CDZ Is US heading for a financial cliff?
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Book of Jeremiah
Platinum Member
- Nov 3, 2012
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We are headed for a cliff alright.
Andylusion
Platinum Member
Well, like any long term danger, the question isn't "could we crash", but rather "will we choose to crash?"
Any system could crash.
The but like a drunk alcoholic, one can choose to put the bottle away any time one wishes. The question is... will they choose to put the bottle away?
The printing of trillions of dollars did happen, but has since slowed dramatically.
Inflation has stayed in check, but we still have billions in Federal Reserves. How do we get out of that?
Answer.... very slowly, and with a policy of not borrowing anymore money.
If the government stops borrowing, the pressure on the Fed will be reduced, allowing a more orderly withdraw from the system.
If on the other hand, we continue to borrow at an ever increasing rate, with trillions of dollars in short term notes... then Greenspan is right. Some major upset, likely a crisis in the bond market, will force catastrophic change.
Sonny Clark
Diamond Member
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We've been headed in that direction for decades now. We have not been a self-supporting nation for decades.
JakeStarkey
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- Aug 10, 2009
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Greenspan said a week ago that the major problem at the banks was long term capital investment. The weak world economy is holding that back.
william the wie
Gold Member
- Nov 18, 2009
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crashes are a normal part of financial markets. The market goes up and the lemmings pile in. The market goes down, hits bottom and they bail. Buy, low and sell high is not practiced.
Toddsterpatriot
Diamond Member
With the Federal Reserve printing trillions upon trillions of dollars to keep the economic system afloat,
The Fed isn't printing trillions. Or even billions. And gold dropped to $1164 today.
CultureCitizen
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- Jun 1, 2013
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You can expect more inflation, a stock crash near year end, and something worse by 2017 when the dollar stops being the default reserve currency.
Ah ... the sky is falling. I've been hearing the doom and gloom predictions for 5 years. I take it you missed the 150% market gains since 2009. Too bad for you.
CultureCitizen
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Ah , links of course. There you go mate : foreign governments dumping dollars and the velocity of money falling, a clear sign of economic stagnation.
Jim Rickards The Coming 25-Year Great Depression
Velocity of M2 Money Stock - FRED - St. Louis Fed
The Velocity Of Money In The U.S. Falls To An All-Time Record Low Alex Jones Infowars There s a war on for your mind
Toddsterpatriot
Diamond Member
2017 when the dollar stops being the default reserve currency.
Why is that going to happen?
HenryBHough
Diamond Member
Today another nearly 300-point decline as the DJIA continues a week of crumbling. But I don't think this is "the big one". It does suggest that thinking people are noticing that the recent unemployment figures are dummied up to conceal the number (in the millions) who are no longer looking for jobs because they have figured out that there are none.
When people are not working - and those not counted because they've given up looling - they are not spending. At some point makers realize the warehouses are filling up so there's no point in making more. Ditto for importers (the more important part of today's economy).
The picture will be muddy because the decline will be general but there will still be a few brilliant stars burning and those are what the regime's propaganda machine will dangle like shiny objects to keep your attention.
Right now the U.S. Dollar is enjoying popularity due to the Euro-zone fiasco. That means non-Euro foreign currencies are looking like something those who have figured out that gold is overpriced might want to buy. But not just one foreign currency, at least three.
Hey, it works for George Soros!
When people are not working - and those not counted because they've given up looling - they are not spending. At some point makers realize the warehouses are filling up so there's no point in making more. Ditto for importers (the more important part of today's economy).
The picture will be muddy because the decline will be general but there will still be a few brilliant stars burning and those are what the regime's propaganda machine will dangle like shiny objects to keep your attention.
Right now the U.S. Dollar is enjoying popularity due to the Euro-zone fiasco. That means non-Euro foreign currencies are looking like something those who have figured out that gold is overpriced might want to buy. But not just one foreign currency, at least three.
Hey, it works for George Soros!
CultureCitizen
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Fiat overprinted currency.
Toddsterpatriot
Diamond Member
The Fed stopped printing and the ECB and BOJ have begun.
Doesn't sound like a reason for everyone to dump dollars.
HenryBHough
Diamond Member
I'm thinking it wasn't necesarily intentional but you, CC, have just brought back to mind a practice I hadn't seen done since a couple of visits to Argentina back in the 80's.
