The demise of the US dollar.
Posted 10 March 2003 - 12:04 AM
No, that number would be meaningless. That's the total debt in the system, which is about $125K per capita or $500,000 for a family of four.
When the debt based currency scheme reaches the point where money-creation no longer produces growth,because the costs of servicing the debt limits the consumers spending, we either see a bankruptcy cascade like the '30's or an inflationary period like Argentina recently.Either way creditors(bondholders, pensioners, social security recipients and future recipients, anybody who holds dollar assets) don't get their capital returned to them.
With interest rates reaching (the last)depression levels and the economy slipping into (the next)depression anyway there can be no doubt we are at that point.
Posted 10 March 2003 - 12:16 AM
Posted 10 March 2003 - 12:36 AM
From the recent BK's, those who have the cash can buy assets for pennies. Look at companies like global crossing that took over 10 bil to create, bought for like 300 million. Even though those assets are worth only 300 mil in todays market, you can not recreate it for anywhere close close to 300 mil and it might end up worth 30 mil soon, still the actual value of running a business with that infrastructure is many times greater. Another incomphrensiable way of dealling with money. Something is worth a lot more than what you pay for if you have the right connections.
Posted 10 March 2003 - 11:59 PM
Originally posted by SmallMind
ITS NOT ABOUT THE OIL.
Just the things it can buy.
You are right, the war against Iraq is NOT about OIL. but it is about OIL CURRENCY.
OPEC wants to use the euro and Washington wants OPEC to use the dollar. Saddam switches to euros, so Saddam is to be made an example of.
Posted 14 March 2003 - 07:54 PM
The Real Reasons for the Upcoming War with Iraq: A Macroeconomic and Geostrategic Analysis of the Unspoken Truth
Incidentally, the final "Axis of Evil" country, North Korea, recently decided to officially drop the dollar and begin using Euros for trade, effective Dec. 7, 2002
The most likely end to US hegemony may come about through a combination of high oil prices (brought about by US foreign policies toward the Middle East) and deeper devaluation of the US dollar (expected by many economists). Some elements of this scenario:
1) US global overreach in the "war on terrorism" already leading to deficits as far as the eye can see -- combined with historically-high US trade deficits
Posted 14 March 2003 - 07:57 PM
This is intresting, I didnt know the EURo-Dollar was pegged.
Posted 14 March 2003 - 11:29 PM
To conclude, the Bush administration is not threatening Iraq out of pique or whim. The recent policies of both parties have indeed made the US vulnerable to foreign oil and petrodollar pressures. But hopefully decent Americans will protest the notion that it is appropriate to rain missiles and bombs upon civilians of another country, who have had little or nothing to do with this crisis of America's own making.
Some in addition will continue to explore avenues whereby America's oil and financial vulnerabilities can be diminished without continuing down the road to Armageddon. These problems are serious, but economists have put forward proposals for diminishing them peacefully and multilaterally. With respect to oil, Ralph Nader has just written, "The demand is simple: Stop this war before it starts and immediately establish a sane national energy security strategy." In fact one key ingredient of such a strategy, restriction of demand, can be found in saner parts of the Baker Institute reports that the Bush administration has so far chosen to ignore.
But an energy strategy for the United States must be addressed in the larger context of an economic and financial restructuring of global institutions and currency flows. With respect to the more esoteric financial problems of the dollar, the economist and futurist Hazel Henderson has written that "My recommendations for reforming current international institutions, revitalizing the UN and expanding civic society are summarized in Beyond Globalization (1999). A more balanced world order must center on reforming global finance, taxing currency exchange and reducing the dollar's unsustainable role as the world's de facto reserve currency (which is destructive for all countries -- even the US itself). I favor a global reserve currency regime based on the parity of the US dollar and the euro. The fundamentals in the USA and the EU suggest that the G-8 has an opportunity to peg the dollar and the euro into a trading band. This, together with the new issue of SDR's [Special Drawing Rights]. proposed by all the IMF country members, promoted by George Soros and opposed only by the USA, would lend to more stable currency markets."
Without endorsing these specific proposals, I wish to second two rather obvious principles:
1) The problems of global financial instability must be addressed. As George Soros, famed as the man who broke the British pound in 1992, wrote later in the Financial Times,
Posted 15 March 2003 - 10:12 PM
Numerous leaks of information and analysis of activities of the US authority are a sufficient basis to forecast further development of the US economic policy. This estimate is extremely important as it will further determine future situation in the world in many respects.
