JP Morgan, Citigroup , Goldman Sachs, BofA, all gone

I agree . But only because they possibly have developed an extra win win end position .
Even though it sticks me out on a limb , I believe the Architects of this New World order will not be unhappy to effectively sacrifice banks when the 'right' moment arrives .
How do I defend that nutty statement ?
World debt is now unmanageable -- the only remaining tactic to delay system implosion is to increase imaginary debt until a tilting moment arrives , when nobody anywhere is prepared to buy junk American bonds , regardless of interest rates .And anywhere else , come to that .
I suspect this moment is close . It seems we were able to ring fence Greek insolvency, but the combined Italy - Spain sum required could exceed $4 trillion . This could be where US and EU banks cannot handle the matter and where US Banks fail , possibly along with BNP Paribas the largest world holding bank and French . This will occur this coming year and quite quickly I guess
In the interim , the US Government through any system you care to suggest , will continue to buy controlling interests in natural resources , natural resource companies and their means of distribution .
When cash effectively loses all intrinsic value ( US has been devaluing for years) , the only replacement area is bartering equivalents --- commodities .
At that stage other countries --- China , Russia and perhaps India and Brazil can almost create any new replacement world reserve currency they wish , because the US will have already achieved its key objectives -- to maximise control of world Oil reserves and its distribution routes . I deliberately did not mention Gas , as its importance is now not so great since the US became self sufficient via shale gas fields .
Even if the $ has devalued by as much as 50% by this time , it means that US debts will have been halved . But commodity prices will rise and be manipulated to 100% or even 500% increases .
And lastly the US has one last trump card to play . We will take Iraq as an example .
When this country was at its lowest point , the US invested around $1.5 trillion into hard infrastructure assets .The Dinar was worth buttons .
In a few years , this investment will be worth at least $100 trillion .
They probably have been doing the same in Afghanistan because this country is running with Oil , Gas and precious metals .
Am I mad or quite a smart dude?

 

Its never a good time to be a socialist, who are you trying to kid?

 

You can't get blood out of a turnip. If it frees the labor market, it's worth it for the capitalists to bring the citizenry past the breaking point. The most they grasp, the more they will find that people cease to care.

Once you're already so poor that you're removed from the market, I doubt you care very much about what happens to it. If private power uses the government to bleed the public dry, then they will quickly find that the public will stop giving a (*)(*)(*)(*) about their illusions. It would be a fatal maneuver for their long-term goals.

 

One of the biggest barriers to socialist reforms in society has been the current economic system. If the capitalists dismantle that system for us, it reduces the frictional costs of adopting socialism. In other words, if we're having to rebuild an economic system anyway, we might as well rebuild it the right way. That makes socialism a much easier sell.

 

even though you are correct that there is hell to pay if many large banks fail, but what you do not grasp is that hyper-inflation is much worse. You are talking the destruction of all the savings of the middle class. To me its just a question of the least of the two evils!

 

and this is exactly why I love gold so much for......its real.....and it cant be printed away. Also gold owes nobody. It may fall at first during the coming tsunami of currency crisis but eventually it will rise triumphant. Gold is the only "REAL" money in town!

 

That would not prevent derivatives trading, which greatly exceeds the amount of money in the money supply. Gold's primary problem is that it can't expand and contract as demand requires. The gold standard is an economic death sentence. It's never worked very well, despite what the gold bugs will tell you. It's caused more monetary issues than fiat currencies, by far.

Gold is a pathetic way to back a currency. Even something like energy credits would make more sense. At least that can be easily expanded and contracted to meet demand. There's very little that can be done to adjust gold production, making it a downright horrific basis for a currency.

 

There's no indication that hyperinflation is looming. If anything, we're facing a deflationary crisis.

Traditionally speaking, inflation favors the lower and middle classes at the expense of the rich--the more you save, the worse inflation hurts you.

 

incorrect.....remember that its the rich that are more sophisticated and understand how to hedge their savings ie gold and silver or perhaps energy stocks...the poor are not as sophisticated so if you read up on Argentina and other hyper-inflation countries you will see that its the poor and middle class that get hurt the most!

 

the only thing preventing hyper inflation right now is the fact that both china and japan are still willing to buy treasuries. Heck even the bank of canada announced last year that they had no choice but to buy more american treasuries in order to stop the CDN dollar from rising too much. So.....all these nations buying US debt is keeping the velocity of money low....otherwise trust me....all that new money chasing a scarce supply of goods and services and by now prices might of doubled already!

 

Yeah, at best the wealthy can shelter asserts in stable-value assets like gold. There's not enough gold int he world to shelter their assets from a real inflationary crisis.

Inflation means increased wages for workers; it's the only method by which real inflation can happen.

Hyperinflation usually coincides with a number of other bad economic decisions, so it's very hard to determine what impact inflation has on various classes from the example of hyperinflationary currencies. Those countries tend to be in bad shape because of a whole basket of bad economic ideas, not just monetary policy.

 

You're relying far too much on the insane monetarist view on inflation. Real changes in prices are caused by shifts in supply and demand in the market, not by changes in the money supply. In functional economies, labor demands more as prices go up, which is why modest inflation is good for workers.

Granted, the US isn't actually a functional economy. We're a basket case economy propped up by military power.

 

well then you really need to read up on past inflationary haulocasts...its always the same......too much debt....the country can no longer service that debt....interest rates skyrocket....the government starts printing large amounts of new currency to force down interest rates......inflation increases which alarms the average joe.....the average joe spends his money as quickly as possible in order to save purchasing power...the resulting loss of confidence and mushrooming velocity of money results in true hyper inflation.


