Like A Thief In The Night

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Like A Thief In The Night

Like A Thief In The Night (Link to article on FSN)

Gold - Currency status since 2600 BC

 

To date, the crime syndicate has struck 3,800 times. At the bottom of this article you will find a partial list of the mob hits that have been made by the organized crime syndicate many refer to as: La Cosa Nos(Cen)tra(l) Banksters. The families of the diseased are large - entire nations. They made the unfortunate and common mistake of trusting their late, and once rich Uncle Currency with safeguarding the value stored in their life savings. Those that didn’t take out a life insurance plan suffered. Many, like the little children of Argentina, actually starved to death. 

The modus operandi is identical in every case. The loot is taken first, the heist ends with a rub on the mark.

like a thief in the night

Let’s look at the above crime scene. Germany lost World War I. They were saddled with war debt and forced to pay reparation. The French took over Germany's industrial base when the Germans got behind on their payments. Without the industry revenues the German government began printing to cover their debt and avoid default. 

‘Gave up its industrial base’.

“...government began printing to cover their debt and avoid default.”

Sound familiar? 

It should. Globalization off-shored the bulk......

 

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Re: Like A Thief In The Night

The World Monetary Earthquake, The Dash From Cash
By Ben Davies, CEO of Hinde Capital
September 28 (King World News) - Tinker, Tailor, Soldier, Sailor, Rich Man, Poor Man, Beggar Man........Thief

Globally GDP has been anaemic since the crisis first arose in 2007.  The inevitable conclusion of most countries today is that the best way to extricate themselves from the current mess is to shift effective demand away from imports onto domestically produced goods.   The preferred method is competitive currency devaluations.   

Unfortunately this is not possible for all, and leads to friction as countries effectively steal other nations output to bolster their own.   Plato and Aristotle referred to this as 'overgrazing', the ‘tragedy of the commons’.  Nothing changes.   This always leads to heightened tensions and conditions of capital controls and other protectionist behaviour such as punitive tariffs and quotas on imports often prevail.   Friedman's flat world aside - it is already happening.

To maintain the last decade of prosperity (illusion) countries are systematically hell bent on exporting themselves to economic health.   This is a zero sum game.  Not all countries can export at the same time by definition that the global balance of payments will not then balance.   For one winner there is a loser.   The implication on import prices is dramatic.   Inflation is imported or exported depending on your view point around the world.   Let's rephrase 'inflation' - global citizens will experience a rise in the value of goods due to creation of more money used to devalue their currency.   

The pursuit of mercantilist traditions may help alleviate the collapse in output for some, and the ensuing rise in goods prices may help government reduce the value of their debts; but at what costs? Increased international tensions and let's not forget the internal social unrest that is accompanied by citizens whose wages have not kept abreast of these rising prices.   

As the traditional English folk tune rhymes Tinker, Tailor, Soldier, Sailor, Rich Man, Poor Man, Beggar Man........Thief.   Rich or poor, you beg from your neighbour there is no two ways about it in the world of current accounts - you are a thief.   

It is politically more savoury to expropriate the output from another country, unfortunately this will be at the loss of the majority.

Within a single week 25 nations have deliberately slashed the values of their currencies.   Nothing quite comparable with this has ever happened before in the history of the world.   This world monetary earthquake will carry many lessons.

Henry Hazlitt 1948 wrote this in a book "From Bretton Woods to World Inflation", which predicted the inevitable collapse of this fixed exchange rate mechanism.   It was a compilation of his editorials from both his time at the New York Times and Newsweek, which ridiculed the prevailing economic Keynesian thinking to great effect.   A brilliant journalist, economists and liberal philosopher, this man intuitively understood the pernicious nature of the Bretton Woods fixed exchange rate arranged in 1944.

Murmurings of such 'beggar-thy-neighbour' currency devaluations have once again sprung up amongst the financial literati and rightly so.   Better late than never.   The truth be told is that we have been living in a highly unstable world even more so than under BW I.   The dollar pegs, primarily the Asian renminbi dollar semi-fixed exchange rate, what most refer to as Bretton Woods II, have (arguably) been responsible for the financial friction we observe today.

