading that fine bit of satire.
sbe18
3rd December 2009, 06:52 PM
great link......thanks....
the close is classic......
Chen added: "For now, I must refuse the job. Somehow, the only thing more depressing than making plastic shit for Americans is destroying the plastic shit they send back."
as I click with the new $10 optical mouse I just bought yesterday........
s/
bumblebee man
4th November 2010, 12:31 AM
Fed wants to print another 600 billion dollars. With interest rates being close to zero already they are really trying hard to turn their currency into toilet paper.
http://retardedminds.com/wp-content/uploads/2009/08/american-dollar-toilet-paper.jpg
Drewbert
4th November 2010, 04:03 AM
Fed wants to print another 600 billion dollars. With interest rates being close to zero already they are really trying hard to turn their currency into toilet paper.
No where to go but up for silver and gold.
http://silver-dollars.com - join up and get selling!
rofsjan
7th November 2010, 12:07 PM
http://paul.kedrosky.com/commodities.png
it's a pity that IDNs are not included.
Drewbert
7th November 2010, 08:05 PM
http://www.youtube.com/watch?v=RwetW1B3J8A
Rubber Duck
8th November 2010, 04:51 AM
No. Not really.
Bad inflation, very high inflation, etc aren't necessarily decoupled from the rudiments of monetary equilibria, whereas "hyperinflation" is.
Inflation can be "bad" or "very high" without remotely approaching the requisite thresholds to be considered "hyperinflation".
Absolutely correct. Hyperinflation occurs when their is a total loss of confidence in the Central Bank to take appropriate action. I guess we are pretty much there already.
phio
8th November 2010, 06:02 AM
Many people I know are already preparing for a tough winter....that 600 billion may have been the wrong move, only time will tell...but the prediction is that it will devalue the dollar 20 percent, which would be a big sudden drop. All those who saved and worked hard and invested their dough all their lives will be pissed if they lost 1/5th of what they own. To top it off, some home values have dropped 70 percent since 2006. All in all, the middle class has been reemed, and probably won't take much more. I'd say another 6 months and you'll see people bangin pots in front of the AIG and Chase buildings...
http://blogs.wsj.com/economics/2010/11/06/number-of-the-week-102-trillion-in-global-borrowing/
of course, it may never come to pass, if something 'sensational' happens to rivet the American people to their TVs.
Drewbert
8th November 2010, 06:22 AM
Actually it's closer to 900 billion, all told.
Apparently.
phio
8th November 2010, 07:23 AM
Drewbert, you may enjoy this http://www.youtube.com/watch?v=zMO1HEpJN8A
bumblebee man
8th January 2011, 06:48 AM
Failure to raise the limit would precipitate a default by the United States.
Time for another downgrade?
http://www.dagongcredit.com/dagongweb/uf/USARatingReport.pdf
bwhhisc
8th January 2011, 11:00 AM
Time for another downgrade?
http://www.dagongcredit.com/dagongweb/uf/USARatingReport.pdf
Yes, lets get the 'official' rating from a group influenced by the communist Chinese government. :p
http://www.dagongcredit.com/dagongweb/english/index.php
Heck, in one of their reports even Sudan with "C" ratings is given an outlook as "stable" :lol:
Anyone going there on vacation this year??
and Finland with their AAA is rated with outlook of "negative"
thefabfive
8th January 2011, 11:07 AM
Of course they're going to raise the debt ceiling. Just like us regular folks do when we run out of credit.
Rubber Duck
8th January 2011, 11:12 AM
Yes, lets get the 'official' rating from a group influenced by the communist Chinese government. :p
http://www.dagongcredit.com/dagongweb/english/index.php
Heck, in one of their reports even Sudan with "C" ratings is given an outlook as "stable" :lol:
Anyone going there on vacation this year??
and Finland with their AAA is rated with outlook of "negative"
They are just following the convention of the Big US rating agency to give the rating in two parts. The first indicates the current level and second indicates the trend. Finland obviously has an excellent rating but is being scrutinized with the view of potentially downgrading, hence Negative, whilst Sudan is considered to be Poor but unlikely to substantially deteriorate in the near term. There really is no inconsistency.
