The US$ is Getting Thrashed and Nobody Seems to Notice!

[steve_a]

Hi Everybody,

The US$ is indeed getting thrashed and losing it's value.

Many could argue that the price of oil going up is caused by the conflict in the Middle East, that the price of food is going up because of natural disasters causing crops to be wiped out and the price of precious metals going through the roof because of speculators.

Although there could be some argument for the above, the major cause of the prices of these things 'going up' is not the real value of these things increasing, but the dollar weakening.

Governments hold huge stock piles of these commodities and have years of supplies exactly for when natural disasters and conflicts occur and stabalize the prices so as not to create a run on any of the items (except for gold which it is rumoured is being over sold).

So, how do I know that the US$ is losing it's value?

I live in Brazil where only four years ago the parity between the dollar and the Brazilian Real was 2.80 reais for 1 dollar. Yesterday the parity was 1,59, almost a half. Look at that again. Almost a half of the value of the US$ has been wiped away by a developing nations' currency. So what does this mean?

Well for myself and the 180 million Brazilians we can travel more freely as air travel is priced in US$ and spend more abroad where the dollar is used.

Imports become cheaper as they are priced in dollar also. Prices in general in Brazil will be cheaper in the short term as exporters will have to sell their produce to the internal market as the export market will become too expensive as it is priced in dollar. A good example of this is rump steak being sold at U$8,00 a quilo in the supermarket, less than 4bucks a pound! My cholesterol level should now peak and at my age!

What does this mean for the US? It means that the population should take heed and prepare itself for a sudden leap in prices in the stores, travel, interest rates etc. It is exactly now that action should be taken to protect the wealth that the population has.

This has been said by many before but it seems that the great majority of the population preferred to do nothing and will reap their just rewards for that. The others who are taking notice and are already planning and taking avoiding action of the crisis which is to follow, although may not be out of the woods, are certainly in for a fighting chance.

For me, I'm taking this opportunity of cheaper prices and exploiting it while I can, as I'm sure it won't last for ever. Life it seems is like a see-saw, when one part of the world goes up, the other goes down until the next phase comes round, when we should try and get in a place where it's going up again.

Best regards,

Steve

[oceanz]

http://gregpytel.blogspot.com/Thursday, 7 April 2011
China is buying up the world
(making the US a debtor of the whole world)

The US is hooked on China produced consumer products. The US buys massive volumes of goods from China and pays for them with the US treasury papers (the US debt). Can the US stop it? No. That would require moving production from China to the US which would take years (possibly decades) as it took decades to large scale of production of consumers goods to China. Never mind the fact that it could cause the US economy to collapse or at least massive hardships and internal implosion of home budgets as the US produced goods would be far more expensive that China's for the US consumers.

China is getting this massive volume of the US debt papers. These papers on the markets are AAA-rated and markets have to consider them as good as cash in international transactions. Otherwise the US dollar would have collapsed. So the 2/3 of world reserves that are held in the US dollars. No country can afford this to happen as this would have been a financial Armageddon. So China is buying access to the world natural resources, funding development of key infrastructure in many countries, investing in companies paying for it all with the US debt papers. Effectively China is using its cheap labour force to get as much as possible US debt papers which it uses to "buy" the world.

However this way China makes the US a massive debtor to the entire world (wherever China invests). It is impossible to rollover debt to infinity. So at some point, difficult to tell when, the US debt spread all over the world will become too big to roll it over once more. (Technically the growth of the US debt from trade imbalance with China is a pyramid.) In the same way as liquidity crisis happened in 2008 making banks debtors to the taxpayers, the collapse of the US debt and dollar will make the US insolvent to the rest of the world. All the countries and companies that China effectively paid with the US debt whilst "buying" up the world). Also all business entities that sit on the US debt, a huge part of the financial system, will also end up with a mountain of worthless US papers. No one will be able to come to the US rescue. However China will be left "owning" the world. (There is an element of exaggeration in using the words "buying" and "owning". This is to make this risk scenario clear.)

Furthermore China also buys debt of other countries using the US debt papers thereby making the US even a bigger debtor to the rest of the world.

Even if it does not end in such an extreme way (and there is no reason why it should not), China is slowly but heavily undermining the US world position using the trade imbalance between the two countries: by taking over key assets all over the world and buying influence with funding infrastructure project and by making the US a debtor to many countries and significant business interests.

In the same way as countries used to use and sacrifice health and life of soldiers to build their greatness (as we know it from history), China treats its cheap labour force in the same way: it is their real frontline that lets China acquire massive volumes of the US debt, at the same time keeps the US locked in such arrangement.

