...U. S. dollar will collapse before July 2009

[WhiskeyGirl]

"Here's something to ponder: how prepared are we to carry on our life without money?"

John Maynard Keynes, the architect of our post-war financial system predicted that, as the volume of money increased, and its interest rate would fall, "money would abolish itself."

Is that now coming true? Today the interest rate on U. S. bonds is zero per cent, while the global volume of money has become an avalanche, as everywhere governments are pouring funds -- dollars, pounds, euros, yens -- into their economies, threatening the value of money.

Eisenhower ran a surplus. Hitler governed a police state, enforced strict price controls, used millions of slave laborers from occupied countries while diverting wealth from Jews and the rest of Europe -- $24 billion from Holland alone -- to pay for his conquests, and even then was dead broke in 1945.

Where will Obama get his money, or Britain or the rest of the world? They all are doing it the Hitler way, issuing paper promises to posterity. No wonder the GEAB -- the Global European Anticipation Bulletin -- a think tank specializing in economic forecasting and accurately predicting this fall's banking bust -- believes that the U. S. dollar will collapse before July 2009, a mere six months from now, reducing its value to close to nothing.

As James Buchan in his book "Frozen Desire" states: At Hitler's death -- a dozen years later -- the Germans possessed 70 billion Reichsmarks in worthless coins and banknotes and 380 billion in obligations of a regime which no longer existed. ... Germany had been converted into money and destroyed. ... A whole nation fell prey to the monetary delusion in its most extreme form." What a fitting description of today's monetary mess.

I'm not sure how anyone can spend their way out of trillions of dollars in debt.  Somehow, spending more and more is not good.

The U. S. Government Accountability Office (GAO) estimated last year that the unfunded obligations for medicare and social security totalled $41 trillion. Add the current national debt of $10 trillion and each the 116 million households there carries a debt of $439,000, not even considering personal and mortgage debt, which would increase the total to well over $500,000.

"Today, 60 years later, bailouts are back in. But this time, there is a big difference."

"Now America itself needs a saviour."

http://www.intelligencer.ca/ArticleDisplay.aspx?e=1350778

In the current American fantasy, we are told not to worry about the deficit for the next two years - there will be no money, maybe some will be able to barter.  Perhaps when people cannot pay their property tax bills, government will own almost everything.

Who will own America?  Foreign investment companies?

[WhiskeyGirl]

Forgot to add - JMHO

[WhiskeyGirl]

China moves to make yuan global currency news 
 
26 December 2008     

Armed with a staggering $1,89 trillion in foreign exchange reserves, the Chinese government announced the first step towards making the yuan, its currency, an international currency, by allowing it to be used as a mode of payment in business deals with some neighboring countries. The move would also curb the effect of the volatility of the dollar on trade settlements.

Some Chinese experts are hesitant on fully converting the yuan citing the Asian crisis of 1998 where the country came unscathed because the yuan was not fully convertible under capital accounts and was also the main reason why it has not been affected fully in the current global financial crisis.

They also believe that by liberalizing the fund flow, the economy will be susceptible during regional or global economic crisis.

http://www.domain-b.com/finance/general/20081226_yuan_global_currency.html

What is the new administration working on to make the US less susceptible to a regional or global economic crisis? 

It may be fine to say a nation rises and falls as one nation, but should all states or communities fall because of the weakest link?  Corruption?   Indifference?

jmho

[jjayinthemorning]

There will be some other events before this collapse. Pakistan and Indian nuclear war. The elimination of Israel but not before lots of damages in Iran and Syria.

But what will be the means of trade when the dollar disappears? Will we have to take our jewelry to the store? Will woman become prostitutes?

[WhiskeyGirl]

There will be some other events before this collapse. Pakistan and Indian nuclear war. The elimination of Israel but not before lots of damages in Iran and Syria.

But what will be the means of trade when the dollar disappears? Will we have to take our jewelry to the store? Will woman become prostitutes?

I'm not sure what life will be like.  I would imagine it would be like countries that have hugh debts and irresponsible governments.

Hyperinflation - that loaf of bread that cost $3 today, will cost $10 tomorrow.

Child prostitution, homelessness, etc., just like in those places you watch on tv.  Will it be the faces of American children?  Will anyone else on the globe care?  Have the money to send and sponsor an American child?  Family?