Posted 16 March 2003 - 06:16 AM
America's influence in the world has up to now been based largely on good will generated by its willingness to resolve matters multilaterally. This legacy of good will is being squandered recklessly, as US officials insult European leaders and steer NATO towards irreconcilable disagreement.
Posted 16 March 2003 - 08:20 PM
This article appears in the March 14, 2003 issue of Executive Intelligence Review. Official Axed, Exposed Threat Of U.S. Housing Bubble Crash
A new government report showing the underlying weakness of the U.S. housing market and financial system, and an immediate demand by Wall Street that the head of the reporting agency be fired, has revealed a bruising and fight in Washington over a critical subject: the increasing rate of the financial disintegration, and what is to be done about it. The fight also shows the desperation of the Wall Street-City of London financier oligarchy, and the thuggery to which it will resort, to silence criticism and defend its unsalvageable, bankrupt financial system.
Posted 20 March 2003 - 05:55 AM
Melbourne. See www.theage.com.au
In this article Kenneth Davidson, a staff columnist of 'The Age', suggests (in paragraph 13) that: 'The US would have to redirect domestic demand for imported goods paid for in dollar-denominated IOUs into exports to earn yuan and euros to pay for US imports'.
(Note: John Howard is Prime Minister of Australia)
March 20 2003
America is seeking to ward off any threat to its economic domination of the
world, writes Kenneth Davidson.
George Bush planned "regime change" in Iraq before becoming United States
President in January 2001. The events of September 11, 2001, were the
pretext for invasion of Iraq, not the reason.
The blueprint for the creation of a "global Pax America", to which Bush
subscribes and which is driving the invasion of Iraq, was drawn up in
September 2000 for Dick Cheney, Donald Rumsfeld, Paul Wolfowitz, Jeb Bush
(George's younger brother) and Lewis Libby (Cheney's chief of staff).
The document, called Rebuilding America's Defences: strategies, forces and
resources for a new century, was written in September 2000 by the
neo-conservative think tank Project for the New American Century.
According to the document, written three months before Bush became
president, "the US for decades sought to play a more permanent role in Gulf
regional security. While unresolved conflict with Iraq provides the
immediate justification, the need for substantial American force presence in
the Gulf transcends the issue of the regime of Saddam Hussein."
The document outlines the global ambitions of the Bush Administration. It
sets out a "blueprint for maintaining global US pre-eminence, precluding the
rise of a great power rival, and shaping the international security order in
line with American principles and interests".
The question for John Howard must be: to what extent does his Government
subscribe to the Bush strategy outlined in the think tank's document?
Howard says Australia's participation in this war is in Australia's national
To answer that question we must know why the war is being fought in the
first place. For all I know, Bush, Howard and Tony Blair may be absolutely
sincere when they claim that getting rid of Saddam is a humanitarian act
that will make the Iraqis better off, or that Saddam has the will, the
motive and the weapons of mass destruction capable of threatening other
countries. But these are not the real reasons for the invasion.
The real reasons can be summed up as deciding who controls Middle East oil
and gets access to the water from the Tigris and Euphrates, and what
currency will be used to pay for the development of the oil and water
According to the think tank document, the US would have to increase its
defence spending to 3.8 per cent of GDP (which it has just achieved) to
finance an American military capability "to fight and decisively win
multiple, simultaneous major theatre wars" and to "perform constabulary
duties associated with shaping the security environment in critical
This is a massive task that can only be achieved if the US can continue to
draw on the resources of the whole world, which in turn is only possible if
the US can continue to run massive trading deficits with Western Europe,
China and Japan. In other words, these regions must remain willing to
exchange the product of their industries for American dollars.
It would be fatal to America's global strategic ambitions if countries in
Europe began to ask for euros instead of US dollars for their exports, or if
China demanded settlement of their accounts with the US in yuan instead of
US dollars. The US would have to redirect domestic demand for imported goods
paid for in dollar-denominated IOUs into exports to earn yuan and euros to
pay for US imports.
