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I finally get it now , Paper Money is now simply printed any place any time , it was once tied to gold holdings , its now tied to Fraud or empty promises only .

Just like we assume the Man in the Italian suit and Rolls Royce car is Rich to all who sees Him , that is the perception , but , truth may be he actually owes more than you.

So, that means you are happy to send me all your worthless currency?? No, I didn't think so.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

I will quite happily send you all the redundant, out of date, worthless fiat notes I have from previous failed currencies. My old Gold and Silver coins though will be staying with me, they may have been issued at the same time as said notes, but while one is worthless,...the others value has increased at least 10 fold, thank you.

Another point on value...a silver quarter could've filled your tank with gas in 1953

The very same silver quarter can still fill your tank with gas today!

Thats the problem Peter, you don't seem to understand the intrinsic purchasing power of real money and how fiat destroys currencies. Never has fiat strengthened a currency in the long term, it has just allowed more and more un-secured debt to be quantified as assets that can be re-hypothicated again and again to the detriment of everyone else.

Asking to live within finite boundries on a finite planet is common sense, as opposed to apologists thinking in a finite planet we should live by infinate means..lunacy. It's long overdue getting our house in order and sorting this system out...it isn't that old itself and certainly isn't the only one we should be looking at.

I'm a huge fan of capitalism, but what we are doing at the moment isn't capitalism at all, when passing the cost off their corrupt failings to the people.... it's bordering on fascist.

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Looking for South Korea up to 1884-1951,North Korea 1st issue 1946-1957,China 1898-1912 and P.R.C 1963- 1980,Thailand 1883- 1918, Commonwealth QV Issues.

Peter, this is what you said...'the USD is all anybody wants today'. My response was that that there are moves away from the US dollar with several of the major economies negotiating between themselves to trade in each others currency or in gold or other tangibles. Whether this is a 'substantive' move is unclear to me at present- probably to you too as we have yet to see this move play out, but it is apparent to those with an open mind that not everyone (anyone) is happy with the USD.

Maszki, the trading in other currencies and even gold is a minute fraction of the trade between countries. China will not be floating it's currency any time soon, since it has been kept artificially low and would appreciate significantly if allowed to trade freely. That would remove a significant competitive advantage China has in it's manufacturing and export industries. The implications, for the Chinese Government, are not in the slightest bit palatable.

On the other hand, the US would love to see a depreciation of the USD against currencies like China's. It would provide a boost to the domestic and export economy.

And I repeat, you may not like the fact that the USD is the world's reserve currency, you might not like the fact that the USD is seen as the main safe haven in times of economic uncertainty. Your dislike does not make the slightest bit of difference to the reality that is plain to all who are prepared to look.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

This one is worth an edit:

Kwesi, I find your additions to the post above by peters confusing. Could you explain in your own words what you mean?

Huanga

The red fixes some punctuation and style problems, not including some extra commas that were removed outright. The blue is my additions. Should be clear.

So you don't think anybody, except the Chinese themselves, should care about China?

As to trade being a minute fraction of the world economy, I was responding specifically to maszki's statement that the BRICs were beginning to trade in currencies other than the USD. You should consider the context before making idiotic statements. In any event, your assertion is inane in and of itself.

In the modern world, no one country is totally self-sufficient or able to completely isolate itself from the rest of the world. Not even North Korea can manage that, despite giving it their best shot (and starving many in the process)!

BTW, continue to 'correct' what you like. However, correcting hunga's use of my id (peters) is going beyond the call and straying into the idiotic.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Agreed!

The U.S. did attempt to adopt an isolationist policy under Roosevelt's (FDR) reign in the Whitehouse ... but that quickly ended with the Pearl Harbour attack.

To paraphrase a well-known saying: "No nation is an island." Not in the world we know today, at least.

Are you some kind of amateur historian/economist? What's the connection between an isolationist policy and Pearl Harbor? Let me ponder this...Isolationist policies cause foreign invasions?

Now as you continue your dilettantism, you might look up "trade as a share of US GNP". You might try to find out also what the US really needs from the rest of this planet. Some one or two minerals from Katanga? Some sex tourism from Thailand? Wine and cheese from France? We certainly don't need Chinese plasticrap. This is a big country that can take care of itself. Perhaps Belgium, the Philippines, or Australia can't say that. Go ahead and "trade". Go get some toxic slave goods from China. Kill your pets with tainted Chinese pet food.

No nation is an island? Certainly not the Philippines...it's what, 7,000 islands? How dumb.

Now now chaps, let's keep the discussion calm.

PeterS, you started this particular section of the discussion with your comment "The USD is all anybody wants today."

My response was "Peter, this is what you said...'the USD is all anybody wants today'. My response was that there are moves away from the US dollar with several of the major economies negotiating between themselves to trade in each others currency or in gold or other tangibles. Whether this is a 'substantive' move is unclear to me at present- probably to you too as we have yet to see this move play out, but it is apparent to those with an open mind that not everyone (anyone) is happy with the USD."

Your following response "Maszki, the trading in other currencies and even gold is a minute fraction of the trade between countries." appears to accept that there are countries which do not want the USD- the difference between us being only as to extent.