Will there be money for schools?  Law enforcement?  Military defense? 

I do believe the spending spree will end.

jmho

[WhiskeyGirl]

DECEMBER 29, 2008

As if Things Weren't Bad Enough, Russian Professor Predicts End of U.S.
In Moscow, Igor Panarin's Forecasts Are All the Rage; America 'Disintegrates' in 2010

By ANDREW OSBORN
MOSCOW -- For a decade, Russian academic Igor Panarin has been predicting the U.S. will fall apart in 2010. For most of that time, he admits, few took his argument -- that an economic and moral collapse will trigger a civil war and the eventual breakup of the U.S. -- very seriously. Now he's found an eager audience: Russian state media.

Is there any nation that used "spending their way out of a depression" and survived?  Does such spending lead to prosperity?  The new administration seems to want to escalate the economic collapse.  After the collapse, who will lead the rebuilding?

Mr. Panarin posits, in brief, that mass immigration, economic decline, and moral degradation will trigger a civil war next fall and the collapse of the dollar. Around the end of June 2010, or early July, he says, the U.S. will break into six pieces -- with Alaska reverting to Russian control.

I wonder what the six pieces are?

California will form the nucleus of what he calls "The Californian Republic," and will be part of China or under Chinese influence. Texas will be the heart of "The Texas Republic," a cluster of states that will go to Mexico or fall under Mexican influence. Washington, D.C., and New York will be part of an "Atlantic America" that may join the European Union. Canada will grab a group of Northern states Prof. Panarin calls "The Central North American Republic." Hawaii, he suggests, will be a protectorate of Japan or China, and Alaska will be subsumed into Russia.

The article includes a color map of the new nations.

Interest in his forecast revived this fall when he published an article in Izvestia, one of Russia's biggest national dailies. In it, he reiterated his theory, called U.S. foreign debt "a pyramid scheme," and predicted China and Russia would usurp Washington's role as a global financial regulator.

Yup, US foreign debt is a pyramid scheme, and it's escalating in 2009 forward.  Mortgages people couldn't afford, goods and services they couldn't afford, and not enough people on Capitol Hill to address the problem that was growing for years.

Americans hope President-elect Barack Obama "can work miracles," he wrote. "But when spring comes, it will be clear that there are no miracles."

The great deception...promises, promises, promises

Spend, spend, spend...

http://online.wsj.com/article/SB123051100709638419.html?mod=googlenews_wsj

[WhiskeyGirl]

just my humble opinions

[WhiskeyGirl]

Worse Than I Thought! ...

December 28, 2008

Everything in the following is write on mark. The ony question is the timing.

Federal Reserve sets stage for Weimar-style Hyperinflation
by F. William Engdahl

Global Research, December 15, 2008

Despite this, banks do not lend further, meaning the US economy is in a depression free-fall of a scale not seen since the 1930's. Banks do not lend in large part because under Basle BIS lending rules, they must set aside 8% of their capital against the value of any new commercial loans. Yet the banks have no idea how much of the mortgage and other troubled securities they own are likely to default in the coming months, forcing them to raise huge new sums of capital to remain solvent. It's far 'safer' as they reason to pass on their toxic waste assets to the Fed in return for earning interest on the acquired Treasury paper they now hold. Bank lending is risky in a depression.

Making the situation even more drastic is the banking model used first by US banks beginning in the late 1970's for raising deposits, namely the acquiring of 'wholesale deposits' by borrowing from other banks on the overnight interbank market. The collapse in confidence since the Lehman Bros. default is so extreme that no bank anywhere, dares trust any other bank enough to borrow. That leaves only traditional retail deposits from private and corporate savings or checking accounts.

To replace wholesale deposits with retail deposits is a process that in the best of times will take years, not weeks. Understandably, the Federal Reserve does not want to discuss this. That is clearly also behind their blunt refusal to reveal the nature of their $2 trillion assets acquired from member banks and other financial institutions. Simply put, were the Fed to reveal to the public precisely what 'collateral' they held from the banks, the public would know the potential losses that the government may take.

The US taxpapers own the 'worst' paper - nothing but ashes.  No value when paperized, no value today, no value in the future. 