The RMB and US dollar are constantly colliding into each other. The clashing of these two tectonic currency plates has just begun to accelerate at an alarming rate.   Ironically the move to greater currency flexibility on the part of the RMB against the dollar stands ready to produce the almighty mother of seismic monetary events - the collapse of the fiat currency system.   The implications for government bonds, equities and real assets are profound.   Are we being overly sensational? We don't think so.

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2010/9/28_Be...

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Re: Like A Thief In The Night

 

From the article

To maintain the last decade of prosperity (illusion) countries are systematically hell bent on exporting themselves to economic health.   This is a zero sum game.  Not all countries can export at the same time by definition that the global balance of payments will not then balance.   For one winner there is a loser.   The implication on import prices is dramatic.   Inflation is imported or exported depending on your view point around the world.   Let's rephrase 'inflation' - global citizens will experience a rise in the value of goods due to creation of more money used to devalue their currency. 

To me the implication is that all countries are trying to make their exports "cheaper", not more expensive.  In order to achieve price inflation without affecting demand, wages must rise.  For the most part there seems to be little wage "inflation" amidst an abundance of labor and plant capacity on a global basis. In fact what appears to be happening is a decline of income, both real and nominal.  The oddly sticky price of oil ( I suspect collusion of govt, banks and producers to save the collective butts of the ME) only adds to the toxic mix reducing demand on other consumer goods - effectively a tax to bail out the ME from their wild spending spree of the last decade. The simple fact remains that most of this "printing' is accomplishing very little beyond inflation of financial markets (most would be 50% or more lower without it) and papering holes in bank balance sheets - virtually none of it escapes the financial sphere to mingle in the real world. I still contend that the full extent of debt deflation is not and cannot be revealed - to do so would collapse most of the banks on the planet.  They keep feeding the black hole which is in reality is only aiding its growth.  To kill it, it must be starved, not fed.

While there certainly has never been a fiat without a fatal ending, it is likely a bit premature to call for the death of the current global fiat scheme.  The failure of the global fiat scheme is in essence a failure of the global government structure.  The possibility of "mad Max" on a widespread basis would be highly elevated and certainly more prominent as population density rises.

And when fiat dies?  With 6 billion on the planet and only a tiny percentage holding gold and silver in a recognizable and usable form, the likelihood of a specie backed system suddenly arising seems remote.  In fact, were gold and silver to be broadly recognized as a medium of exchange, those holding might as well paint a giant target on their backs.

As to the comparison to Wiemar, its unfounded.  We don't have war reparations that must be repaid.  In fact it would be nice if everyone repaid us for bailing out their butts in WWI and WWII.  With interest and penalties (using the standard IRS formula) that should total about $50,000,000,000,000. Smile

 

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Re: Like A Thief In The Night
yobob1 wrote:

As to the comparison to Wiemar, its unfounded.  We don't have war reparations that must be repaid.  

We do have off-budget war expeditures that are paid for by issuing debt.  Billions per week...

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Re: Like A Thief In The Night

duplicated

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Re: Like A Thief In The Night
yobob1 wrote:

As to the comparison to Wiemar, its unfounded.  We don't have war reparations that must be repaid. 

I'd really encourage you to Google how much of the current budget goes to war, past and present. While we aren't paying reparations we are paying out the %$$ for our wars.

States 1812-1814 Continental Currency - Failed
United States 1861-1865 Confederation Notes - Failed

We've had 2 currencies that failed due to war.

Secondly, 

Let’s look at the above crime scene. Germany lost World War I. They were saddled with war debt and forced to pay reparation. The French took over Germany's industrial base when the Germans got behind on their payments. Without the industry revenues the German government began printing to cover their debt and avoid default. 

‘Gave up its industrial base’.

