[quote=Radiance3]
RT friend wrote:
The injection of such an enormous amount preceded the •25% interest rate cut by days that shows either there was a pent-up demand or speculators were waiting to take advantage of inside information, that Trump telegraphed out.
Ans.
The cut in interest rate of .25%, due to the rough week in the overnight funding market, where interest rates temporarily spiked to as high as 10% for some t***sactions Monday and Tuesday.There was no pent-up demand The economy was rolling along just fine and dandy.
Kim Iversen says there was $53 billion on Monday $ 75 billion on Tuesday and $75 billion new money issued on Thursday by the Fed to be made immediately available to all local banks.
There was no bonds sold to cover that $203 billion, and there won't be any, that money is not being used to purchase collateral to be held on the Central Banks balance sheet, as far as I know it's just being borrowed by local blank customers at interest rates well below the market value.
I think this is happening because the banks are lending a******lly and can't balance their books any other way except by $203 billion being issued to keep interest rates low.
If the USD was any other currency this decision would be inflationary, but because the USD represents 62% of international foreign exchange reserves it will go unnoticed, although the other 38% of reserve currencies held by all Nations become less secure because of the the $203 billion injection by the Fed.
Ans.
Kim Iversen is nobody but a progressive You Tube commentator, who lied about the release $53 billion, $75 billion, and another $ 75 billion which total to $203 billion. The correct amount was $53 billion and $75 billion total of $128 billion, and not $203 billion. The purpose of that was to add liquidity to the banks due to high demands of credit. In addition, bonds matured that the banks had to repurchase thus reducing bank's liquid assets.The US isn't exporting anything to maintain this extra-specia international position the USD is just one part of a system in which the USA, Europe, Britain and Japan take turns in being the strong safe haven currency to absorb hot money flows that have to go somewhere other than into gold, precious metals, Russia or China.
At the moment Europe has started Quantitative Easing so their currencies will get an artificial stimulus while the fiat currency system remains credible because investors who are desperate for a secure yield go to the US.
But because the US doesn't ever have a surplus of Trade, not ever, there is no tangible reason fot the strength of the USD outside of international political arrangements.
The European currencies will have to regain value without artificial stimulus to maintain those political arrangements, the war in Yemen that Trump is maintaining in spite of Congress is one problem I agree.
So the USD will have to decline in value for the €,£ and ¥ to recover and they then can take a turn accommodating the hot money flows while the USD recovers with artificial stimulus, this is the present fiat system.
But if the yield in US bonds dries up concurrently with European, British and Japanese bond yields the fiat system could collapse.
The World can't have only one single strong currency, because even if the US did achieve a surplus in the Balance of Trade Account there would be no way for Nations to get $'s and put them into their foreign reserve holdings.
Ans.
US dollar dominance did not start at president Trump.
The United States became the lender of choice for many countries that were willing to buy dollar-denominated U.S. bonds. In 1919, Britain was finally forced to abandon the gold standard, which decimated the bank accounts of international merchants who traded in pounds. By then, the dollar had replaced the pound as the world’s leading reserve.That financial situation that Trump is trying to achieve is known as a Tributary Demand System, if other Nations accepted this from Trump they would become vassal states and be broken up immediately.
Ans.
To summarize you have concluded that president Trump has achieved a Tributary System that will make other nations subordinate to the United States.
You are wrong. The success of president Trump's economic development in the US has no bearing with the ambition of Tributary System. This Tributary System has existed since 1898, and even begun from the time of the US independence from Great Britain. Here is the history how this begun. https://academic.oup.com/cjip/article/6/1/1/457227 The injection of such an enormous amount precede... (
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Gavin Menzies tells us it was the Chinese Tributary system that fuelled the Renaissance and t***sferred power from the East to the West, but that is not antiquity as your link states, personally I believe Menzie's claims because if that "didn't happen", - (China gave the West the printing press etc. at the Renaissance of the 15 th. Century making Gutenburd's innovation anachronistic ), - the outcome of (p) Abrahams Religion and Western Religion in general would not be relevant to Universal Destiny.
Also what makes this analogy even more credible is the fact that the Chinese State who perfected the Tributory System and sent all their knowledge to the Renaissance meeting in Venice, so as to put the West in an indebted position, became defunct within decades of doing the deed.
Debt is the basis of the Tributory System couldn't agree more, $ bills are iou's.
It was after the second World War that the USD became the Global Reserve Currency before that the British Pound Sterling was top dog.
I mentioned Kim Iversen because in her episode when she made known to me the $203 billion currency injection the episode is titled "Are We Headed For A Big Economic Crash" she is supporting Trump, she claims Trump didn't bully anyone and the Fed is afraid of Sanders and Warren wanting to regulate, I just laughed.
Actually the Central Bank doesn't have to make known cash injections that are mandatory with on going economic expansion QE 3 ended in the US on October 2014 with the US Quantitative Easing being tapered down to $10 billion a month from $85 billion a month, so even your appraisal of $128 billion is massively significant in terms of Easing.
The other thing is that after 2009 when Obama began QE 1. when Britain and Japan were doing it too EU was a bit slow to start March 2015, the question is, why didn't the fiat system collapse then ?.
It was because China and Australia were not that badly affected by 2008 so we are best able to advise about the future.
Chinese and Australian "financial credibility" saved the day, Australian banks were forced to quit all criminal practices by the Labour Government earlier on, and China wasn't involved in selling garbage as securities.
But next time a big crash comes China, India, Pakistan,Turkey and Russia will pull the plug probably Germany too and just say let's kiss our bad debts good by and start again, dump the IMF and World Bank.
We don't know what Britain would do but Japan is now becoming isolated from the Asian markets and looking for help from Russia so if the economic crash does come Trump could be alone, the USD is isolated at the moment as the only currency performing well but alone all the same.
Probably the Eurasian economies will tie up with China and Russia who are ruthlessly mercantile, profit means very little to them everything is long term and chiseled in stone, probably, we are now back in the barbaric age, and the worst place to be is on the losing side.
I personally think the Tributory System is not the answer, its no longer a part of economic development because if you accept payment in iou's in exchange for goods and services the only reason that contract will be on-going is if the indebted person, namely the US, will be fulfilling some absolute need in the near future for a substantial group of other people, and thereby maintaining the value of the iou. ($), that is an impossible commitment to keep in the long-term.
I think everything will be recalibrated on the basis of barter.
Trump openly admits - Saudi Arabia - "King, !! I said, !! you wouldn't be king for 2 weeks without the US, better purchase some of these weapons or else" , end quote, that's like giving a 10 year old a chess set with instructions written in Tibeten, its not really the Tributory System its the Mafia system.