It does not look too good at all. The US is likely yo react at some point (at the end it is a military hyperpower). It is anybody's guess how it will look like.

[Jay]

Re "Nobody Seems to Notice".. apparently not much in the MSM on Bretton Woods II which starts today.
Internationalist billionaire George Soros & international conference running TODAY thru April 11 at Bretton Woods, N.H. Apparently to “rearrange the entire financial order” .
Called “Bretton Woods II” the meeting coincides with Trilateral Commission meeting at the same time in Washington, D.C. With an apparent goal of creating nothing less than a new global economy.

[Ba-ba-Ra]

http://gregpytel.blogspot.com/Thursday, 7 April 2011
China is buying up the world
(making the US a debtor of the whole world)

The US is hooked on China produced consumer products. The US buys massive volumes of goods from China and pays for them with the US treasury papers (the US debt). Can the US stop it? No. That would require moving production from China to the US which would take years (possibly decades) as it took decades to large scale of production of consumers goods to China. Never mind the fact that it could cause the US economy to collapse or at least massive hardships and internal implosion of home budgets as the US produced goods would be far more expensive that China's for the US consumers.
. . .


Perhaps I'm misunderstanding your post, but it seems you are making China the culprit. From my perspective: Did China force the U.S. to borrow the trillions of dollars that we did from them? And as I understand it, part of agreement of these huge loans to the U.S. was that we would import a certain dollar amount of these products. Once again, IMO, our politicians sold us out.

As to consumers in the U.S. purchasing cheap products from China: part of that equation is near-sightedness, and part is education. If we understood that these cheaper products that have flooded are markets (due to trade agreements) only last a short time and that purchasing them is all part of the "non-stop purchasing, which produces never-ending waste" philosophy of of Consumerism, perhaps we could force some changes on the U.S. Government policies. But alas, while many are beginning to wake up or at least beginning to stir in their sleep, many are still sound asleep and kept that way through prescription drugs, TV, etc.

As long as money and consumerism rule, and they clearly do, one could say China is merely being savvy. Enlightened, fair and honest, No, but how many countries are? IMO we in the western world have played dirty on many levels and now we are upset because the power is shifting - and we refuse to see what we have or haven't done to create this shift. Not that I think that we should hold the power either, but again, as long as money rules, those will be the rules.

And speaking of China's cheap labor force: What about the disparity of wages in the U.S. between the average workers and the CEO's?

Of course, I always hold out hope that the worker's of the world will wake up and in my lifetime - I must say at this point it would seem to take a miracle - and yet, I have been seeing some miracles. I hold onto the thought that the rule of the corporations/governments has seen it's day, and you know what that say: In order to see it, you must first believe it!!!

[Lost Soul]

If most Americans knew what was going on, that the Federal Reserve is using inflation to destroy our dollar and as a result, reduce the value of our earnings, our savings, our retirement, they would rise up in arms. However, the people are comatose and fixated on the smoke and mirrors. They've allowed the politicians who are owned by Wall Street to plunge the nation on its reckless course. Since the mid-70s, production jobs have been outsourced overseas and resulted in the middle class being diminished. It started first with the garment industry, then heavier industry like cars, machinery, domestic products followed. American corporations became multi-national (to avoid taxes) and in doing so, increased profit margins and exploit third world nation resources and people.

The dollar is intentionally on the decline. It means the national debt will be paid off with worthless paper. The Chinese are hopping mad that we're devaluing our dollar (which decreases the value of the trillions they hold in US T-bills) and have been urging its citizens to put their money in precious metals. The other big losers will be the Japanese and the Arabs. Devaluation of the dollar also means that social security checks will arrive but will buy nothing (think Weimar Germany). So, that $500k in your piggybank will be just enough to buy lunch for a family of four.

The bottom end is that the dollar will no longer be the world's reserve currency and that we will have a new world currency.

[Arrowwind]

I am of the opinion that a world currency may not be a bad thing. Obviously we have to overhaul our econcomic structures for they have been failing us. The laws are to complex and obscure, allowing for all kinds of thievery and manipulations of markets. Speculation must be removed from the production of food, which is contributing hugely to inflation of food prices.

It will always be a paper currency as there is not enough gold silver nor platnium in the world to cover the goods and trade done on a daily basis.. therefore it will requrie an agreed upon belief system of currency, as we have already have been doing. Having a single world currency and one system that directs it would eliminate a lot of problems, leveling the playing field for every nation. There also needs to be a leveling of the worth of a days labor, no matter what that labor is. CEO's can no longer make millions and billions, and people moulding pottery cannot live in destitution with no hope of adequate sanitation or education for their children.