Do I take it from this exchange that you finally agree that there are moves- particularly ( but not exclusively) by the BRIC group- away from dependence on the US dollar as a reserve currency.

maszki, dream on. The ideas to trial some variation in USD trade are just that, ideas. Hugo Chavez threatened to move all his oil trade from USD to EURO quite some time ago. Never happened.

In the present world circumstances, the over whelming trade currency is and will continue to be the USD.

Just to put the context right, btw, my comment that all anybody wants is USD referred to the market conditions on that day. Gold was down over US$60 an ounce and the AUD had fallen nearly 2c in value (against the USD, although it was up slightly against the EURO).

You need to check the context as well, before you start verballing me.

As for kwesi, I suspect he considers the Tea Party to be too leftist in attitude. He also needs to check his understanding of history before he verbals Eric.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Peter, I'm of the opinion Kwesi's thoughts originate from his stated location!! ...and therefore commiserations are called for in replying to his posts.

huanga.

Mod Comment:

Please comment on the arguments in the posts if they are on topic and not the member posting. If too far off topic I suggest that they be ignored with dignity.

Norm

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Geelong, VFA Premiers 1878, 1879, 1800, 1882, 1883, 1884, 1886, AFL Premiers 1925, 1931, 1937, 1951, 1952, 1963, 2007, 2009, 2011, .

Kwesi, whilst I don't agree entirely with what Eric says many EXTREMELY learned and published academics/international relations theorists do. Whilst you may (or may not) be right; please don't be that dismissive!

The below is NOT my view but is a pretty coherent and published argument which suggests US isolationism did lead to Pearl Harbour.

1) US claims to be isolationist.
2) Germany and Japan believe the US.
3) Balance of threats / powers is altered in Europe in Germany's favour.
4) League of nations loses credibility following Abyssinia.
5) Japan increasingly confident as European allies untroubled.
6) Japan becomes more brazen and invades Manchuria. (no fear of US or League).
7) Manchurian gamble backfires as Japan finds itself requiring more and more resources to support fast-moving, resource hungry forces.
8 ) US stops oil exports to Japan.
9) Defeat of US is required if Japan is to continue uninterfered.
--- couple more steps.
Pearl Harbour

Alongside this argument there are a few other nice little stories e.g. that German territorial gains in Europe result in Japan feeling minor player in alliance which support that argument.

Ben

Off-topic personal view:

I do not agree with the very first assumption that US claims to isolationism were credible. Whilst the US certainly claimed to be isolationist domestically. They played a key role in Europe during the twenties and thirties. Everyone forgets it was the US which drove the Dawes and Young plans, that US investment in Eastern Europe rose dramatically during the 1920s, that Hoover spearheaded the London Economic Conference (though Roosevelt did kill that..) and that the US was a key player in the inter-war naval conferences. Moreover, their behaviour from 1937 onwards was openly hostile to Japan (embargoes, build-up of troops in Phillipines etc).

That though is off-topic.

Sorry Peter- it's not a dream- it's a nightmare.
As I have several times said (and you conveniently ignore or publish irrelevant comment) there is a group of nations that are not enamoured of the US dollar as 'the' reserve currency.

Now, you can rail against it. deny it, ridicule it.. but it is reality

The US is a decaying empire. Many 'experts' already proclaim that China has surpassed the US as the world's largest manufacturer

US manufacturing and export is defence oriented- its leading exports are aircraft and defence system. Without conflict the US export market would collapse. God help the US if peace should actually break out.

In the meantime, what I have said remains valid. There is a move away from the US dollar as 'the' reserve currency. You are in a position to understand the currency swaps between the BRIC countries and the decision by Iran to continue selling oil to countries such as India outside the US dollar straight-jacket.

As an aside, the US is a victim of its own propaganda- I think they actually believe that they are still the world's number 1 power and not Rocky 7- the punch-drunk ex-champ.

Meanwhile, back to reality- the US has lost its role as the world leader in manufacturing, its GDP is now based on financial manipulations (over 50% of its GDP is related to financial services), it has massive debt and unemployment problems, low or no growth, its exports are predominantly defence or pharmaeceutical related, and its human rights record is abysmal and most importantly it has abandoned the moral high ground with its criminal acts in relation to Iraq, Libya and now Syria.

What gives you the idea that the US is in a better position than Greece, or Spain or Ireland? Essentially the US is BANKRUPT- both financially and morally.

maszki, provide details of the countries that are going away from the US Dollar. Specifically, other than talk of some minor bilateral agreements (for a minute fraction of their total trade), show me a single verifiable instance of a country not wanting, not trading with, US Dollars.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

PeterS, I can't name a country 'not trading' in US dollars and I doubt whether there is such a country as that is the current reality. Also I'm not sufficiently interested in researching the question as the answer is irrelevant to the point I was pursuing. As to countries 'not wanting' to trade exclusively (note the word) in US dollars then the BRIC group, Japan, Iran, even the EU and the UK would be on the list.

Your point though is as usual, diversionary. My point remains and you are unable to refute it, is that there are countries which are moving away from the US dollar as 'the' reserve currency.

You may refer to these agreements as 'talk of some minor bilateral agreements' relating to 'a minute fraction' of their total trade but if that was the case then why has the US and the EU reacted so savagely- even to the point of threatening sanctions against China and India if those countries continue to purchase oil from Iran using gold or their respective currencies for those purchases.