"Overprinted"
I had a little Argentine currency left from the first visit and brought it with me for the second, less than a year later. Inflation by then had made the 10-Peso note worth pennies UNDER 1-Peso. But the expense of printing new money was daunting so the approach taken was to OVERPRINT old notes with something like "NEW". There was a new currency starting in circulation but until there was enough to withdraw the old both were in use.
The process was simple enough. By a set date one had to take all their currency to a bank and turn it in for the new form. For every hundred old Pesos you turned in you got ten New Pesos. If you had deposited a thousand Pesos in your account you got a hundred New Pesos back when you withdrew. But there was a limit of conversion. If you had more than something above around 100,000 Old Pesos on deposit? Hard cheese. You weren't allowed to convert any more than that and the excess was forfeit.
See how simply it can be done!
Old Dollars and, as long as we'll also be enriching our language, "NUEVO Dollars"
CultureCitizen
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Toddsterpatriot
Diamond Member
How many dollars did they hold in 2003? How many do they hold now?
alan1
Gold Member
Todays market close,
the DJI is $17,856
the NASDAQ is $4,927
I predict the DJI will hit $26,874 before it hits $8,928
and the NASDAQ will hit $7,390 before it hits $2,463
Figures are 50% in either direction
the DJI is $17,856
the NASDAQ is $4,927
I predict the DJI will hit $26,874 before it hits $8,928
and the NASDAQ will hit $7,390 before it hits $2,463
Figures are 50% in either direction
Andylusion
Platinum Member
While all that could happen, I don't think I'd assume. It's interesting, because throughout history, a number of nations have been the global reserve currency.
What makes a reserve currency, the reserve currency? What causes a bank somewhere, or a nation somewhere, to hold on to stashes of foriegn currency?
The answer, is simply that the currency has value.
What gives the currency value? Answer: What you can exchange the currency for. What you can buy with it.
So..... As long as the US produces $17 Trillion in gross domestic product, there is no reason that our currency would lose value.
As long as the currency doesn't lose value, there is no reason that it would cease to be a global reserve currency.
Now, depending on how strong the growth is in other countries, there could be multiple global reserve currencies. China would like to have the Yuan become a global reserve currency, which could in fact happen given China's global international sales.
However, that also depends on having Yuan spread around. Right now, the Yuan isn't spread around much. To understand what I mean, how do people get US dollars? We buy stuff from them.
If we never bought anything from them, they wouldn't have them to hold.
China is still a net exporter. In other words, we're not selling the Chinese enough to ever get any Yuan... which is why Yuan isn't held by anyone.
When you look at the world's reserve currencies, the US Dollar is top, because we are wealthy, and buy the most stuff from everyone.
Second is the Euro, which is the second most wealthy bloc. Third is the British Pound Sterling, and the Japanese Yen. The remaining is only about 5% of other currencies.
The only way China, or some other country, will end up displacing the dollar, is if they start importing. Since China and Russia, and the other countries try and avoid importing.... they'll never be the reserve currency.
There is only one way the dollar can be displaced. That's if we screw up our own economy, so that the dollar has no value. Could that happen? Of course. Anything can happen. But we'd really have to screw it to bits, to do that. We're no where close to that right now (although we're working on it).
Andylusion
Platinum Member
I don't think the Chinese are 'dumping' the dollar.
At one point, China's reserve holdings were somewhere up near 90% in US dollars. Even in this graph, it's 75% in US dollars in 2003, right?
That's a heck of a lot of capital all locked up in one single currency.
I think... I could be wrong.... have been before, will be again... just my opinion. I think China is diversifying. I think they are getting more Euros, and Yen, and Sterling. I think they are just being wise, and investing in multiple currencies.
If they are dumping it.... then why are bond interest rates so low? Because if they were actually selling off their bonds, then interest rates would go up... and fast too.
Take a look at this.
The estimated amount of US treasuries owned by China, has gone up. Not down.
But notice in 2004 to 2005, they started buying corporate bonds, and equities.
I would suggest to you that this indicates what I was saying. Diversification. It's not that the amount of US dollar reserves have been dumped by China, but rather that they have purchased more reserves in other things. Thus as a percentage of their total reserves, the dollar has fallen, as they have increased other reserves.
But I don't think they are dumping the dollar. We would have known it by now, if they had. The interest rates on bonds would have tripled by now, if they were selling them off.
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