A paradigm shift of values is required to create a sustainable environment. Think of Star Trek. Such a civilized culture could not possibly exist based upon the current paradigm. Change must come. Sometimes change is tough.

The only issue I have with a world currency is that a world government will come with it. I have great concerns of loosing jurisdiction of my own back yard and having the likes of the United Naitons ruling what I do on a daily basis.

[K626]

Not as clear cut as that. Here is the short version of Amercan companies trading or manufacturing in China...

American companies moved a lot of their manufacturing and logistics out of the Usa in the 80's and 90's to benefit from cheap labour abroad.

These companies are profiting too from cheap Chinese labour and work practices.

The only loser is the American taxpayer and worker. NOT American companies NOR THE ELITE.

AT&T
Abercrombe & Fitch
Abbott Laboratories
Acer Electronics
Ademco Security
Adidas
ADI Security
AGI- American Gem Institute
AIG Financial
Agrilink Foods, Inc. (ProFac)
Allergan Laboratories
American Eagle Outfitters
American Standard
American Tourister
Ames Tools
Amphenol Corporation
Amway Corporation
Analog Devices, Inc.
Apple Computer
Armani
Armour Meats
Ashland Chemical
Ashley Furniture
Associated Grocers
Audi Motors
AudioVox
AutoZone, Inc.
Avon

Banana Republic
Bausch & Lomb, Inc.
Baxter International
Bed, Bath & Beyond
Belkin Electronics
Best Buy
Best Foods
Big 5 Sporting Goods
Black & Decker
Body Shop
Borden Foods
Briggs & Stratton

Calrad Electric
Campbell 's Soup
Canon Electronics
Carole Cable
Casio Instrument
Caterpillar, Inc.
CBC America
CCTV Outlet
Checker Auto
CitiCorp
Cisco Systems
Chiquita Brands International
Claire's Boutique
Cobra Electronics
Coby Electronics
Coca Cola Foods
Colgate-Palmolive
Colorado Spectrum
ConAgra Foods
Cooper Tire
Corning, Inc.
Coleman Sporting Goods
Compaq
Crabtree & Evelyn
Cracker Barrel Stores
Craftsman Tools (see Sears)
Cummins, Inc.

Dannon Foods
Dell Computer
Del Monte Foods
Dewalt Tools
DHL
Dial Corporation
Diebold, Inc.
Dillard's, Inc.
Dodge-Phelps
Dole Foods
Dollar Tree Stores, Inc.
Dow-Corning

Eastman Kodak
EchoStar
Eclipse CCTV
Edge Electronics Group
Electric Vehicles USA, Inc.
Eli Lilly Company
Emerson Electric
Enfamil
Estee Lauder
Eveready

Family Dollar Stores
FedEx
Fisher Scientific
Ford Motors
Fossil
Frito Lay
Furniture Brands International

GAP Stores
Gateway Computer
GE, General Electric
General Foods International
General Mills
General Motors
Gentek
Gerber Foods
Gillette Company
Goodrich Company
Goodyear Tire
Google
Gucci
Guess?

Haagen-Dazs
Harley Davidson
Hasbro Company
Heinz Foods
Hershey Foods
Hitachi
Hoffman-LaRoche
Holt's Automotive Products
Hormel Foods
Home Depot
Honda Motor
Hoover Vacuum
HP Computer
Honda
Honeywell
Hubbell Inc.
Huggies
Hunts-Wesson Foods

ICON Office Solutions
IBM
Ikea
Intel Corporation

J.C. Penny's
J.M. Smucker Company
John Deere
Johnson Control
Johnson & Johnson
Johnstone Supply
JVC Electronics


http://www.jiesworld.com/international_corporations_in_china.htm

[gardunk]

if the pms crash a little would advise any of you converting to some silver coins!

[Rocky_Shorz]

so Steve,

we are paying 3.5 Trillion a year interest on 54 Trillion debt...

you don't see that as a problem do you? ;)

[Nyce555]

I watched a documentary recently about the value of the dollar crashing and that it is going to drastically alter lives for Americans. It recommended learning how to grow your own crops again and learning how to live of the land because it will be too expensive to buy food in the stores and gas will be too expensive to transport goods. It also suggested investing in silver an d gold. I don't know about the investment part, but I am starting a veggie garden this spring to see if I still have my green thumb.

[TigaHawk]

http://www.youtube.com/watch?v=CC8jAd84VyQ&feature=related

[Lost Soul]

Arrowind - I respectfully disagree about a world currency not being bad. The world's controllers will gain even more control when there's a world currency in place. As our money fails (US dollars, euro-dollar, Yen) we will be screaming for a viable paper currency. The controllers will gladly offer us their new world currency.