“...government began printing to cover their debt and avoid default.”

Sound familiar? 

It should. Globalization off-shored the bulk of our industrial base. In 1959, manufacturing accounted for 30%+/- of U.S. economic output. In 2008, it was 11%+/-. The United States lost 32% of its manufacturing jobs since 2000. Manufacturing employment in the U.S. computer industry is now lower today than it was in 1975. Asia produces 84% of all printed circuit boards. The United States has lost 42,000+/- factories since 2001. In 2008, 1.2 billion cellphones were sold, none were made here.

 

An out of control deficit has left Ben-Willy-Nilly-Bernanke printing. The formula for what we print is this: (Tax revenues taken in + What Communist China et al will loan us) - (What we owe out) = Counterfeit / print the difference.

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Re: Like A Thief In The Night

I'm quite aware of our current war budgets - most of which is "off balance sheet" and not included in the pentagon's "budget" - I should be so lucky to have a budget as flexible as theirs.  Both of your failed US currency examples are of "contrived" currencies created in direct relation to a specific war.  What you should really Google for is how similar the Continental is to the Euro. Your aforementioned examples were not the end of the world as there remained a functioning circulating currency of gold and "good" bank notes.  Of course it was the end of the world for Confederates - they lost the war.

Our loss of manufacturing is directly related to "free trade" which is a boldly stupid concept.  You simply cannot have free trade between severely disparate economies since manufacturing will move to the lowest cost producer which typically will employ people at slave wages, have draconian working conditions and hours, no costly pollution regulations and a government that is satisfied with wholesale corruption to grease the wheels.

Prior to the creation of the Fed, total govt expenditures (fed, state and local) as a percentage of GDP ran about 10% - today that number is in reality close to 40%.  Back then the bulk of the Federal revenue was tariffs.  It used to be that most imported goods were things simply not produced on shore or uniquely different.  Today everyone on the planet is trying to make the same items to sell to each other while consuming a lot of energy shipping it back and forth. In addition we have become incredibly efficient at producing stuff.  A relatively small percentage of the population makes everything for everyone else - 10% produce and 90% consume.  Most of us are just cannon fodder.  Point being, a small amount of legislation regulating imports (yes that's tariffs - and I'm quite aware of Smoot - Hawley which really was a case of formalizing what was already happening) and altering tax laws could just as easily create the correct environment to encourage on shore production.  That sound you just heard was Wal-Mart imploding.

While our deficit is obviously far too large to be sustainable, it is not insoluble. A great deal of the current deficit is "stimulus" which is resulting in 0% gain in the real economy - it is arguably in negative territory since govt is actively competing for sparse dollars.  In the mean time the debt deflation monster is gobbling up dollars at a prodigious rate quietly in the background.  Virtually no one alive today has any real experience with a debt deflation of the size we face.  Logically it must be so - bust follows boom and baby, we had one whale of a multi-decade boom. It seems that every economist and financial guru on the planet knows exactly how to hit the "+" sign on their calculators in their rush to tally up the "printing" and yet not one seems to own a calculator with a "-" sign on it to account for debt deflation.  People love to focus on the US and our woes without any thought that this explosion of debt was a world wide insanity.   The bust will be a global cleansing once it finally occurs - that's assuming we make it past Dec. 21, 2012 of course.

 

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Re: Like A Thief In The Night
yobob1 wrote:

I'm quite aware of our current war budgets - most of which is "off balance sheet" and not included in the pentagon's "budget" - I should be so lucky to have a budget as flexible as theirs.  Both of your failed US currency examples are of "contrived" currencies created in direct relation to a specific war.  What you should really Google for is how similar the Continental is to the Euro. Your aforementioned examples were not the end of the world as there remained a functioning circulating currency of gold and "good" bank notes.  Of course it was the end of the world for Confederates - they lost the war.