MY reality is that there are countries which are concerned about the future of the US dollar and want to insulate themselves from the fallout at which time the dollar will be so worthless that even Huanga's bananas will be of more value- if they aren't already.

Seriously maszki, aren't your arms getting tired from beating your anti-US drums ? It's getting old.
Defense oriented ?

United States Exports:

United States exports were worth 182.9 Billion USD in April of 2012. Historically, from 1992 until 2012, the United States Exports averaged 99096.9800 Million USD reaching an all time high of 184443.0000 Million USD in March of 2012 and a record low of 50044.0000 Million USD in May of 1992. United States is the world's third largest exporter.

Main exports are: machinery and equipment, industrial supplies, non-auto consumer goods, motor vehicles and parts, aircraft and parts, food, feed and beverages. Main exports partners are: Canada, European Union, Mexico, China and Japan. This page includes a chart with historical data for the United States Exports.

http://www.tradingeconomics.com/united-states/exports

Once again, you're way off base.

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"Life is a tough Teacher, it gives you the test first and the lesson later"
Anonymous

Ha! Nothing happened.
But the Geuro gave me a good idea. "Euro" is a Greek word and we could claim royalty 1 cent for every Euro in circulation (including electronic Euros).
We could do the same for arabic currencies with names deriving from "drachma", like "diram".

It's not over yet.

http://www.bbc.co.uk/news/business-18586532

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"Life is a tough Teacher, it gives you the test first and the lesson later"
Anonymous

maszki, you cannot point to a country considering moving away from the USD as the reserve currency for one simple reason, there isn't one. So, please, stop trying to make such spurious claims and then claim I am creating a diversion when I challenge you.

You have an anti-US bent, that is your right. However, anti-US rants do not make for stimulating discussion. Nor do they provide any enlightenment on the realities of the global economy as it stands today.

Although you do not like it, the global reserve currency is the USD. There are no signs of that changing any time soon. The EURO had aspirations, but it is swinging in the breeze at the moment, with nobody seemingly ready to give it a decent burial.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Peter, I completely agree with you. It would take a worldwide catastrophe of epic proportions, to unseat the U.S. dollar as the global reserve currency.

But what about suggested attempts at changing the use of the US dollar to price or purchase crude oil? The few nations that have even vocalized this desire, have then found themselves being threatened militarily by the U.S. government, with Iraq, Iran, and Venezuela, coming to mind.

Now I understand there may have been other reasons why those countries were either attacked or threatened with attack, but still, it seems curious the attention a nation can get from the U.S., when even thinking about dropping the U.S. dollar.

A quote from http://en.wikipedia.org/wiki/Economy_of ... ted_States

"The U.S. dollar has maintained its position as the world's primary reserve currency, although it is gradually being challenged in that role.[142] Almost two-thirds of currency reserves held around the world are held in US dollars, compared to around 25% for the next most popular currency, the Euro.[143] Rising US national debt and quantitative easing has caused some to predict that the US Dollar will lose its status as the world's reserve currency, however these predictions have not come to fruition.[144]"

I agree PeterS - both anti-US rants such as mine and pro-US apologies such as yours do not make for a stimulating discussion. As is indicated by the above quote there are some (other than myself) who accept that the US dollar is firstly, not the 'only game in town' and secondly, under pressure to maintain its pre-eminent position. Interesting to see the outcome. By the way, read reference 144 re the IMF calling for Special Drawing Rights (SDR's)- another indicator that there are some other than we anti-US ranters who are concerned about the long-term future of the US dollar as the principle reserve currency.

Equally if you are prepared to open your other eye ( not the Hawthorn one- the other one) and research US productivity and export data you might ascertain that defence systems and equiments and aircraft are major components of both US industrial production and export, hence my comment re the effect on the US economy if peace should actually break out.

You may recall my comment from another thread wherein I indicated that the firing of 200 cruise missiles in the first 2 hours of the Libyan "adventure" boosted the US economy to the tune of $400 million dollars. I recall you were most scathing in denying at the time that ANY cruise missiles were fired into Libya- just another of my 'spurious' anti-US rants.

As Libya, so too Syria if you can believe this mornings news reports

All of this back-and-forth, conspiracy theories, and scare tactics have no value, just a complete waste of time.

Meanwhile, as expected, Cyprus has asked for a bailout and more eurozone banks have been downgraded. Today, a report from the President of the European Council, Herman Van Rompuy, proposes a new way forward. Germany is already criticizing it.

Over the weekend saw the release of the annual report from the Bank of International Settlements. I recommend reading this for those wishing to get a good view of the current situation. This level of analysis is not often free.

BIS annual report

Another good read from last Friday concerning the structural problems of Eurozone banking.
The tragedy of the commons at the European Central Bank and the next rescue

A few highlights:


Markets are still nervous. The dollar is up against the Euro and gold.

David

NewPhilatelist, I disagree that the 'to and fro-ing' is a waste of time. If what PeterS or I write stimulates a single person to actually look at the situation and DO SOMETHING then all is not lost; after all, a revolution starts with a single person recognising that all is not well- Tunisia is a living example of that comment.

Your referenced documents are as ambivent as PeterS and my comments. Nobody knows for certain what is going to happen. Sure..there are trends. I read something into them, PeterS reads something different and a third party will read something entirely different again.

