Global Economy Bursting?

[PropertyEconomics]

I find this information to be very enlightening ... I will put it on a spreadsheet and do a bit more analysis ... but its very interesting none the less .....

http://www.davemanuel.com/history-of-deficits-and-surpluses-in-the-united-states.php

 

[prasercat]

The end game:

1) Obama will do the only thing he can do to avoid the decimation of the US economy - raise the debt ceiling by executive order. This will make him the hero and ensure his re-election. The right is divided and they need to have Daddy do the responsible thing, so they can still be loyal to their friends (constituency). The tea guys are like a hard knot that doesn't give or negotiate, so when the wind blows the tree, it's too stiff. The tree bends and the knot cracks away from the tree. Hence, the tea guys will break away from their current political tree and form their own party. The tree will slowly heal.

2) The president doesn't raise the debt ceiling. The right will play the game up to the end to maximize the pressure on the President and left to see how far they will go and then take the compromise agreement after Tuesday. If the president compromises too far, the re-election prospects for the president will be greatly reduced as he will appear weak.

3) The president doesn't raise the debt ceiling by executive order. The big banks and Wall Street Financial Firms will send swat teams and droves of lobbyists to force a negotiation at least by the day after Tuesday, maybe Thursday (Because, Tuesday, doesn't really matter that much) in their eyes.

4) On Monday, President Hu Jintao will call the president of the US and give him an ultimatum and remind him the US already lost its AAA rating in 2007 and is now headed for junk status in Asia unless he raises the debt limit by Tuesday. The president raises the debt ceiling by executive order. This is a great concern, since it will hurt China's exports and create losses for its 1.2 Trillion in Treasuries it holds. In any case, it will speed up its divestiture of US assets, started in earnest in 2007 (as a percentage of holdings). China will accelerate its purchase of Gold, as it has been busy creating its own gold reserve for some years now since it wants to speed the transition of the global currency out of the US dollar and into its own currency. This will be a perfect storm for their new currency, the world will start buying it up and dumping treasuries. Interest rates will rise into above 20% and the US will fall into a deep depression. People will be leaving the US in droves to Canada for a better life. Oh, yeah, much of 4 is already happening.

5) Both sides come to an agreement on a compromise bill that not only increases reductions in spending over the coming years, but increases in tax revenues. Everyone forgets what happened, the AAA rating returns and the sun and birds come out.

 

[Couch Potato]

Gold up less than 1%

So far this year gold has only gone from 1220 to 1280, hardly great returns.

Of course it looks different when viewed through US Dollars rather than Swiss Francs.

The twenty year chart provides a good perspective on the value of the US Dollar, which is inversely proportional in other words turn the chart upside down to represent the value of the dollar.

(The above charts are from The above charts are provided by goldprice.org where you can view gold and silver prices in various currencies over various time periods.)

 

[Randolph Kinney]

Coming Soon: ‘Invasion of the Walking Debt’

The real risk is that investors will start looking for another country as the world’s financial standard-bearer. People could remain out of work, businesses could be starved of capital and politics could impede any chance of economic recovery.

 

[Couch Potato]

Reality, not risk.

The real risk is that investors will start looking for another country as the world’s financial standard-bearer. People could remain out of work, businesses could be starved of capital and politics could impede any chance of economic recovery.

I don't view that as a risk, rather I view it as our current reality. The change is not something triggered by missing a mythical deadline, but the result of reckless spending over a long period of time with no sign of change.

On the bright side, at least Osama bin Laden did not live long enough to see the economic collapse in full bloom. :new_all_coholic:

 

[prasercat]

So far this year gold has only gone from 1220 to 1280, hardly great returns.

Of course it looks different when viewed through US Dollars rather than Swiss Francs.

Along this line of thought - I've heard a bit of cockyness about China not having any choice in purchasing US assets; and that we may lose our AAA credit rating. It's internal propaganda - every country is guilty of this flaw.

It is no longer about maintaining a rating we lost in the financial crisis (that we created), but rather, how fast will be the transition to the new world currency standard, The Yuen.

