The low gold price essentially switches off the alarm in the financial system. What the purpose of the strong dollar was so that the US Government could issue lots of dollars without the alarm bells going off. The benefit for the US has been to live beyond their means. They managed to import goods from foreign countries and they have paid for them essentially with overvalued treasure debt. And they have even been so successful they have convinced other central banks that US treasure debt is a reserve asset. Now central banks around the world are sitting on trillions of dollars of treasure debt as a reserve asset which has a huge counter party risk now of the Americangovernment – they will not repay it. (Link)
Get ready for a rough ride Ladies and Gentlemen. No matter what country you are from, Russia or China or the European area. (All over the world.) Get ready for the ride…
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110114 Responseshttp%3A%2F%2Fwindowstorussia.com%2Frussia-will-america-be-able-to-repay_11.htmlRussia%3A+Will+America+Be+Able+To+Repay+Her+Debt%3F2009-03-11+16%3A33%3A00adminhttp%3A%2F%2Fwindowstorussia.com%2F2009%2F03%2F11%2Frussia-will-america-be-able-to-repay-her-debt%2F to “Russia: Will America Be Able To Repay Her Debt?”
If the US governments finances were transparent, it would be plain to see that the US federal government has criminally bankrupted the country. It is clear to me that the only way for the US to pay off it's debt is to print money. Which debases/dilutes the existing currency. This means the US dollars in my pocket or anyones pocket is worth a lot less. This is the inflation tax that Ron Paul often mentions. It is purely evil in nature…it is theft by any definition and leaves the elderly particularly vulnerable as they are no longer able to earn more income, which is needed to account for the inevitable inflationary bulge in the price of everything.
With regard to foreigners who hold US currency, the same thing happens the the value of the dollars that they hold. If this is a foreign government, it doesn't make them very happy and all kind of bad things can happen….war being the worst.
What I think will happen, is that our largest creditor, China, will eventually give up on US's ability to pay them back(regardless how many lobbying trips Hillary makes) When that happens, we'll be forced to crank up the presses and the dollar's value will effectively cease to exist. Oil tankers will turn around and the US will grind to a halt.
It won't be the end of the US per se but it will be tough for awhile. I wouldn't be surprised to see a few congressmen and lobbyist getting their necks stretched.
As for Hillary, I find her a particularly disgusting person, along with her husband. She(husband included) is nothing but a political whore with absolutely zero qualms with her moral, ethical and personal ineptness as long as she climbs ever further up the ladder.
Gold is holding at $895.90 an ounce. This guy is trying to drive the price up by creating a panic. I'm confident that his attempt to drive everybody into buying gold will fail and he won't become fabulously rich selling it to us at ridiculous prices.
The dirty little secret about currency is that every government just prints the stuff. As long as people are willing to use it it works. As soon as there is a panic the value of the currency falls. Like the stock market it is more psychological than economic in nature.
The US economy has enormous capacity to generate wealth. Much more than Russia, India, or China, although they are all growing rapidly. The way that the US will repay it's debt is by generating that wealth. One thing Americans know how to do really well is work.
The contrast between the American perspective and the rest of the word's perspective on this situation is astonishing. When I tell my friends and family that they need to diversify their investments, primarily away from the market and more towards gold/land, they all laugh … ALL … no one takes this problem seriously. Little by little I have managed to convince a select few that this is a serious problem, but the American Propaganda Agency (mass media) does such a good job keeping the people ignorant of this situation that it amazes me. While the world is waiting for the dollar's default, American's are ignoring all the signs of collapse.
I would like to add one little piece of information to this story … give a little thought what will happen to the world if the dollar collapses. What will happen to the Euro? What will happen to every national currency? They will all inevitably collapse. The fall of the dollar will have world wide reprecussions that will make this current financial crisis look like a slight market dip. This simple fact is all that is holding the dollar up right now … if there wasn't such an immense world wide dependence on the Dollar, it would have collapsed long ago.
Clark, regarding gold prices, I watch the market daily. It is far from stable. Just a few weeks back it touched $1000, and right now it is trading at $910. It is a very fluctuating market, and currently a far more stable investment than the stock market … in case you haven't noticed.
I am sitting here at a Internet cafe in China trying to figure out how to exchange dollars. I am having a tough time, no one wants them.
This is my first trip to China and I was told that American dollars are no problem. Well from what I understand a few months ago that would have been true, but now the rules are changing.
I am told not preferred, not preferred! I had to almost pay double for a meal because I wanted to use dollars.