But your referenced documents, and PeterS and my reading of these and other opinions all indicate a common thread- that there is a malaise within the world's financial entity. What effects the US will impact upon the EU and vice-versa and there are many who want to escape those impacts regardless of who is right or who is wrong

You refer to 'conspiracies'. The situation with Iraq, Libya, Strauss-Kahn and others is now well documented as will be the current debacle about whether the Syrians shot down the turkish plane in or out of Syrian airspace -just as we were all taken in by the US spin re Iraq's WMD and the impending humanitarian disaster in Libya.

It does not matter.

The US will bludgeon its way forward just as it has done in the past.

The question here is 'What is real? What is illusion?

By many indicators Greece is better off than the US. Debt levels. Unemployment? Future debt commitments (health, social security, pensions?)

MY bottom line is that the US needs conflict to keep its economy afloat. If peace broke out and there was no need for defence systems, defence equipment and planes, the US economy would collapse.

Have a look at the US debt clock. The many wars that the US is fighting add a trillion dollars annually to their debt level. This level of debt is not sustainable- ultimately the debt has to be repaid.

Perhaps the US is relying on the old mayan prediction that the world will end on 21 Dec 2012 at which time debt will be abolished. What a magnificent way to run a country- what's next- astrologers. soothsayers, tarot?

The current level of US debt is now approaching (as a percentage of GDP) that reached during WWII. That tells us that it can be managed (as it was in the 1950s and 1960s), although sooner rather than later would be nice (on that we can agree). Political will and compromise is what will be needed, to eliminate the deficit and begin to work on retiring debt.

Given what is happening to the EURO, there is no rival to the USD on the horizon. I suspect that, by this time next year, there will be at least 3 fewer EUROZONE countries than there are today (my predictions are Greece, Spain and Portugal, but Italy may well join them). As soon as one goes, then the pressure for others to follow suit will be immense. Germany will then have a stark choice, change policy and agree to more support, or see it with a currency that is appreciating against other European partners.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

PeterS, please don't fall of your stool when I agree that your assessments both in terms of the dollar and the euro are possible, BUT ( and there always is a 'but') not if the current financial and geo-political situations remain unchanged- that is, unless Eric Casagrande's "worldwide catastrophe of epic proportions" occurs.

What would I consider a 'catastrophe of epic proportions'?

The collapse of one or more of the 'too big to fail' banks?
A major Eurozone country/ies defaulting on its/their debt burden?
The Arab Spring erupting in Saudi Arabia resulting in the formation of the much-talked about Caliphate?
Perhaps a military or political defeat for the US/NATO in Syria and/or Iran?
Or democracy might actually break out in the US or the EU and the UK

However the one thing I am confident about is that the security of the dollar and the Euro will not be achieved by a continuation of the present financial manipulations, corruption, and geo-political 'empire-building' strategies.

Perhaps you could expand on that one because, as someone who has voted in every UK election (local and national) since 1980, on the face of it that statement appears to be abject nonsense to me

Sorry Gavin-h I happen to think that the right to vote is only one facet of democracy - not the full monty.

So that comment was just my way of expressing the opinion that a few governments might actually start fulfilling their responsibilities to the democratic process by reacting to the needs and welfare of the voters who after all are not simply cannon-fodder to big business or lobby groups.

It was a waste of time because this thread has been down that road several times already with no significant change in perspectives or conclusions.

Do what? Buy gold? Buy the Chinese Yuan? Vote the bums out? Build an underground bunker? A lot of fear, anger and hate has to be sold to the people before they do these things and people do not make good decisions when they are fearful, angry or hateful.


If you read them carefully they are not ambivalent about the future.


I disagree with your sentiment that different interpretations of trends and events are equivilent in quality or value. Economies are collapsing and lots of smart people have lost trillions of dollars because they misinterpreted or incorrectly extrapolated trends.

One must arm themselves with as much understanding of the data and the system as possible to make a reasonably accurate interpretation of the data, act on it, and then hedge, hedge, hedge!


You can't compare absolute debt levels between countries without taking into account their "income". Consider two people, one owes $1 million and the other $10K. Who is in worse position to pay off his debt? Well, it entirely depends on his ability to pay off the debt. If the first person has annual income of $300K and the second is unemployed then clearly the second is more likely to default on his loans.

There is a metric for comparing two countries, it's called the Net International Investment Position (NIIP) in percent of GDP. Essentially, it is the "difference between a country's external financial assets and liabilities". See the IMF site for the latest data on the US and Eurostat for data on Greece.

Comparing 2010 numbers (US values for 2011 have not yet been released), the US is -17.0% and Greece is at -92.5%. Both are indepted however, US is much better off than Greece.

The value of over +50% for Japan - which holds the largest debt per GDP of any major industrial nation - helps to explain why its interest rates are so low.

David

NewPhilatalist..another comment, another opinion

Many hedgers have also lost out heavily so it isn't quite as simplistic as you comment. How do you factor in greed, fraud, insider trading and straight-out theft?

As to my opinion that Greece is in a better position than the US, that is based upon 2 factors. First, the Greek people know they are in a situation and according to the latest elections, now accept the need for austerity; and secondly, for better or for worse they have the other Eurozone countries prepared to at least attempt to bail them out. Whether these moves are successful or not only time will tell.

