UncleJesse Loc: Hazzard Co, GA

Spot on.

UncleJesse Loc: Hazzard Co, GA

The value of the dollar is the full faith and credit of the US to always pay off. That's where the world does it's banking. It does not have confidence anywhere else.

Patty

Jesse am I not understanding this correctly?
http://thebricspost.com/china-yuan-hits-8-month-low-against-dollar/#.U5IQvLlOXIU
I always thought when a currency dropped in basis points to another currency the oone that dropped got more valuable. Seeing as it took less of that currency to 1 dollar.
I never traded forex but always thought that was the case. aS IN THIS CHART AS IT GOES DOWN TO THE DOLLAR IT IS WORTH MORE CORRECT? (opps caps)

rickdri

Yes but it also prevents a currency crisis, gives more stability to a currency, and if followed correctly it will prevent the crooked law makers and their criminal business cohorts such as the bankers, from driving the economy into the abyss. A currency has to be backed by something of value. Not just the faith you have in a government full of corrupt people. Fiat currencies which is what we have all over the world now, can only last so long. The system becomes corrupt as the criminal bankers know they can get away with anything now. No one has went to jail or has even been punished by the law for pushing us into a near economic collapse.
I do understand everything you are saying. It would be great if we could use fiat currencies until the end of time. Currencies without anything of value to back them. However people are just too crooked and money hungry to let the system operate the way it should. Someone is always wanting to game the system for the own political, or financial gains. Gold and silver will help to stop that from happening.
Gold doesn't actually stop growth. It merely slows the system down to prevent an economic collapse the likes of which we are facing today! Growth will come just at a safer and less risky pace. It also prevents the overspending and recklessness that goes along with fiat currencies. If you can only print the amount of currency that you have backed by gold or silver, it will be difficult to run up deficits and for politicians to make up programs and spend money to buy v**es.
I guess safety and t***sparency, a couple of things we seriously lack today, are what gold provides. Too many underhanded deals are done by the elite at the expense of we the peons of the world!

Patty

I wrote this this moerning after finishing Rickards book "The Death of Money"
Mishkin (Bernanke's mentor) has determined that the Central bank (fed res.) is on the brink of insolvency. Mishkin warns that the fed is c*********d and dangerously close to it independence being c*********d and its sole purpose is now to monetize debt through inflation.
Larger deficits and higher borrowing costs will cause a death spiral and countries will have to chose of austerity or defaulting on the debt. Austerity hurts nominal growth worsening debt to GDP ratio and can cause a debt default while trying to stop one.
They have taken the policy of monetizing the debt to give them time and keep interest rates on the debt under control.
This is a double edged sword in that "printing causes a lack of confidence in a currency. Miishkin describes this as "fiscal dominance" and the debt will have to be satisfied by issuing monetary assets and will cause inflation while the fed tries to lower it due to the gov debt. So despite the feds policy to control interest rates it nflation will be produced.
Swapping long term debt for short term makes the gov more vulnerable to lose of confidence and flight from the dollar. (treasuries).
The fed thinks they are managing a reversible process and that is not the case through out history. Turning deflation into inflation through money creation is irreversible.
From 2009-2012 the fed monetized 1.2 trillion the bankers jobs and bonuses were saved but only replaced private debt with public debt. This debt is unpayable in real terms and default for smaller economies are happening now. (Cypress, Greece, Argentina). Larger countries will deal with this through inflation and will steal the savings, deposits and bond holders alike.
Deflation is rooted in depressionary psychology and not in the control of the policy makers. Investors start to save and hoard money to avoid risk. Once deflationary thinking occurs it is not reversible through crutched up stock prices and rising housing market numbers as shown that despite record highs in the markets volume continues to be very low and the housing market is not fueled by family ownership but developer purchases. The fact that central banks are doing all they can to cause inflation but other than food and fuel prices continue to deflate are a sign that the demand is low and confidence is gone. No consumerism means deflation.
Historical when currencies hit this point a new system is needed to restore confidence. as was the case of the Sterling replacement from 1925-1944 and the replacement of the gold standard from 71-80.
Three things can happen. 1 a world currency in SDR's; 2 is a gold standard; third is social disorder.
SDR's is already in the works and has been a pet project of Soros/ Popper since 1969. It increases SDR through the IMF through SDR based investment assets, issuers, investors, and dealers. Its not the debt but the derivatives that are out of control that would push this system into play before it is ready. China will insist that it is not used to save the dollar but to replace it with the yuan. The dollar will be devalued to the new SDR and cause massive inflation and adjustments will have to be made as they will have to be earned through global competition and not printing.
Gold standard is another way and could arise from the massive inflation and lack of fiat confidence or through deflation where the dollar is revalued by by the gov to increase general price levels and has been suggested to peg at $9000.00 an oz. Revaluation of gold would have to be sufficient to support global trade and cause inflation in the USD and would wipe out savings of all kinds.
Social disorder is pretty self explanatory and will as usual create f*****m and gov condoned theft.
Originally it was the baby of Mussolini from an extreme left leaning agenda. Today the distinction lies in the division of those who want more state power thinking they can fix it and those who want more liberty. In the state ontology order comes before liberty or justice.
Seven signs.
1. price of gold either way could signal a buying, uncontrolled buying frenzy and price drops could signal an out of control deflationary policy.
2 Banks continued buying up gold. Remember this was written in 2011 and we are already seeing this happen as is true in a price drop last year.
3. IMF governance reform. China is already gather more v****g power in the IMF so that has occered since this was written.
4. Failure of regulatory reform. The banks lobbist are beating down the members of congress that are trying to bring back some of the basics of the Glass- Steagall main provisions. They are losing since this was written.
5. System crashes like the one on May 6th 2010 when the market dropped 1000 points in minutes. On August 1st 2012 Knight Trade computer debacle wiped them out and these types of occurances as we have seen markets shut down due to glitches that have occurred several times in the last couple months should not be seen as flukes but as cyber wars are being perfected there are little safe guards left.
6. Is the sustained down turn to assets buying of the Japanese and American treasuries which is also occurring.
7. A Chinese collapse of the economic Ponzi scheme that is all economies now world wide. We will sewe c*******t China stealing the assets of sovereign investors and further efforts to either cap or devalue Chinese currencies to stimulate trade.
The last section is on what to do. If anyone reads this and wants me to "nutshell the conclusion I will be glad to but don't want to continue if there is no interest.
Thanks for reading
Patty.