- "Three or four years ago there was no one who would have expected Chinese physical demand for gold to surpass India," [Chuck Jeannes, chief executive officer of Goldcorp Inc.]

http://dailyreckoning.com/china-to-overtake-india-as-worlds-biggest-gold-consuming-nation/​

The investment community and governments look to gold, not for appreciation, but preservation of capital. Even should all the paper money become worthless, gold will always be universal and always have monetary value. As you know, if a country has enough gold, it can use it to back its currency, increase the currency's legitimacy and lower the risk associated with the currency. ​

China doesn't need to buy US debt, it can just buy gold, prescious metals and various mining interests and energy reserves, invest in its own proprietary technologies, invest in its own economy and infrastructure, etc.​

The more it develops its domestic economy, the less it needs and will invest in the US and Europe for exports.​

For a taste of the new currency standard: - This Chinese Panda Gold Coin is about 4 to 5 appraisals:

​

Personally, however, the Chinese currency, the Yuen, (Not to be confused with Yen, which is Japanese) with the picture of Chairman Mao just doesn't feel as good as Benjamim Franklin - the symbol of our past innovative greatness and prosperity. So, personally, I'd rather have Gold Pandas than Mao. ​

​

 

[Randolph Kinney]

Even the Tooth Fairy Knows It’s a Depression

Visa does an annual survey of what the Tooth Fairy left American children in exchange for their teeth. In 2010 the amount was $3 on average. In 2011, it is down to $2.60. A 13.3% year-over-year decrease in tooth transactions. That is a much better indication of what is going on in the real economy.

We live in an artificial, criminal money system where the money supply is manipulated by a central banking cartel who inflates the money supply to prop up the coercive governmental system that enslaves us and transfers wealth to the power elite.

Today, however, money is literally not worth saving. With interest rates of 0% and inflation rates over 10%, if junior “saves” his $2.60, it will be worth nothing in less than 10 years time. That’ll teach him a lesson he hopefully won’t forget.

 

[Couch Potato]

.........
Today, however, money is literally not worth saving. With interest rates of 0% and inflation rates over 10%, if junior “saves” his $2.60, it will be worth nothing in less than 10 years time. That’ll teach him a lesson he hopefully won’t forget.

More like "inflation" rates over 20% and rising. The catch is inflation in this global economy is merely taking the form of devaluation of the dollar. Local products and services all show the same relative effect so inflation is hidden, but internationally traded goods bare the full brunt. Our only salvation at this point in time is most of Europe is having the same problems. We desperately need sound leadership from our government, but all we have and are likely to get is adolescent fighting between two groups promoting opposing wrong solutions.

Personally, I am well prepared for the situation, but I feel for those less able to comprehend and prepare.

 

[Randolph Kinney]

This is a 1934 Chicago Tribune political cartoon that many say rings true in today's political and economic climate.

The man in the mortarboard flogging the Democratic donkey is Rex Tugwell, the leader of FDR’s “Brain Trust”, a character out of academica. The Brain Trust was supposed to come up with new ideas to help America. The two mortarboard-wearing kids in the wagon represent recent Ivy League college graduates hired to staff the New Deal.

The most prominently featured man shoveling money off the wagon is Secretary of Agriculture Henry Wallace, who was known for his socialist leanings. Most us are aware that FDR confiscated gold in 1934, but most people are not aware that the gold confiscation was a clause in the Agricultural Adjustment Act of 1934. It is also important to remember that 90% of the American population lived on farms during the Depression.

The man behind Wallace is Harold L. Ickes, Secretary of the Interior and director of the Public Works Administration. As head of the PWA, Ickes had a lot of say on what and where public works projects were built. The biggest of course was the Tennessee Valley Authority. Ickes was well-known for backing many other socialist endeavors. Ickes was also the father of Harold M. Ickes, a key player in the Clinton administration.

The significance of this cartoon is that it depicts the visible signs of manipulation by the financial elite that runs America, which was in full control of the country back during the Depression, for decades before that and for the decades leading up to the present.

 

[Terrel L. Shields]

There is an old movie about the TVA that I saw 40+ years ago and it haunted me. Called "Wild River" it was about the resistance of the people to being forced off their land for the good of the nation...It bothered me then, bothers me now.