Our loss of manufacturing is directly related to "free trade" which is a boldly stupid concept.  You simply cannot have free trade between severely disparate economies since manufacturing will move to the lowest cost producer which typically will employ people at slave wages, have draconian working conditions and hours, no costly pollution regulations and a government that is satisfied with wholesale corruption to grease the wheels.

Prior to the creation of the Fed, total govt expenditures (fed, state and local) as a percentage of GDP ran about 10% - today that number is in reality close to 40%.  Back then the bulk of the Federal revenue was tariffs.  It used to be that most imported goods were things simply not produced on shore or uniquely different.  Today everyone on the planet is trying to make the same items to sell to each other while consuming a lot of energy shipping it back and forth. In addition we have become incredibly efficient at producing stuff.  A relatively small percentage of the population makes everything for everyone else - 10% produce and 90% consume.  Most of us are just cannon fodder.  Point being, a small amount of legislation regulating imports (yes that's tariffs - and I'm quite aware of Smoot - Hawley which really was a case of formalizing what was already happening) and altering tax laws could just as easily create the correct environment to encourage on shore production.  That sound you just heard was Wal-Mart imploding.

While our deficit is obviously far too large to be sustainable, it is not insoluble. A great deal of the current deficit is "stimulus" which is resulting in 0% gain in the real economy - it is arguably in negative territory since govt is actively competing for sparse dollars.  In the mean time the debt deflation monster is gobbling up dollars at a prodigious rate quietly in the background.  Virtually no one alive today has any real experience with a debt deflation of the size we face.  Logically it must be so - bust follows boom and baby, we had one whale of a multi-decade boom. It seems that every economist and financial guru on the planet knows exactly how to hit the "+" sign on their calculators in their rush to tally up the "printing" and yet not one seems to own a calculator with a "-" sign on it to account for debt deflation.  People love to focus on the US and our woes without any thought that this explosion of debt was a world wide insanity.   The bust will be a global cleansing once it finally occurs - that's assuming we make it past Dec. 21, 2012 of course.

I'm always amazed at how smart members of this community are.  What I don't get is that how someone with obviously 2x my IQ won't take into account the ramifications of a destroyed currency or the consequences / ramifications of shredding social programs.  Wal-Mart's CEO's statement went viral with Art Cashin last week, described was a modern day monthly midnight occurrence of a breadline.  11:00 PM at Wal-Mart buyers lining up to once a month waiting for the stroke of midnight when their benefit cards get recharged with QE money to buy baby formula.  We have 40+ million (1 out of 8) people in electronic bread lines.  Elderly eating cat food.  Unemployed extensions keeping people on financial life support.  The idiot politicians are afraid of pitchforks and torches, and oh, by the way, they are the morons who would have to flip the life support switch.

Aint going to happen - is my take.  I do respect your opinion.  I do think anything can and likely will happen.  I am impressed with your well thought out and VERY well informed point of view - even though I think it is the remote possibility. Take care.

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Re: Like A Thief In The Night

Davos, I doubt your IQ is half of mine - mine has oft been compared to room temperature.  Should you suffer that problem, please have your attendant check your drool bucket regularly. Smile

I don't discount the power of currency debasement, but the reality is we're trying to measure the unmeasurable with fiat comparisons. A lot of my perspective comes from what I see around me on a daily basis.  I am in no way wealthy - better off than most perhaps, but not "rich".  Frankly I don't give a rats ass how many Yen my Dollar will buy or whether the price of a new Mercedes went up 5% because the Euro rose.  I'm primarily concerned with what my dollar buys here.  But imports prices will rise to the moon!!!!!!!  And then who will buy them?  The purchasing power of Americans has declined - they've effectively been cut off the credit tree.  Double damning is they are actually paying down debt beyond what they're defaulting on.  They are also clinging more tightly to any dollar they can lay hands on - the effect of the combination is reflected in the rising savings rate.