rickdri

Sure I would like to read it if you have time to do it! Everything you have written is exactly what I believe will happen. Thank You in advance if you find time to finish! As always excellent post!

UncleJesse Loc: Hazzard Co, GA

Yes, it is confusing. The chart for 2007-2008 you posted shows if you bought 770 dollars with 100 RMB and exchanged it a year later you would get a loss, only $700 in return for your 100 RMB. The opposite has occurred since February which is the source of some of your posts (605 to 625 dollars with 100 RMB). It has dropped (strengthened) since then due to the c*******t government intervention.

The opposite of the chart is what to consider. CNY/USD. It had been on a weakening trend for a decade and had been the expectation. But since it has strengthened, you are getting less RMB for the dollar investment since the February intervention.

What is uncertain is if the stronger RMB actually creates an increase in exports or is just a temporary bump to slow the foreign purchase of RMB.

Floyd Brown Loc: Milwaukee WI

No our National Debt is the backing for our money. It is you & I & others like us that are backing our debt.

rickdri

Yes and most Americans are having to use debt just to buy the things they need! This will not end well either!

UncleJesse Loc: Hazzard Co, GA

Personal debt is low. The bankruptcies and downsizing the past few years along with the difficulty in being able obtain a loan to increase personal debt is at a 30 year low. There's plenty of economic growth potential but obviously, everyone is into savings and decreasing debt.

http://www.research.stlouisfed.org/fred2/series/TDSP

rickdri

Go to FRB G.19 release consumer credit federal reserve system. It contradicts this report.

Patty

:thumbup: Thanks.

Patty

Today the man who made one of the greatest market calls in history stunned King World News when he said that former Greek Prime Minister George Papandreou confessed to him that there were “deep discussions” which had already taken place about a new “monetary order” that would include a new reserve currency which would take the place of the U.S. dollar. This was a truly remarkable admission from Papandreou, and even more astonishing was the fact that the former Greek Prime Minister was so candid in answering Davies’ contentious question.

King: “Ben, I know you had a chance to meet former Greek Prime Minister George Papandreou very recently. It was fascinating what t***spired. Can you share that with KWN listeners (and readers) around the world?”

Davies: “Yes. It was very interesting. I was at a conference listening to him speak. He very kindly gave me a small audience afterwards. I found it very revealing. I asked a very contentious question and he had the good grace to answer it in a very thoughtful manner....

“What I actually asked him was, “Were you aware of the comments by the former Bundesbank Vice President and former ECB (European Central Bank) board member, Jürgen Stark, where he suggested that the entire financial system is ‘pure fiction’ and that it was vulnerable to a collapse because of all this infinite money that’s been created?” I went on to ask, “Had policymakers at the highest level discussed a change of the monetary order when you were in charge of the Greek political system?”
He (Papandreou) was very thoughtful about this. He said to me, “Yes, beyond austerity, beyond reforms, there had been deep conversations about how to change the monetary order.” I asked, “Did this include a gold standard?” What he told me was, “It was about exploring a basket of currencies that could involve an asset like that (gold).”

I asked, “Are you referring to an SDR (Special Drawing Right)?” And he said, “Yes. It would be along those lines.” He wasn’t trying to hide anything. He was very candid about it. But it was a very interesting exchange. It’s not often that you have these conversations.”