It is good thing that I have visa card because it exchanges dollars to Renminbi. (RMB)
The dollar is hurting and I see that now that I am not in America.
The real issue is probably going to be the nature of the crash. Lots of people want to believe as Stephen Roach and John Maudlin that we will "muddle through" before the crash. "Muddle through," my butt. Not with $100 trillion dollars in debt world wide and a US government debt of $70 trillion. In my opinion, we're going to have a sudden, surprising to most, catastrophic crash……..
Hillary Clinton is the living example of everything that's wrong with America. She's a Communist AND a castrating feminist. You can't find a more un-Godly, more un-American combination than that.
Although I don’t think US will default, it would be very interesting to see what would happen if it did. We could be on the verge of the world’s first economic war. A large proportion of US debt is held in China so there is an interdependency of sorts. But if China calls the debt in, the US collapses through lack of funding. If the US defaults, China lacks the funds to continue growing. It is not a huge leap of fantasy to assume that strategists in both countries are weighing up the possibilities of deliberately manipulating economies to damage rivals. In the long term, if China can’t expand, Brazil, Russia or India could step into that gap, and would have an interest in supporting a US attack on China. If the US collapses again, Brazil, Russia, India (or possibly EU, but less likely as more dependent on US$) would be in a position to be come the consumer market that the US currently is. It would be a military-free conflict, but I suspect it would change the world as dramatically as WW2
A few years ago I would have said that the USA would never default, But…
I think what I see may happen is they will inflate their way out of debt. But that will be the same as creating a economic war. It would piss the world off because all their dollars would be worthless.
I still see very rough times ahead and who comes out on top will be different than who went in…
Just remember back in 1998 the US had a budget surplus and Russia had financial crisis and defaulted on it’s loans.
Things can change very fast. Don’t count out the USA so fast. I heard the same thing back in the 1980′s about how Japan would surpass the US economy; it did’t happen.
I just needed to say that I found your blog via Google and I am glad I did. I will make sure to bookmark you for when I have more free time away from work. Thanks again!
I have lost hope that they will repay the debts. I think they will inflate their way out of the debts and in turn start a world crises. Then it will get out of hand and we will have Zimbabwe of the USA! That is my -99 cent worth.
Dmitry Medvedev chaired a State Council Presidium meeting on regulating the domestic food market, visited several Saratov agribusinesses and had a meeting with Governor Pavel Ipatov. […]
Dmitry Medvedev chaired a State Council Presidium meeting on regulating the domestic food market, visited several Saratov agribusinesses and had a meeting with Governor Pavel Ipatov. […]
Dmitry Medvedev congratulated President of the Socialist Republic of Vietnam Nguyen Minh Triet on Vietnam’s national holiday, the 65th anniversary of independence. […]
purpose of the strong dollar was so that the US Government could issue lots of dollars without the alarm bells going off. The benefit for the US has been to live beyond their means. They managed to import goods from foreign countries and they have paid for them essentially with overvalued treasure debt. And they have even been so successful they have convinced other central banks that US treasure debt is a reserve asset. Now central banks around the world are sitting on trillions of dollars of treasure debt as a reserve asset which has a huge counter party risk now of the American government – they will not repay it. (Link)
You know I can't leave this alone.
If the US governments finances were transparent, it would be plain to see that the US federal government has criminally bankrupted the country. It is clear to me that the only way for the US to pay off it's debt is to print money. Which debases/dilutes the existing currency. This means the US dollars in my pocket or anyones pocket is worth a lot less. This is the inflation tax that Ron Paul often mentions. It is purely evil in nature…it is theft by any definition and leaves the elderly particularly vulnerable as they are no longer able to earn more income, which is needed to account for the inevitable inflationary bulge in the price of everything.
With regard to foreigners who hold US currency, the same thing happens the the value of the dollars that they hold. If this is a foreign government, it doesn't make them very happy and all kind of bad things can happen….war being the worst.
What I think will happen, is that our largest creditor, China, will eventually give up on US's ability to pay them back(regardless how many lobbying trips Hillary makes) When that happens, we'll be forced to crank up the presses and the dollar's value will effectively cease to exist. Oil tankers will turn around and the US will grind to a halt.
It won't be the end of the US per se but it will be tough for awhile. I wouldn't be surprised to see a few congressmen and lobbyist getting their necks stretched.
As for Hillary, I find her a particularly disgusting person, along with her husband. She(husband included) is nothing but a political whore with absolutely zero qualms with her moral, ethical and personal ineptness as long as she climbs ever further up the ladder.