Perhaps even more importantly is the sea change in attitude.  Thrift is the new "in thing". This is not a revolutionary concept, our grandparents (assuming you're near boomer age) went through the same thing in the 1930s.  I suspect the aftermath will be much the same - an extreme aversion to debt that will be passed on to the subsequent generations with diminishing effect until it is far enough in the rear view mirror so that we can repeat the same mistake again.

So what's happening in the real world?  Real estate prices are still dropping - something I expect to accelerate going forward. (you might want to take a look at what IMO one of the best analyst's view of the Case-Schiller is saying - http://www.safehaven.com/article/18369/this-gloomy-bloomberg-housing-art... ).  Small business owners are not able to meet their pricing targets.

http://www.safehaven.com/article/18364/qe-engine-revs-car-goes-nowhere

Yes, recently commodity prices are higher.  A couple of isolated supply issues explain some of it, but the vast majority is due solely to the inflated nature of the financial markets relying on Fed spoon feeding compounded by the myriad of new and "innovative" ways to gamble.  It is my best guess that when we see an equity melt down that you'll also see a melt down in commodities.  I beleive that is especially true in the PMs because of the ETFs - time will tell. I look at a world where obviously demand is down on a global basis. credit access and usage is declining and see no real demand driving price.

Assuming I'm correct the combination of a shrinking real world debt bubble, an equity melt down (retail investors have been exiting for months and buying fixed income in spite of the ludicrous IR) and the ongoing real estate debacle that has years and years to run (demographics also play a key role in RE) is going to reveal the true nature of this bust - and it won't be inflationary.

Regarding the shrinking real world debt bubble - what I would call "productive' debt not including govt and financial, most people don't fully account for the simple fact that is what you and I down here on the street do to make things go.  Everything else on the planet is leveraged from that.  When Wall Street blew a hole in the block with securitization of really bad loans (almost all of them), we down here on the street were no longer able to drive the economy - other than in reverse towards the flimsy guardrail on the edge of 1,000 foot drop.  Effectively a fractional reserve fiat economy is totally dependent on debt growth of the little guy.  Think of it as an inverted pyramid of leverage with us as the peak stuck in the sand.  There is no substitute.

I tend to take a longer view of things than most people.  I'm also typically early in my actions and warnings - perhaps due to my impatience with the length of my views.

I'm also willing to change my views if I discover a flaw or something arises out of the tail of the bell curve.  I rarely bet on anything that I'm unsure will win.  All that said I still like to hedge my bets where its practical - I hold an appropriate "core" percentage of my assets in PM because I cannot fully discount the popular 0$ view.

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Re: Like A Thief In The Night

Yobob - it's great to have your talents plying these waters.

I love to disagree with you and have learned, over time, that the odds are not especially good in taking the other side.

In this conversation I do take a slightly different view from you in that I happen to believe that the middle class has less and less clout these days as the driver of anything except the purchase of bric-bracs from China.  

I view the concentration of wealth, into the hands of the very rich and nation-states alike, to be a new feature of the current landscape.  It is the desires and preferences of these two classes that can, without the assistance of the withering middle class, shove prices to and fro.

When it comes to "money" and how fast its disappearing because credit is evaporating (no argument from me on that), I view Treasury notes as a form of money and I happen to think there are far too many of them kicking about, especially in foreign hands.

Putting these thoughts together I cannot rule out the possibility that a destructive rise in prices could occur.  Will it destroy people who cannot afford to buy the products?  Sure, but that may not be relevant while the pendulum is swinging away from 'paper' and towards 'things.'

I view this as very much of a live possibility and this is why I have positioned myself for both a rising price in 'things' as well as the possibility of a rise in the value of a dollar.  Although not equally I might add, I still favor the "dollar loses value" scenario by 7:3.

Either way a very large proportion of people lose purchasing power, and that's the main message.  Trying to figure out which way this will happen requires constant vigilance, good data, and an open mind.  I'm trying to maintain all three, but typically settle for two out of three on any given day. ;)

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Re: Like A Thief In The Night

Hi YoBob:

LOL, well, usually I only drool at the dinner table and while spelling.