As to the US - and based solely upon what I have read and heard- there are many at all levels of the US who seem to be in denial in relation to their economic situation and the need for austerity and/or growth; and also the US has to bail itself out of the mess of its own making. There is no Germany or France, only a printing press to spew out more worthless paper. Whether that move is successful or not only time will tell.

May we all live in interesting times.

Agreed. Although I meant hedge in a general sense. I was not referring to hedging strategies which are designed to be leveraged and generate profit (JP Morgan's recent hedging loss comes to mind).


Every human system imagineable (financial or otherwise) will contain these elements to some degree. The trick is to design a system (or investment portfolio) which is robust and stable; one which will not fail under the weight of "greed, fraud, insider trading and straight-out theft".

Humans have been experimenting to find such a system for thousands of years. IMHO, the US has the best model thus far. And, I am confident, as are the Markets, that the US will eventually improve its model to enable it to continue experimenting.

David

I shudder at the thought of the worst model if the US is, as you say, the best

During the GFC, Australia did not go into recession and no financial institution required any bailout. There were, i believe, 2 pretty simple reasons for this.

1. Going in to the GFC the Australian Government had no net debt. That made the response of stimulating the economy much easier than would have been the case.

2. The financial system was well regulated and very risky investment strategies (CDOs and the like) constituted a very small fraction of business for our banks. They did not originate those sort of products and had a very limited exposure to them. The Federal Government extended it's sovereign AAA credit rating to the banks, to underpin their borrowings (and earned billions in the process). The guarantee was never called on.

The current situation, around 5 years later, is somewhat different, as far as Government debt goes. If the GFC were to hit today, the government would start from a worse base, although sovereign debt is still the lowest in the advanced economies (as a % of GDP), at something over $200B.

There have been casualties, though. The ratings agencies' (in my view) reprehensible behaviour in giving some of the toxic financial instruments (like CDOs) a AAA rating resulted in many local government instrumentalities losing lots of money. That is currently before the courts, so we shouldn't say too much I guess.

I don't think it is an accident that the Australian banks, as well regulated as they are, are also the most profitable in the developed world. Certainly, the sort of regulations that exist here would do the US the world of good, although US Banks would scream socialism and warn that the sky would fall in, if they had to comply.

Interestingly, though, we have a presence from many foreign banks here and they all seem able to survive (even thrive) in our 'severe' regulatory environment.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

True Peter, of this we can agree fully. The political will and compromise is the problem because now as after the War and in the 50's and 60's large amounts of this debt will have to be liquidated and the Bond holders have to take a hit, and it is because most of those large creditors are also the same conglomerates involved with the 'Too big to fail' and the huge amounts poured into campaigns and lobbying...then I fear for the political will.

(I think that events will not wait for the usual spin, dithering and stalling, downplaying the severity of this problem will not fix it, nor will kicking it down the road or leaving the same business practices in place)

With the huge downgrading of Banks a few days ago,Jamie Dimons 2 Billion Shortfall being widened to 9 Billion and Barclays being fined a record $451 Million for fraudulent manipulation of markets, it has been a rough week in the markets for all institutions involved.

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Looking for South Korea up to 1884-1951,North Korea 1st issue 1946-1957,China 1898-1912 and P.R.C 1963- 1980,Thailand 1883- 1918, Commonwealth QV Issues.

There was no default on US debt after WWII and all redemptions were paid out in full. Similarly, no current holders of US Treasuries will lose anything (in USD terms).

I note that the Federal Reserve has decided to extend the program of buying up short term and replacing it with long term (mostly 10 year) Treasuries. The market would have preferred another round of quantitative easing, but they won't be getting that, I don't think (unless the economy really tanks again).

The following charts I showed elsewhere, but it is interesting to note that massive increase in both exploration for, and production of, oil in the US. The US is now forecast to have the largest increase in proven reserves, outside a few OPEC countries, over the next few years. All that is required is an oil price of US$70 and above.



[/quote]

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

No default on US debt after WWII and all redemptions were paid out in full? Most economists beg to differ as no-one paid in bonds would ever have got full value for the debt....…The U.S sorted it's commitments through “financial repression.” Basically, this means the government of a country engineers a situation of:

–negative real interest rates and

–forced investor purchase of government bonds,

–over a very long period of time.

In the post-WWII US, which implemented such a regime, the country reduced its outstanding debt at the rate of 3%-4% of GDP yearly–suggesting “financial repression” would have to remain in place of at the very least ten years to get government borrowings under control.

There are many ways of liquidating debt...Just like before Peter, then won't TELL you they are liquidating the debt(as in Axis Europe with default and collapse) they just do it anyway(through bond issues that liquidate it over 25 years) lets face it..if your 30-50 year debt bonds don't keep pace with inflation then you are making a loss!

In the heavily regulated financial markets of the Bretton Woods system, several restrictions facilitated a sharp and rapid reduction in public debt/GDP ratios from the late 1940s to the 1970s. Low nominal interest rates help reduce debt servicing costs while a high incidence of negative real interest rates liquidates or erodes the real value of government debt. Thus, financial repression is most successful in liquidating debts when accompanied by a steady dose of inflation.

