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Pulling the plug on terminally ill?
#1
http://dcclothesline.com/2013/11/22/chin...s-dollars/
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#2
The article flies in the face of the conventional wisdom that China needs the US to buy its goods. If this is true, as well as your article, th plug will be replaced by a rheostat What will they do with all that excess production? The Chinese have been agitating for a new global reserve currency for several years now. If they succeed in getting the yuan to partially replace the US$ as a reserve currency, that spells even more trouble for the dollar; it will plunge. Maybe they are trying to establish a "black gold" standard.

At any rate, the US should wake up because it vulnerable in so many ways. Fat chance, political turf wars continue unabated and our current administration would like nothing more than to the the US become an unexceptional european like state. Obama has said so often in many ways.
Jefferson: I place economy among the first and important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our choice between economy and liberty, or profusion and servitude. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy.
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#3
Quote:The article flies in the face of the conventional wisdom that China needs the US to buy its goods

But conventional wisdom does not take into account the possibility of the US economy collapse. If the Chinese think this is coming anyway, it makes sense to handle the collapse on theirs terms, for instance by limiting the exposure now.
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#4
The Chinese must be experts at reading tea leaves if you are correct. The US bubble may break suddenly or die a slow european death. Only the Chinese know when, as I infer your meaning. I I propose that they are whittling away, gradually turning up the heat until they can do without the US market.
Jefferson: I place economy among the first and important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our choice between economy and liberty, or profusion and servitude. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy.
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#5
It might break within a month too as follows: all the people who received health insurance cancellations plus many who expect to receive them (this may be millions) may be spending a bit less this holiday season. And given the importance of this indicator (mostly psychological, I think, but still) this may crash the market and unleash the spiral.

Absolutely not saying this will happen... but lets see what happens on Black Friday.
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#6
and I don't know if there is a connection, but this is a new, aggressive move.
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#7
IMO the Treasury will soon mint Trillion dollar coins, but they should do so that they fit in snack and beverage distributor machines.

US Export #1 has been its own debt. If the US stop exporting it, there will be troubles indeed. Who want to buy bonds when all these bonds must be repaid with printed money?
It was also massively stupid for China to put several trillions in treasuries to begin with. That they realize that only today is not a sign that they are tea leaf reading experts.

If the dollar collapse, so do their savings. They had better buying jade stones to sculpt fat budas.

The € is not in a better position as our combined debts are almost as high as that of the US. By any means you don't need to be as much in debt to be in serious troubles.

Placing more of my personal savings into gold as I type...
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#8
China would need to be careful, they could be severely harmed by a dollar decline. Having said that, it's hard not to think they'll replace us fairly soon as the reserve currency ,etc.
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#9
(11-23-2013, 08:06 PM)Fredledingue Wrote: IMO the Treasury will soon mint Trillion dollar coins ...

It's certainly still on the table. If not for the Obamacare debacle, it would probably be coming up again in January. But Ryan has decided to take a pass ... so as not to 'distract' from the ongoing train wreck.

If there was an ongoing parade of customers for the product that our Treasury is selling it probably wouldn't be looking like this over the last year. Again, when the F'ed becomes the sole bidder, the fig leaf will be long gone.

Back to the Trillion Dollar Coin, the current 'plan' is to use Platinum ... this is stupid ... the only truly appropriate material to strike this particular denomination in is Plutonium. S24
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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#10
Polonium... because your debt is toxic. :evil:
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#11
(11-24-2013, 04:32 PM)Fredledingue Wrote: Polonium... because your debt is toxic. :evil:

I'm sticking with Plutonium. It's toxic as well ... but can also "blow up" quite violently and abruptly in one's face. I would further argue that Polonium is associated with 'stealthy' mischief. Regardless what the Bernankes and Yellens might delude themselves into thinking, there's nothing really all 'stealthy' about this particular mischief.

Hey test this theory. I'm starting to believe that the U.S. Stock Markets are behaving perfectly rationally. What are the odds that investors have come to the collective conclusion that when it comes to assets valued in dollars, it's much better to own the assets ... ANY assets ... rather than the dollars themselves. Whaddya think?