Your thinking and your facts are sound. I might nit-pick and question the paying down over the defaulting, but that is neither here nor there - it's going down and it was what fueled the fake economy when wages were circa 1978 and prices weren't.

I suppose time will tell us which take is going to play out.  I'd say you can't predict human nature here - but to me the Fed isn't human, and moronic nature I can predict based on their past track record of scre#ing up anything and everything they touch.

Interesting (read: sh#tty) times we live in.

Take care! ALWAYS a pleasure to read your posts, I gain a LOT of knowledge from them!!!!!!

\\I see 600 blion in charge offs and 20 in paydowns

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Re: Like A Thief In The Night

Chris, the issue of wealth concentration is one of the main problems, but I have a different take on the effect of that concentration. People who have a lot of money don't really consume much more volume per capita when it comes to the daily expenses.  They may consume more expensive goods such as lobster and caviar instead of chicken gizzards and Friskies Seafood Buffet.  Do they buy 1000 times as much toilet paper?  Can building one super mansion offset building 100 tract homes?  Does a Rolls Royce, a Ferrari and a custom Hummer offset 1,000 Toyota Camrys?  The issue is one of volume of the mundane.  Everything in the "not rich" category is predicated on volume.  It doesn't take much volume decline to throw a giant monkey wrench in a producer - mostly because the capacity was built to handle boom volumes and its very difficult to slow down selling less at higher prices.  For many things you find it more efficient to cut margins, try to maintain volume at some optimized level of capacity utilization.

The bottom line is there is no real way the rich will offset the consumption declines of the not so rich.

I don't know that there are really any "rich" nation states if one is totally honest with the accounting.  China would seem the likely candidate, but it really appears to me that they have squandered their wealth by loaning more than their official reserves in unnecessary or unproductive enterprises - loans that for the most part will never be repaid.  If you'll recall China went through one bout of trying to clean up their banks' bad loans not all that many years ago. Regardless of the gum flapping about China's rising internal consumption, the simple fact remains that they are virtually totally dependent on export.  Most of their rise in internal consumption is due to exports creating the "wealth".  China remains an almost duplicate of the position of the US prior to the Great Depression - a fat lot of good that did us.

The question of what is money and what is not is a clouded issue.  My simple test is, can you walk into a grocery store and buy a box of Cheerios with it?  Obviously, cash, checks, debit cards and credit cards are recognized mediums of exchange.  You might even find a checkout clerk that would willing accept a gold Eagle at its stamped face value.  A treasury note?  I doubt it.  You really have to sell a treasury and convert it to cash.  That cash is already in the economy with the exception of true quantitative easing where the fed conjures up new "money" to purchase it.  So far that has been limited to about $400 billion.  The MBS and agency notes they "bought" (or exchanged for existing treasury notes) will return to the economy either in maturity or by sale - effectively a drain when it occurs and if you were paying attention most of what they bought had relatively close in maturity dates.  This applies to all sovereign debt - you cannot view this as a US only problem.

China has been a net seller of treasuries, but it appears as though they sold most of it before the value of the treasuries started rising - naturally forex complicates that issue too. To suggest they can "dump" their holdings is folly.  They would no sooner start than the price would collapse and they would be castrating themselves - effectively destroying their own balance sheet - and that applies to any large holder of treasuries or dollars. Its really a version of the old saying that if you owe the bank a little and can't pay, you have a problem.  If you owe a lot and can't pay, they have the problem. 

IMO prices are already way too high - its one of the reasons that the economy is bogging badly and velocity is really negative.  If it were not for transfer payments funded by borrowing from the ROW and ourselves, the problem would be much more obvious and we would be well on our way to the required deck clearing and finding out the true price levels that the economy can support. 