[sjkted]

I am of the opinion that a world currency may not be a bad thing. Obviously we have to overhaul our econcomic structures for they have been failing us. The laws are to complex and obscure, allowing for all kinds of thievery and manipulations of markets. Speculation must be removed from the production of food, which is contributing hugely to inflation of food prices.

It will always be a paper currency as there is not enough gold silver nor platnium in the world to cover the goods and trade done on a daily basis.. therefore it will requrie an agreed upon belief system of currency, as we have already have been doing. Having a single world currency and one system that directs it would eliminate a lot of problems, leveling the playing field for every nation. There also needs to be a leveling of the worth of a days labor, no matter what that labor is. CEO's can no longer make millions and billions, and people moulding pottery cannot live in destitution with no hope of adequate sanitation or education for their children.

A paradigm shift of values is required to create a sustainable environment. Think of Star Trek. Such a civilized culture could not possibly exist based upon the current paradigm. Change must come. Sometimes change is tough.

The only issue I have with a world currency is that a world government will come with it. I have great concerns of loosing jurisdiction of my own back yard and having the likes of the United Naitons ruling what I do on a daily basis.

Why the hell do we need just one currency? Why is it that there would be one group who could force their currency on all people of the world? When will people learn that centralization of power is what caused this whole mess? Subordinating more and more rights to them will NOT make it stop bleeding.

--sjkted

[steve_a]

Hi Rocky_Shortz,

Just as the population of the US didn't really care when inflation was 50% per month in Brazil during the 1990's I'm not too preocupied AT THIS MOMENT IN TIME that the US currency is going under and inflation is coming, if it already hasn't arrived. But my personal opinion isn't important in this case.

The object of the post was to try and get people to understand that there are serious problems on the way and that they will happen suddenly. Knowng this allows the people who want to understand to take necessary measures to try and combat on a personal level against the problems that may occur.

Those who don't wish to understand nor take precautions are normally the ones who complain the loudest when it's too late.

Best regards,

Steve






so Steve,

we are paying 3.5 Trillion a year interest on 54 Trillion debt...

you don't see that as a problem do you? ;)

[crosby]

steve_a, we're noticing. but there isn't much we can do to stop it. i say, let it fall. it will wake up the rest of the masses and that will definitely lead into a new direction. one cannot start a new economy on their own, they would be charged with trying to overthrow the treasury department and spend the rest of their lives in levonworth prison. what we can do is start boycotting as much as possible. start taking control of how we spend our wee little dollars. i think that is the most important way to respond. if the man who runs the ice cream shop down the street pisses me off, he's not getting a dime from me. it the gas station downtown starts to price gauge, i'll drive 20 miles away to get price at a cheaper cost, to give my business to someone who deserves it. or i'll walk where ever i need to go. if we stop catering to the madness, they have nothing left.
warmest regards, corson

[Chicodoodoo]

I am of the opinion that a world currency may not be a bad thing.

It's the same con-game that we have now, only on a global scale. A world currency will end up exactly the same way as the dollar, devalued through excessive monetary expansion until it is nothing but worthless paper (or even worse, worthless computer digits which you cannot even burn to heat your home).

A world currency is just an extension of the current problem, putting off the day of reckoning until a later date. The United States did the same thing in 1971, when it switched from the gold standard to the petrodollar. The U.S. was bankrupt (all the gold was gone) and needed a new pyramid scheme (by requiring all nations to buy oil using only dollars). It was quite the criminal racket -- the international demand for dollars exploded, and the dollar had perceived value once again. That lasted for only 40 years, and now we face the same music again. Is the solution to require all nations to buy all goods using only the new world currency? That's the same old con-game we ran with the dollar, and it will end in exactly the same way.

[Falconwoman]

Hi Everybody,

The US$ is indeed getting thrashed and losing it's value.

Many could argue that the price of oil going up is caused by the conflict in the Middle East, that the price of food is going up because of natural disasters causing crops to be wiped out and the price of precious metals going through the roof because of speculators.

Although there could be some argument for the above, the major cause of the prices of these things 'going up' is not the real value of these things increasing, but the dollar weakening.

Governments hold huge stock piles of these commodities and have years of supplies exactly for when natural disasters and conflicts occur and stabalize the prices so as not to create a run on any of the items (except for gold which it is rumoured is being over sold).

So, how do I know that the US$ is losing it's value?

I live in Brazil where only four years ago the parity between the dollar and the Brazilian Real was 2.80 reais for 1 dollar. Yesterday the parity was 1,59, almost a half. Look at that again. Almost a half of the value of the US$ has been wiped away by a developing nations' currency. So what does this mean?