Gold is holding at $895.90 an ounce. This guy is trying to drive the price up by creating a panic. I'm confident that his attempt to drive everybody into buying gold will fail and he won't become fabulously rich selling it to us at ridiculous prices.
The dirty little secret about currency is that every government just prints the stuff. As long as people are willing to use it it works. As soon as there is a panic the value of the currency falls. Like the stock market it is more psychological than economic in nature.
The US economy has enormous capacity to generate wealth. Much more than Russia, India, or China, although they are all growing rapidly. The way that the US will repay it's debt is by generating that wealth. One thing Americans know how to do really well is work.
The contrast between the American perspective and the rest of the word's perspective on this situation is astonishing. When I tell my friends and family that they need to diversify their investments, primarily away from the market and more towards gold/land, they all laugh … ALL … no one takes this problem seriously. Little by little I have managed to convince a select few that this is a serious problem, but the American Propaganda Agency (mass media) does such a good job keeping the people ignorant of this situation that it amazes me. While the world is waiting for the dollar's
default, American's are ignoring all the signs of collapse.
I would like to add one little piece of information to this story … give a little thought what will happen to the world if the dollar collapses. What will happen to the Euro? What will happen to every national currency? They will all inevitably collapse. The fall of the dollar will have world wide reprecussions that will make this current financial crisis look like a slight market dip. This simple fact is all that is holding the dollar up right now … if there wasn't such an immense world wide dependence on the Dollar, it would have collapsed long ago.
Clark, regarding gold prices, I watch the market daily. It is far from stable. Just a few weeks back it touched $1000, and right now it is trading at $910. It is a very fluctuating market, and currently a far more stable investment than the stock market … in case you haven't noticed.
I am sitting here at a Internet cafe in China trying to figure out how to exchange dollars. I am having a tough time, no one wants them.
This is my first trip to China and I was told that American dollars are no problem. Well from what I understand a few months ago that would have been true, but now the rules are changing.
I am told not preferred, not preferred! I had to almost pay double for a meal because I wanted to use dollars.
It is good thing that I have visa card because it exchanges dollars to Renminbi. (RMB)
The dollar is hurting and I see that now that I am not in America.
Greg
NO – AMERICA WILL DEFAULT.
CCF
I want to share an observation.
I live in Brazil and the dollar is becoming a taboo status symbol. Locals have very little good to say about the USA.
I may have to move it is getting so bad.
Manfred
The real issue is probably going to be the nature of the crash. Lots of people want to believe as Stephen Roach and John Maudlin that we will "muddle through" before the crash. "Muddle through," my butt. Not with $100 trillion dollars in debt world wide and a US government debt of $70 trillion. In my opinion, we're going to have a sudden, surprising to most, catastrophic crash……..
Blacksea
Hillary Clinton is the living example of everything that's wrong with America. She's a Communist AND a castrating feminist. You can't find a more un-Godly, more un-American combination than that.
Sam I Am
Although I don’t think US will default, it would be very interesting to see what would happen if it did. We could be on the verge of the world’s first economic war. A large proportion of US debt is held in China so there is an interdependency of sorts. But if China calls the debt in, the US collapses through lack of funding. If the US defaults, China lacks the funds to continue growing. It is not a huge leap of fantasy to assume that strategists in both countries are weighing up the possibilities of deliberately manipulating economies to damage rivals. In the long term, if China can’t expand, Brazil, Russia or India could step into that gap, and would have an interest in supporting a US attack on China. If the US collapses again, Brazil, Russia, India (or possibly EU, but less likely as more dependent on US$) would be in a position to be come the consumer market that the US currently is. It would be a military-free conflict, but I suspect it would change the world as dramatically as WW2
Hey Matt,
A few years ago I would have said that the USA would never default, But…
I think what I see may happen is they will inflate their way out of debt. But that will be the same as creating a economic war. It would piss the world off because all their dollars would be worthless.
I still see very rough times ahead and who comes out on top will be different than who went in…
Thanks
Kyle
Just remember back in 1998 the US had a budget surplus and Russia had financial crisis and defaulted on it’s loans.
Things can change very fast. Don’t count out the USA so fast. I heard the same thing back in the 1980′s about how Japan would surpass the US economy; it did’t happen.
I just needed to say that I found your blog via Google and I am glad I did. I will make sure to bookmark you for when I have more free time away from work. Thanks again!
I have lost hope that they will repay the debts. I think they will inflate their way out of the debts and in turn start a world crises. Then it will get out of hand and we will have Zimbabwe of the USA! That is my -99 cent worth.
No the USA will not beable to and us in China know this! DO YOU?