In the period from August 1929 until he left office President Herbert Hoover oversaw a 43-month long contraction of the US economy of 33%. Barack Obama looks set to break that record, to preside over what historians could likely call the Very Great Depression of 2008-2014, unless he finds a new cast of financial advisers before Inauguration Day, January 20. Required are not recycled New York Fed presidents, Paul Volckers or Larry Summers types. Needed is a radically new strategy to put virtually the entire United States economy into some form of an emergency 'Chapter 11' bankruptcy reorganization where banks take write-offs of up to 90% on their toxic assets, that, in order to save the real economy for the American population and the rest of the world. Paper money can be shredded easily. Not human lives. In the process it might be time for Congress to consider retaking the Federal Reserve into the Federal Government as the Constitution originally specified, and make the entire process easier for all. If this sounds extreme, perhaps revisit this article in six months again.

Sounds like a good reality check.  The country is broke and getting broker each day, and the Obama administration is going on a spending spree. 

Perhaps "Very Great Depression of 2008-2014" is the Obama generation legacy.  Not the friendly memories like FDR, just the harsh reality that nothing was done to put the nation's finances in order.  Just spend, spend, spend--like there is no tomorrow. 

http://caps.fool.com/blogs/viewpost.aspx?bpid=123774&t=01004994858403520305

jmho

[Edward]

Everything you are posting is right on the mark..
I had posted the trades journal report some time back and it is right on track also..
Looks like we are in real trouble..
jmho

[jjayinthemorning]

This is my dilema, do I spend money now to save money later? Or do I save money because I will need more in the future?

[WhiskeyGirl]

Beyond The Age Of Usury

From the desk of Sharon Kayser on Fri, 2009-01-02 13:03

"It is generally agreed that casinos should, in the public interest, be inaccessible and expensive. And perhaps the same is true of Stock Exchanges." — John Maynard Keynes
What is particularly fascinating with John Maynard Keynes is that he wrote a theory that only works on paper since it assumes that monetary, political and financial managers will never abuse the power of indebtedness. So, what to think of this worldwide credit squeeze and its implemented cure that is no more less the cause of the disease and could spiral at any moment into a 'Greater Depression'. ... Mankiw cites the observation which links the root cause of economic downturns to insufficient aggregate demand. What demand when the consumers are completly tapped out in the first place? How can world governments create demand when they are literally bankrupt?

Many seem to believe that Obama will help the nation spend it's way out of debt, depression, and joblessness.

...the American bailout is reaching epic and fatal proportions of more than 8 trillion and the worst is not over yet. Actually, the current trends are already much worse than depression, though because of some banking toxic tricks and frauds, risks are being constantly shifted down the social ladder deteriorating the consumers purchasing power for ever....

...What is truly outraging is that we board onto the Titanic because Credit Rating Agencies sold us a fictive 'star system', which has led us to a triple A junk status....

Intended Massive Failure
These days, capitalism bashing runs high on the agenda of many pundits, and for which they blame in the name of evil unregulation. They deliberately neglected to consider - and report - that lobbies have militated restlessly to bypass them one way or another. This real estate bubble, now bringing the financial system on its knees, was made possible with the intended failure of regulation. It was regulated to be this way.

...This all highlights the gap between people's creativity and their needs.We are truly heading toward a terrifying and inevitable crisis of civilization and this is our very last warning before being plunged into an era where money and food will be scarce for many years to come. Wars may well be the only weapons of unethical governments if civil unrest on a large scale threatens their very existence; they will resort to armed conflicts which will have been financed by their taxpayers. Yes, you got it: usury also allows killings and destruction to be a lot more devastating. Contrary to the popular belief, money is not the root of all evil but usury is.

http://www.brusselsjournal.com/node/3724

Stock up on food and basics before you have no money...

Sharia financing here we come...

jmho

[WhiskeyGirl]

The news continues -

The dollar implications of this should be clear

After years of bankrolling US consumption with the purchase of dollar assets, most nations are going to be net sellers of dollars in 2009. Just Russia, Saudi Arabia, India, and Japan alone have around $2 trillion in US holdings, and, if the current trade trends continue, America can expect foreign central banks to sell at least 1 trillion dollars this year. This begs the question: who exactly is going to be buying all these assets?