I will let you figure out exactly where the US stands right now

 

90% of the time the root cause of hyperinflation comes from too much debt caused by overspending.....the government can no longer service that debt and thats when the death spiral begins!

 

You can't have deflation when you're printing money out of thin air. The US printing press is on fire. We're also printing money to help out in Europe. Bacardi is right, once US treasuries no longer sell, we are in trouble. That's when the debt bubble bursts. You also have to realize that it is now a fully globalized economy and each is interconnected. The good times of the global economy are over, we will eventually see the downfall. And it will be bad.

People like to talk about China. They helped out a ton in this last "global financial crisis". But they are in just as much trouble. In fact, they may be a catalyst to the downfall. First off, we take their economic numbers as fact, when they should be taken as manipulation to whatever their communist government wants their numbers to be. China is hitting their own real estate bubble and inflationary pressures do to their massive money injection. Once China hits a recession, and they will, they won't be importing other countries goods and they will stop buying US treasuries. Germany is a huge exporter to China and they are the driving force in Europe right now. When that stops, Europe goes down. The dominoes are all in place. You just have to tip the first major block.

I don't know when or how bad its going to be, but life as we know it now will be very much different most likely within the next 5 years or so. All we've been doing is prolonging, and in doing so, made it more painful when the blocks start to fall. I don't know how much longer it can be delayed, but I do know it can't be stopped. We are in way too deep.

 

Also wanted to point out that in high inflationary periods, worker pay is one of the last things to go up and may not reach pre inflation pay, so many will suffer for quite some time regardless.

 

I have always said the currency crisis will hit either in 2012 or 2013 !

 

There's a fine line between genius and madness. Which you are is up to history.

The US monetary system's only saving grace is it has the international reserve currency, which allows the US to ship it's consumer price inflation overseas, just like it's jobs.
If the international community suddenly rejects the US dollar as the reserve currency... the US is screwed. Then the world is screwed.
The current economic meltdown hasn't even begun.

 

this is what I have been saying....the US is exporting it's inflation but its amazing how the clueless gang can't see it LOL

 

That's one view and is the easy one to take .
But if you read my overview , there is a scenario which suggests quite the opposite .
Basically it boils down to the real power brokers --- little or nothing to do with Government --- who have seen that the conventional US is bankrupt and with absolutely no possible way out -- but who have put Plan B into action .
An almighty plan which will have them make unimaginable wealth at the expense of every sucker on the planet .
If an amateur like me can spell out a successful game plan for the power elite, then they will have got there years ago with their unlimited resources , both finance and computer modelling .

 

Hyperinflation isn't really a good situation to be discussing the relative merits of inflation vs. deflation, because by definition it has gone beyond the ability of the market to adapt. By the way, you can also have "hyper deflation", though admittedly it is an unlikely event with a fiat currency. It's certainly possible with commodity-backed currencies, however. It would be every bit as rough on a personal level, and perhaps worse because of its freezing effect on capital markets. There's no clear way out of that trap, unless wise governments have set aside enough savings, as laughable as that concept may seem today.

 

Which isn't going to happen to the US for another 20-30 years, even at present rates. Granted, there's no way the US would have the fiscal and political discipline to slash the programs required to continue to pay debt service fees.

Hyperinflation is more readily solved by social revolution than it is by any economic means. Tying yourself to a drowning horse like a gold standard is a truly demented vaccine against hyperinflation. Sure, it may protect you against hyperinflation, but it sentences your economy to at best mediocre growth interspersed between deflationary crises. At least the inflationary risk offers the potential for high economic growth. Gold doesn't even offer that much.

Ultimately, hyper inflationary monetary policy is the end result of a succession of poor economic and political decisions, it is the final bad decision a government makes, in many cases. It's not a natural consequence of fiat currencies... it's a natural consequence of bad political leadership. The solution to that is to remove the leadership, and the way to prevent it is by demanding good government continuously.

 

LOL 20 or 30 years.......the US now borrows something like 40% ( more or less) of its needs.......only a fool would think that the US can continue this fiasco for another 20 years......and the baby boomers have not all retired and stopped paying taxes yet......wait another couple of years


and I repeat myself.....2012 or 2013.......I cant see this going on any longer than that!

 

So what? They did a good job replacing themselves. We've easily got twenty years before the debt becomes unmanageable. This is like a homeowner finally realizing that his home mortgage is worth more than he makes in a year. Not really a meaningful analysis of the limits of his debt. Even if we assume that national debt was like personal debt, which is silly.

Your personal incredulity is irrelevant.

 

I agree with Bacardi . Time is short .
You do not seem to realise that when we casually talk of printing more money , it only becomes money once somebody has " bought it" , most usually in the form of a Government Bill or Bond .
Once China and Japan heavily reduce purchases ( that is already happening) , the US is reliant on private citizens buying .
With US banks going under , housing prices continuing to fall and inflation destroying private savings , the US will not be able to find anybody to purchase save itself --- The Fed selling to the Government in some twisted way , using intermediaries and essentially dishonest practises .
You can only print imaginary money as long as the real lenders ( imaginary money but real lenders) are convinced that full repayment of real money will occur ( not just roll over loans with new interest rates ) .
Once a key figure shouts , The Fed Reserve is Bankrupt , the game is up forever .
Any corner , fairly soon .