Check this out. Negative interest rates ... ??!! I don't believe for a second that there is any incentive to 'taper' ... but the F'ed can still muscle some extortion in an entirely different way. This is dangerously confusing. In general, inflation and interest rates work somewhat in tandem driving down the value of cash. Here is a totally different way of making cash a liability. It's very difficult to imagine how cash can be cast as an albatross without damaging the dollar itself ... and yet these twits seem game to give it a try. The best I can figure is that they're using Japan as some sort of a template. Little help here ... is this deflationary inflation or inflationary deflation?? ... or just sheer madness? Is the intent here to bend the yield curve into a circle? ... or maybe just tie it in a knot?

I may have to amend my theory above. It may be that the F'ed is making investor's 'decisions' for them via fiat.
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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#12
(11-23-2013, 05:30 PM)mv Wrote:
Quote:The article flies in the face of the conventional wisdom that China needs the US to buy its goods

But conventional wisdom does not take into account the possibility of the US economy collapse. If the Chinese think this is coming anyway, it makes sense to handle the collapse on theirs terms, for instance by limiting the exposure now.

Very little notice was taken ... except maybe by Peter Schiff ...

I'm as astound as Schiff by the continued effect of whispering the name of the "Taper Tiger". It's as if people forgot that there was a QE1 (which was not unwound) and a QE2 (which was not unwound) followed by periodic taper chanting ... interspersed with talk of doing nothing at all.

Does anyone here really see taper in these tea leaves?

[Image: 800px-U.S._Federal_Reserve_-_Treasury_an...s_Held.png]
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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#13
(11-30-2013, 02:26 AM)raaheal Wrote: Who want to buy bonds when all these bonds must be repaid with printed money?

Why print it when You can just digitize it?
___________________________________________________________________________________________________
"INSIDE EVERY PROGRESSIVE IS A TOTALITARIAN SCREAMING TO GET OUT" - David Horowitz

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#14
That's the current deal. The fed doesn't need to print notes anymore to inflate the currency. Do it on a PC. We loaned a ton to Euro banks digitally.
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#15
(11-30-2013, 12:29 PM)Palladin Wrote: That's the current deal. The fed doesn't need to print notes anymore to inflate the currency. Do it on a PC. We loaned a ton to Euro banks digitally.

Doesn't matter. Faith and trust based currency still relies on "faith and trust". The medium is digital ... the matter is still faith and trust. When it comes to selling debt, you need customers. And when it becomes clear that the F'ed is the only remaining customer the jig is up. At that point it becomes Wiemar Republic stuff ... paper, binary digits, whatever ... again, it just doesn't really matter. The difference between the bit coin and the dollar is it takes some 'bit' of effort to develop the unique 'value' inherent in a bit coin ... it's a "virtual intrinsic". Whereas, it takes virtually no effort at all to change a figure by a full order of magnitude on a balance sheet. The F'ed is playing boy who cried wolf. Every time the 10 year bond rises above 2.7% they talk taper and tout Janet Yellen as the new 'Hawk' ... then they shut up ... rinse and repeat, rinse and repeat. The last round of "Paper Taper" talk has sent stocks into the stratosphere and gold tumbling ... the markets gobble it up because it's what they want to hear ... but they can only hear so much of it ... after some number of repetitions, it will start to smell funny. Half of our debt is real ... that is someone other than the F'ed actually 'purchased' it using some real exchange traded entity. The other half has been shat out of thin air. And when the that funky smell comes along, the real hilarity will ensue .. because it will hit like a blast of skunk juice ... and everybody will smell it simultaneously.

The entire economy is now based on the notion that zero interest rates are completely maintainable for the 'foreseeable' future. Here is a fun looking unintended consequence if this proves to be even partially untrue in the near term. From the same people that brought you "if you like your health plan, you can keep it" ... now the new and improved "if you like your (corporate bond) interest rate, you can keep it". S24
"Democracy is the theory that the common people know what they want and deserve to get it good and hard."
-- Henry Mencken
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