2) The worsening US Trade deficit
The US Trade deficit is worsening because, while imports to the US are falling, exports are falling even faster. Demand for the big ticket durable and capital goods produced by "developed" nations is plummeting much faster than demand for cheap consumer imports, causing widening trade deficits with nations like China. The US's increasing trade and current account deficits means that America needs to attract over 700 billion dollars this year to keep the dollar from weakening.

3) Treasuries
It is extremely important to understand that treasuries are the modern day equivalent of money under the mattress, and that, when a crisis confidence hits the dollar, treasuries will be redeemed for printed cash from the fed. This is due to the fact that the US can't allow treasury prices to crash, for fear of having the world's financial system break down and global trade collapse. So a sustained selloff in treasuries would therefore force the fed to expand its balance sheet by trillions to monetize much of the outstanding federal debt.

6) Never ending bailouts
Although many Americans such as myself are growing tired of America's never ending bailouts, it is important to brace yourself because there are a lot more on the way. Here are a few of the bailouts we will be seeing this year which haven't gotten much media coverage.

A) State government bailouts
State budget troubles are worsening . States have already begun drawing down reserves, and the remaining reserves are not sufficient to weather a significant economic downturn. Also, many states have no reserves and never fully recovered from the fiscal crisis in the early part of the decade.

B) Unemployment bailout
State-funded trusts which pay unemployment benefits are running out of money...

C) Pension Benefit Guaranty Corporation ( PBGC ) bailout...

The true moral hazard of bailouts
Most commentators misunderstand the true moral hazard of bailouts. While bailouts might have an adverse effect on the future actions of individuals and businesses by encouraging risk taking, the real problem is their effects on future actions of the government. Specifically, each bailouts makes it harder to say no to the next bailout. This pressure to fund future bailouts is made far worse if those receiving bailout money are truly undeserving. After all, If the government is going to give $45 billion to Citigroup (one of the banks responsible for our current mess) and insure $306 billion of its riskiest assets, then how can it say no to bailing out the state of California or South Carolina?

7) US budget deficits and (lack of) Tax revenues
The federal government is a facing record breaking budget deficit in 2009. According to the latest government figures, the deficit currently is expected to be $438 billion. For a reliable idea of what our 2009 deficit will look like, to this number we need to:

A) Add the cost of funding the on-going wars in Iraq and Afghanistan
B) Add the cost of recent programs such as the TARP
C) Add the cost of current and future bailouts for the auto companies
D) Add the cost of another stimulus package
E) Add the cost of the programs promised to us by the new administration

After subtracting a further 500 billion for lost tax revenues due to our collapsing economy, it is easy to project a budget deficit of at least 2 trillion. So far, the deficit now totals $401.6 billion in just the first two months of this budget year, and, at this annual rate, the budget shortfall is already on track to exceed our expected number. All this isn't even taking into consideration our long term funding shortfall vis -a- vis baby boomers (the future of social security and Medicare is, unfortunately, clear: I would not expect it to be there when you retire (at least not anything like it is today)).

Don't worry about the children
For years Americans have worried about passing on our enormous federal debts to our children. Well there is good news on this front: you don't have to worry about the children anymore. America's massive debts aren't going to be paid for by a future generation. They will be paid for today through a massive devaluation of our currency.

Scary charts

Charts and other visuals can fully convey the magnitude of our current economic crisis in a way words cannot. With 2008 over now, expect to see some truly terrifying graphics depicting just how badly the US economy self-destructed last year. Here are two examples of what these charts will look like:

The US has managed to outsourced its industry to the point of total dependency on foreign imports for its basic consumer goods, energy, and, to an extent, even food. The US can today claim the exalted status of the most indebted nation in human history, with every level of society (individuals, corporations, local/state/federal governments, etc) owing an unpayably large amount of money. The US capital markets have been tarnish by widespread financial failures, haphazard bailouts, and blatant corporate corruption, the latest being the Madoff's ponzi scheme. There are also growing doubts about how much gold, if any, are left in our reserves.

This is where the clear cutting of the old growth forests starts.  Need rare and valuable things to sell...if anyone wants them...

We won't drill for US consumers, but will poke holes in anything to reduce the debt...

http://marketoracle.co.uk/Article8031.html

The Obama administration plans to continue spending with wild abandon and the amount of pork will be astronomical!   

I'm kinda sorry I read this opinion piece...   


jmho