It is difficult to see how the US could develop new, internationally
competitive industries and run a military machine on the scale envisaged by
the think tank without a massive increase in taxation and redistribution of
wealth to the productive elements in the economy without precipitating a
In 2000, Saddam's regime had the temerity to demand payment in euros for the
trickle of Iraqi oil the US has allowed onto the international market. Iran
and Venezuela are following Iraq's example. This is the real threat to US
If the US can control Middle East oil production, it can control the
industrial development of Europe, China and Japan (and Australia), to
prevent a rival to its hegemony emerging. But to do this it must retain the
greenback as the world currency.
It is possible to make a weak case based on realpolitik why Blair is along
for the ride with Bush in Iraq (BP and Shell), but it is impossible to see
what Australia will get out of this adventure even if it "succeeds".
Bush personifies the American quest for absolute security. Americans don't
yet understand or care that this status can only be achieved by making
everybody else absolutely insecure.
This is why the most lasting thing to come out of the war with Iraq is
likely to be the faster development of a unified Western Europe and an
economically powerful China to challenge US hegemony.
Kenneth Davidson is a staff columnist.
Posted 27 March 2003 - 02:55 PM
So far, watching this 6 day war unfold (oops, not the cake walk everyone seemed to expect) has been pretty comical. Now don't get your panties in a bunch, Isky and moronic company. I'm not talking about the battlefield. So far that's been the non event I pretty much expected it to be. Like I said way back in, I believe November, Saddam, unless he was a complete moron would withdraw his forces into the main cities of Iraq and try to draw the US into a messy urban street fight. Turns out he wasn't a complete moron afterall.
No, I'm talking about the way its unfolded on Wall Street. Competely oblivious to the horrible economic news, Wall Street is reacting with lemming like precision to every blip of news on the 6 day war (oops, my bad).
Too funny. Oh, but hey, its just me who doesn't get it. I'm the only one who can't see Lefty's rose colored reality that all our problems (well, at least 90% I guess) are due to the "Iraq question."
Common sense goes into the shitter and everyone gets excited at the first sign of "hope" that the war will soon be over.
Today's market action was gut busting proof of the idiotic tunnel vision gripping Wall Street. First, the market dips on the stupid rumor that we're about to go to booga booga red alert. But then, the real comedy unfolded as the market reacted to the truly ludicrous notion that Saddam had for some reason decided to march his forces out into the open, right into the teeth of the mighty US army to be chewed up with "desert storm" ease. Now this was good news because everyone knows such a braindead strategy would be suicide and may just result in a speed end of the war.
Yes, lil' bulls, everyone did realize the folly of such a move. Especially Saddam who has no such intentions of doing anyting that stupid.
No, its pretty clear how this thing is going to play out. One can almost envision the republican guards holed up deep within residential apartment complexes biding their time (in "odd" numbered apartments, perhaps---one civilian family, then one republican guard machine gun nest, then one civilian family, then one republican mortar position).
Anyway, its almost time to tune back into CNN, because things are about to get interesting. The easy targets have been hit, and soon the US will begin the messy phase of the end game.
18 people dead in a market hit by a stray cruise missile (that was lead in news in every city of the world except for the US)? Is it callous to say...WHO GIVES A FLYING ****? There will soon be a lot more.
Well, too damn bad. This is war, people. And the US is going to eventually have to come to grips with that fact.
Anyway, lets hope for a speedy resolution so the things that really matter can start to take precedent. The market is enjoying a vacation from reality, but that respite will be ending with this 6 day war (oops again).
The sooner the war ends, the better it will be for the bears.
Hey, how do you like me know?
Posted 27 March 2003 - 03:15 PM
Posted 27 March 2003 - 05:07 PM
I never expected this thread to go on so long,great discussion.
As far as the lunacy on wall street goes, the Japanese let the cat out of the bag when they announced that they had partnered with the US Fed to support the markets. The Japanese do it all the time,so does the US since long term capital and particularly since 9/11, but it's supposed to be a secret here in the land of free markets.
I caught most of the pop and am now out of the market again, I missed the last up day but that's OK with me.The US media isn't even bothering to report 10K filings for 2002. What a joke.
There's a lot of complexity on both sides of the Iraq issue, here we are at peak oil, the end of the fiat money cycle and we're at war. Interesting times for all of us. Bush is not going to back down, so we have to hope and pray for a quick end to the war whether we think it likely or not.
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