Inflation need not take market participants entirely by surprise and, ineffect, it need not be very high (by historic standards). For the advanced economies in our sample,real interest rates were negative roughly ½ that of during 1945-1980. For the United States and the United Kingdom our estimates of the annual liquidation of debt via negative real interest rates amounted on average from 3 to 4 percent of GDP a year. For Australia and Italy, which recorded higher inflation rates, the liquidation effect was larger (around 5 percent per annum).

Due to WWII and post-war demands on commodities, the Treasury capped long-term bond yields at 2½% and in so doing ensured that its debt/GDP ratio would be reduced. If savers received an average 2% on their Treasuries while the nominally based economy was advancing at 5% or more annualized growth rates, then debt to GDP could be lowered from its peak level of 116% to 112%, to 109%…etc.... every 12 months. In fact, the authors found that “for the United States and the United Kingdom, the annual liquidation of debt via negative real interest rates amounted on average to 3 or 4% percent of GDP a year…which quickly accumulated (without compounding) to a 30 to 40% of GDP debt reduction in the course of a decade.” Even after interest rate “caps” were removed in 1951 via the Fed-Treasury Accord, extremely low/negative real interest rate policies continued until the Volcker revolution in 1979. By that time, U.S. (and U.K.) debt levels had been normalized, primarily at the expense of savers who had been “repressed” (and depressed!) for over three decades.

At that historical turning point, government bonds were labeled “certificates of confiscation.” Not only had savers received Treasury bill rates that were negative for over 25% of the nearly four decades, but they were holding long-term AAA rated bonds trading at 30 to 40 cents on the dollar.

Promisary payment notes, that are usually replaced with more said notes when they mature, and they lose value over time...just like fiat.

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Looking for South Korea up to 1884-1951,North Korea 1st issue 1946-1957,China 1898-1912 and P.R.C 1963- 1980,Thailand 1883- 1918, Commonwealth QV Issues.

A holder of a US Treasury, or an Australian Government bond for that matter, can sell them at any time. In fact, over the last few years the prices for Treasuries have gone UP, lowering the yield. As the European crisis drags on, the yield on US Treasuries, both new AND EXISTING has fallen (due to demand exceeding supply). New Treasuries are, to all intents and purposes, issued at face value. Holders have been able to sell previously issued notes at above face value, lowering the yield for the buyer (who still gets the nominal interest of the note at issue, but pays above face for it).

Add to that the fact that, whether you want to believe it or not, we are in a low inflation (perhaps even deflationary) environment. In Australia, the CPI is in the middle to low end of the Reserve Bank's target range (2% to 3%), although GDP grew, in the 12 months to end March 2012 at 4.5%.

In Australia, at least, deleveraging by consumers is in full swing. We have never been saving as much, nor borrowing as little. That is at the retail level. Business investment, primarily in mining, is at record levels (although this shows signs of moderating).

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Here is an interesting little chart I came across today. It shows deposits of foreign currencies, overwhelmingly USD, in Chinese banks.



Note the massive increase over the last few months (since October last year). The speculation (and it is only that, speculation) is that many Chinese businesses were shorting the USD previously, in the expectation of a significant revaluation of the YUAN. That revaluation hasn't occurred, primarily due to the safe haven status of the USD and the problems in Europe.

The USD has become all the rage, once more, in China, with non-finance related business (which this data is for, excludes financial institutions) choosing to retain the dollars they earn rather than convert them to YUAN. The increase in deposits is over 70% in around 6 months!

It is analagous to an Australian exporter retaining the USD they earn in a USD denominated account, rather than converting to AUD. The difference here is that the keeping of USD instead of converting has largely been a zero sum gain. The Exchange Rate has averaged US$1.03 to A$1.00 over the last financial year and ended at $1.027 on Friday, very close to the average.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

The name of a film made in Cheltenham, England about our British spies.

LAMPLIGHTER July 2012
john tunstill

Syria and Bahrain, both killing, beating, torturing and imprisoning their citizens. Why does the west denigrate one and support the other? The difference, oil and arms sales. Hypocritical or what?

And when North Korea, currently at war with no-one, sends up a rocket the world’s media screams aggression, but when India do it, a week later, and remember that India is “at war” with Pakistan, no one complains. More double standards?

The biggest-ever data complex, to be completed in Utah in 2013, may take American citizens into a completely new reality where their emails, phone calls, online shopping lists and virtually entire lives will be stored and reviewed.
http://rt.com/news/utah-data-center-spy-789/

Wall Street Occupation http://occupywallst.org/
Over the last 30 years, the 1% have created a global economic system - neoliberalism - that attacks our human rights and destroys our environment, it is the reason why many people no longer have a job, it is the reason you cannot afford healthcare, education, food or your mortgage. Neoliberalism is your future stolen. Neoliberalism is everywhere, cutting labour standards, living wages, social contracts, and environmental protections, it creates global financial difficulties - crisis in Spain, in Greece, in the United States, Iceland, Italy, Ireland. It is a system built on greed and thrives on destabilizing shocks.
It allows the 1% to enrich themselves by impoverishing humanity. This has to stop! We must usher in an era of democratic and economic justice. We must change, we must evolve.
In Italy, we need to create www.basta.it, In order to demonstrate against; higher taxation, overpowering bureaucracy, government waste, un-necessary State control, and nine, or is it eleven? police forces, the forces of order.