Well for myself and the 180 million Brazilians we can travel more freely as air travel is priced in US$ and spend more abroad where the dollar is used.

Imports become cheaper as they are priced in dollar also. Prices in general in Brazil will be cheaper in the short term as exporters will have to sell their produce to the internal market as the export market will become too expensive as it is priced in dollar. A good example of this is rump steak being sold at U$8,00 a quilo in the supermarket, less than 4bucks a pound! My cholesterol level should now peak and at my age!

What does this mean for the US? It means that the population should take heed and prepare itself for a sudden leap in prices in the stores, travel, interest rates etc. It is exactly now that action should be taken to protect the wealth that the population has.

This has been said by many before but it seems that the great majority of the population preferred to do nothing and will reap their just rewards for that. The others who are taking notice and are already planning and taking avoiding action of the crisis which is to follow, although may not be out of the woods, are certainly in for a fighting chance.

For me, I'm taking this opportunity of cheaper prices and exploiting it while I can, as I'm sure it won't last for ever. Life it seems is like a see-saw, when one part of the world goes up, the other goes down until the next phase comes round, when we should try and get in a place where it's going up again.

Best regards,

Steve


Yes, I agree with your post. For those wanting more info on this type of thing see The Money Masters on You Tube.

[oceanz]

I have to wonder if the introduction of the euro dollar whilst retaining one's own countries currency was a trial run by the elite?

Countries like Ireland should just default on the euro because the austerity measures introduced are not helping.

So when they do introduce the new global currency I don't think any country will be able to keep its own currency as it would be classed as "(financial) terrorism"...that way the elite will have ultimate control.

[Darla Ken Pearce]

The financial system has fallen and can't get up. It was established as a debtor system that consistently worked against our interests. A new system waits in the wings to replace it. We must let it fall to the ground and make room for this new one to come forth. A fresh start!

[Rocky_Shorz]

well look at the list of people meeting today to fix the system in Bretton Woods...


As Rothbard detailed, there never was any currency stability in the early years of Bretton Woods and there certainly isn't any now. But it is under the guise of the success of earlier elite global planning that Soros will bring his group of merry global plotters to Bretton Woods. Among those scheduled to be there, in addition to Soros are:

Paul Volcker, Former Chairman, Federal Reserve

Adair Turner, Chairman, Financial Services Authority

Richard Bronk, London School of Economics

Gordon Brown, Former Prime Minister, United Kingdom

Paul Davidson, Co-Founder, Journal of Post Keynesian Economics

Martin Wolf, Chief Economics Commentator, Financial Times

Niall Ferguson, Professor of History, Harvard University

Andy Haldane, Executive Director, Financial Stability, Bank of England

Simon Johnson, Professor of Entrepreneurship, Global Economics and Management, Sloan School of Management, Massachusetts Institute of Technology

Henry Kaufman, President, Henry Kaufman & Co., Inc.

Zhu Min, Special Advisor, International Monetary Fund

Carmen Reinhart, Dennis Weatherstone Senior Fellow, Peterson Institute for International Economics

Kenneth Rogoff, Professor of Economics, Harvard University

Jeff Sachs, Director of the Earth Institute

Joseph Stiglitz, University Professor, Columbia University

[modwiz]

Iceland defaulted went through some pain and is now growing again free (or almost free?) of the parasites. Getting bailed out is getting fed to the (Loan) sharks. The political lackeys always try to steer a country to the whims of the banksters because they either get paid for it or are related to interests and get paid for it.

That is what happened in 1913 when our politicians let the monsters back into our government after Jackson got rid of them and Lincoln kept them out, and he paid for it with his life.

[kevlor]

lots of pain to come. thankfully a lot disagree with arrowwind and his belief in a - one world currency -

the G20 is currently trying to "rename" the US dollar, under the guise of the IMF. to continue the ponzi fiat money scheme, that we currently have, world wide.

china, india, russia, and a whole lot of other countries are currently stocking up on gold, and advising their citizens to do likewhise. even the worlds banks, which got rid of most of their gold a while back, are now nett buyers of gold.

the big boys in control, know whats coming. the american people are in for a lot more pain ... kev

[Lost Soul]

Most of my fellow citizens roll their eyes when I suggest they buy the shiny stuff (AS & AU). I know who to stay away from when our ducats go the way of Zimbabwe's dollar or the Weimar Republic's Reichsmark. Oh, how I weep for them though. The more of my fellow citizens who are prepared, the less the panic when the bottom drops.