Further their influence on the Chinese Communist Party is probably more important than the influence the other way. As the Chinese are probably the World's most influential lender at the moment, their opinion actually bears more weight than Moody's who largely influence the insolvent.
Rubber Duck
8th January 2011, 11:46 AM
Of course they're going to raise the debt ceiling. Just like us regular folks do when we run out of credit.
Well, it is kind of interesting.
Stock markets in the third year of first presidential term are known to outperform.
Not surprising really as they know the President is going to attempt to buy re-election.
However, Obama does not control congress, and is powerless to act without them.
Deficits also need to be reduced, to avoid a meltdown in the bond market. The Republicans at this point have every reason to try to avoid letting Obama make himself look good. It is not difficult to make a case for blocking and increase in the debt ceiling, but at the same time they have already teed him up with tax breaks that make it even more difficult to balance the books.
Much depends on who the public starts to blame. If they seem to be blaming the encumbent then a default on US debt is a distinct possiblity, as the Republicans seek to press home their advantage.
thefabfive
8th January 2011, 12:03 PM
The republicans will tie increasing the debt ceiling to spending cuts ans dare Obama to veto it.
Rubber Duck
8th January 2011, 01:26 PM
The republicans will tie increasing the debt ceiling to spending cuts ans dare Obama to veto it.
Which implies that increases in the debt ceiling are going to be relatively small and conditional.
This also, however, implies austerity measures which will have an impact on the growth and hence tax revenues. So, even if Obama agrees the ceiling could be breached.
thefabfive
8th January 2011, 01:39 PM
Which implies that increases in the debt ceiling are going to be relatively small and conditional.
Sounds like a good plan
This also, however, implies austerity measures which will have an impact on the growth and hence tax revenues. So, even if Obama agrees the ceiling could be breached.
Government shouldn't be providing the growth of the economy in the first place (and they do a piss poor job when they attempt it), so I don't see a problem with austerity measures.
But I still don't see the ceiling being breached.
bumblebee man
8th January 2011, 05:13 PM
Yes, lets get the 'official' rating from a group influenced by the communist Chinese government.
Well, it's pretty obvious that they are not quite independent. :D Like all the other rating agencies. However they can't be worse than Standard & Poor's, Moody's and Fitch. What was the rating for Lehman Brothers again? :p
If I was a creditor of the US I'd be worried too.
Rubber Duck
9th January 2011, 11:04 AM
Well, it's pretty obvious that they are not quite independent. :D Like all the other rating agencies. However they can't be worse than Standard & Poor's, Moody's and Fitch. What was the rating for Lehman Brothers again? :p
If I was a creditor of the US I'd be worried too.
Well you have to give them credit for not giving their host nation the top scores even though it probably is the most credit worthy on Earth.
The US agency always give the US Triple A even though it just a supersized version of Ireland or Greece but without a recovery plan.
Furthermore, the US considers that the Dollar being held as reserves all around the World underwrites it status when in actual fact this is probably the most destabilising factor. Nobody much can sell off much Chinese Debt or Currency because it is not widely held. Treasury Bonds and Dollars could potentially get junked on scale unprecidented in the history of humanity.
bwhhisc
10th January 2011, 12:58 AM
Well, it's pretty obvious that they are not quite independent. Like all the other rating agencies. However they can't be worse than Standard & Poor's, Moody's and Fitch. What was the rating for Lehman Brothers again? If I was a creditor of the US I'd be worried too.
Go to the source if you want the straight story :p ...for accuracy, comprehensive studies, world statistics, internation politics and accurate US and foreign government financial information your one stop shop is the CIA library and cataloged reports. :lol:
https://www.cia.gov/library/reports/index.html
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