A little civil dis-obedience might just work wonders

DIS-OBEDIRE - RESISTERE - VINCERERE

Did you read about the Bilbao Beat-Up? Do you care about human rights? Theirs? Yours?
How much less is your money worth, and why?
What are the governments hiding?

But, perhaps with bread and a circus, or a football match, or the Olympic games, and how corrupt are their organisers and comittee members............it doesn't matter too much....yet

IF……….

Remember the film about the schoolboy revolution in Cheltenham, England? (website with held to avoid a slapped wrist from the moderators.www.reelstreets.com)

Information Freedom, IF, and its distribution via the internet has brought about the fall of the Iron Curtain, opened up China to western ideas and enabled millions of ordinary citizens to investigate real or imagined abuses of power and to demand transparency in local and national governments and companies. Occupy Wall Street, despite police pressure, and in some cases, brutality, thrives because of the internet.

The Whistleblower film, and the subsequent use of the name, by the forces of order, has led brave investigative journalists throughout the world to look closely at various abuses of power, often with risk to life and limb. Julian Assange and Bradley Manning by exposing governmental corruptions are currently suffering house arrest, more than 750 days for Assange and isolation and imprisonment for Manning. Both so far without trial.

The internet empowers us all. Take full advantage of it before it is closed down by the currently proposed restrictive legislations, see ACTA. PIPA. SOPA and now........ http://rt.com/usa/news/senate-sopa-new-internet-847/. It really is time to stop them

An increasing clamour to restrict and control the internet on behalf of the US government, the Pentagon, the intelligence community and their private corporate arms, could result in a staged cyber attack being used as justification.http://www.prisonplanet.com/false-flag- ... ernet.html and see the threat posed by the overall control of “cloud” computing.

More to come.

WHISTLE BLOWER 2 ... john tunstill

Please copy and paste these links to all of your friends, and, even allowing for half or even three quarters of all the reports to be wrong, incorrect, conspiracy theories, fascist or communist plots, or scare-mongering, it still leaves a disturbing percentage that need to be seriously investigated.

If you don’t approve of “whistle-blowing”, think of the US NY cop in the 60’s, Serpico; and his continuing efforts; Serpico, the NY cop who exposed the corruption in the NYPD, suggested that the whistle-blowers should be called the lamplighters. Exposing corruption, graft, abuse of power and government cover-ups.

All of the following links are from articles written by, apparently, serious, and well informed, researchers / journalists; Just Google in the main name, and a short sub-text.

These are some of the more disturbing;;

http://www.cnbc.com/id/39670564/ and http://www.cnbc.com/id/39670564/ 'Mortgage Loan Pools' Latest Thing Looming Over Big Banks, Bank of America, CDS's (credit default swaps) mortgage loan pools and CDO's (collateralized debt obligations) and fraud allegations

BHOPAL, gas leak poisons thousands, June 7th 2010, The Independant

BIKINI Atoll, British servicemen and locals exposed to nuclear radiation. The Times 13th Oct 2005

BILBAO, 14.30 CET 29th June 2010. Euronews broadcast terrifying video of apparently middle-class, middle-aged, protesters being beaten-up by red shouldered uniformed officers of the “forces of order”, all red crash-helmeted and without visible signs of identification. By 19.00 CET all video was pulled and no further reference made. http://oneclick.indiatimes.com/topic/Bilbao#, has a few shots, but already some of the photos are not available. An Associated Press photo shows a young woman being punched in the neck by an officer of the law. There are only three photos to be found……….anywhere!?!
Ah, on http://topics.pe.com/photo/093669k2fygjs?q=Bilbao, there is a shot of an unarmed man being threatened or attacked by a baton wielding member of the forces of order. Which we now have copied, just in case it disappears! Strange that out of the thousands of photos taken, only two or three appear anywhere. There are however hundreds of photos showing the train strike, same city, same day. Curious, or what? Conspiracy, or is it just me being paranoid?

BOLOGNA bombing, a “terrorist” bomb, probably planted by Italian Government agents in order to instigate draconian new measures of control over their population. Now, with about nine, or is it eleven, “forces of order”, discounting the military, the Mafia, (Sicily), Camorra (Naples), & Ndranghetta seem to be as powerful as ever, Italian politicians are protected, financially and legally and public employees put in an absolute minimum of work and effort. http://www.threemonkeysonline.com /als/_bologna_train_station_bombing_1980.htmlhttp://www.centroimpastato.it/other ... italy.php3

BRABANT Massacre, undertaken by NATO “sponsored” terrorists. The “stay behind” army. http://www.informationdelight.info/ency ... of_Brabant

CANADIAN Shrinking Gold, the strange case of a damp basement or what? www.nationalpost.com/news/story.html?id=1743914, www.ottawacitizen.com/Business/Mint...g ... story.html, www.zerohedge.com/.../latest-gold-fraud ... ally-empty

CHELTENHAM GCHQ, mysterious deaths, subject of the film Whistleblowers, www.reelstreets.com, Katherine Gun’s story, http://www.guardian.co.uk/politics/2004 ... tion.iraq1

CHINESE banking take-over of US / Chinese trading, how the Chinese through their establishment of hundreds of branches of the Bank of China, are circumventing the US banking system, and by virtue of their hugely increased “turnover” will establish the Yuan as an international “reserve” currency within a few years. Jonathan Fenby The Guardian “It bank-rolls the US federal deficit and has become a vital link in the worldwide manufacturing and supply chain”, 26th June 2010. And do remember that your corner HSBC is not a British bank, it is the Hong Kong and Shanghai Banking Corporation.

More to follow

WHISTLE BLOWER / LAMP LIGHTER 3
john tunstill

CLOUD computing, is it the first step towards state/government/big business control of the internet, and, your life? How long will it be before "they" decide what you can view? From Wikipedia…. “Details are abstracted from the users, who no longer have need for expertise in, or control over, the technology infrastructure "in the cloud" that supports them”. Scary, or what?
CT and breast cancer scans, what they don’t tell you about the associated risks. Independent 19th December 2009.Columbia University: Body Scanners Increase Risk Of Skin Cancer, www.prisonplanet.com
DIANA, Princess of Wales, death, and mystery white Citroen AX, not a Fiat Uno. http://www.public-interest.co.uk/diana/dianafuwit.htm
DESERT Storm, injections of anti-nerve-gas “antidotes” cripple hundreds of servicemen. 16th May 2004, the Times.
Dr KELLY, and the impossibility of suicide, his coroner’s incomplete report and the “dark forces” at work in the shadows. Miles Goslett, Daily Mail, Cover Up, July 1st 2010.
http://www.dailymail.co.uk/news/article ... z0ujw5yJuO

ENGLAND BUYS $170B UST BONDS, The Chinese dump US Treasury Bonds and England accumulates them. Or more accurately, the US Fed hides its vast monetization efforts in the United Kingdom account ledger item. No way, to the reasonable man, can Britain purchase $170 billion in US Treasury bonds in five months, from legitimate sources of savings!! In May 2010, http://news.goldseek.com /GoldenJackass/1279742400.php

FANNY and Freddie, look at this video, http://www.thinkbigworksmall.com/mypage/archive/1/29027, and they, F&F, owe more than all the other banks put together, and “haven’t repaid a red cent” Fox News report, late June 2010.

FIAT Money, and the British and US mints producing endless amounts of paper money, and the comparisons with Germany in the 20’s, Argentina in the 80’s, and Zimbabwe in the 90’s. Google inflation.

A vicious circle is created in which more and more inflation is created with each wave of the ever increasing money printing cycle. Hyperinflation becomes visible when there is an unchecked increase in the money supply. Wikipedia.

FRECCE Tricolore, air display crash, blamed onto Gladio, the Italian State “terrorist” organisation, see the Ramstein air-show disaster August 28, 1988 see February 22, 2008, episode of Shockwave on The History Channel, which disputes the official version.

FOX Attacks Twins, in East London, .......on the first floor! Can this be real or is it a serious attempt to discredit foxes to bring back fox hunting? The Times, London, July 1st 2010.

G8/20 meeting in Italy, Diaz / Genoa, http://www.indymedia.org.uk/en/2008/12/414323.html and murder of journalist by Italian Police.

GLADIO, Europe’s “Stay Behind” secret armies, and the Brabant Massacres. Wikipedia.com and two of the pilots killed in the Ramstein crash were due to give testimony at an official enquiry into Gladio. Shockwave, History Channel.

GOLD and its huge rise, after 20 years of stagnation, and its “relative” value compared to Silver. And, the fact that there is no gold, www.businessinsider.com, and now it is sliding down again.

GOLD Bar Count, the mystery of the shrinking lists,
www.businessinsider.com/mystery-why-did ... nk-2009-10 , regator.com/p/.../mystery_why_did_glds_published_list_of_gold/

MORE LATER, stay tuned.

Jon, whatever have your conspiracy and alarmist theories got to do with this thread?

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

Jon, I agree with the thrust of your posts but you are pissing against a gale.
This thread is about the euro and dollar collapse, which many commentators are now saying is inevitable, but....

,,,your posts are about something entirely different,

Start a thread about whistleblowers or US hypocracy and we can continue this discussion- but not here

As both posts above have informed you, this thread is not about conspiacy. However I would recommend you follows maszki's suggestion and repost under a seperate heading in 'The water Cooler'. There you will certainly get some answers from those members interested in a potential global unrest.

Meanwhile I'm hoping PeterS will enlighten me on what effect, if any the Barclay scandal will have on the Dollar and the Euro?

Huanga.

No direct impact at all, that I can see. There looks like more to come there, though, with other UK banks implicated. Not that this is specific to the LIBOR, admittedly a widely used reference rate.

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Peter
Hawthorn - AFL Premiers 1961, 1971, 1976, 1978, 1983, 1986, 1988, 1989, 1991, 2008.

I like to stop in every now and then to listen to your discussion and different points of view. I'm no economist and don't understand a lot of the details, but you're at least on point, fairly interesting and mostly coherent.

I hope Jon lets us know where he ends up with his posts. I suspect they'll be lots of yelling and little listening. I'm bringing popcorn.

patg

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"I don't have a lot - But I like what I got"

PeterS, my understanding is that a number of banks - including US banks- are being investigated specifically in relation to manipulation of LIBOR; or have the media got it wrong again?