It is somewhat incongruous to say that incomes can decline and prices rise - perhaps up  to a point that can occur, but it can't go very far.  As people are often quick to point out, one item increasing in price can have a knock on effect in another item.  Oil is a prime example, but even where there may be some substitution available, the increase in demand on the substitute item will likely cause a price increase in the substitute.  What few consider is the opposite scenario where a price decrease can lower the price of something else.  So some will say they can't sell for less but they never consider that other cost declines make for a lower production cost. In reality most consumer goods have a very low percentage of their cost in the raw materials - so often that cost increase may be absorbed or offset with other cost reductions such as marketing or other things that drain the bottom line in order to maintain the required volume - its really a cash flow issue.  The producers have to have "X" cash flow to meet their fixed costs and some of the variables.  If you've ever run a small business you have to recognize that its not so much about profit as it is about cash flow.  Profit can be "conjured" in many accounting tricks, but there is no substitute for cash flow. Telling your bank that you "made" a million dollars in the stock market but you can't make the mortgage payment isn't going to fly.

I view the possibility of the dollar losing value as compared to other fiat a very real possibility - its been up down and sideways for its entire checkered career since Nixon.  What I view as a much lower probability is that long green  in hand used to purchase goods within the US will lose much value.  And again this really applies to any currency or nation no matter where you live.  The only thing that would immediately alter my view of any currency would be the wholesale physical printing of actual cash.  See Zimbabwe and their liberal use of zeroes.  When you boil down "money", you find it is all based on a tiny portion of it being actual cash - in the US < $500 billion and a similar amount circulating off shore. As they say out here in the wilds, "cash talks and bovine feces walks."

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Re: Like A Thief In The Night

Davos, I knew that most of the overall debt decline was due to charge offs. but what your chart depicts for me is that pay down or maturity of loans is becoming a significant factor.  It is also depicting that folks are not taking on additional or new debt at a rate sufficient to maintain any bubble illusion.  You can cover up bad loans by increasing the total amount loaned, which in reality was happening all along for the early and mid parts of the decade, but once the debt bubble stops inflating and begins to deflate, all of the chickens come home to roost.

Again what few people consider is the cash flow effect - its another hit to all the lenders who may look profitable ( See all mega banks) but run into cash flow problems. If true accounting were available, you would find that there are damn few solvent lenders.

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Re: Like A Thief In The Night

Like a thief in the night? Not exactly. But for the majority of people who have a life, unlike some of us who don't . . .other than to watch markets and currancy trades, it might seem like this all a quiet thief breaking onto a scene.

Sure, the Nixon un-backing the dollar with gold was the first indication for some. But really, the Hubbard's peak was on the scene influencing our future the moment he said it publicly in the 50s.  From that, when the first oil wells had any sign of "peaking" -plans had to be laid to determine what the effect would be. my guess is the un-backed dollar was the first move to re-position money with what every thing and every one wanted - energy. Any energy - oil, electric, nuclear or other.  Historians must have recognised its value and theorized its future for use in growth as well as the eventual un-raveling. Plain and simple - oil's position was obvious. It became more obvious in the Carter years when the rest of the public found out it was chained to it on every level of life.

These devaluing of currency wars are (IMHO) an ackowledgement that though things are one thing on the surface- there are vast under currents sucking what power the centralized banks have, back down to reality - the reality that we are an energy based society and that without it, there is no energy to hold a "new world order" together. They can't do it without centralized energy and they know that is coming to an end.

What happens when centralized energy comes to an end? --> Total de-centralization of everything. Governments run on the ability to mobilize, communicate, manage international trade to name a few. Decentralization of doling out goods no longer made by cheap oil or keep populations who have no jobs (because there is no energy to make anything) paying taxes to do what?

Sure, there appeared to be a plan to substitute energy with debt and build an empire dedicated to debt but it turned out badly (The Great Distruction is upon us) but it was a desperate effort to maintain some kind of control over a future that had none envisioned.  As a matter of fact, I'll bet my hat, they thought the transition to debt building was going so well they got greedy (everyone wants to own their own home don't they?).

That back fired on them when they failed to recognize the glitches in population growth - or over population itself as being a problem. The dumb bean counters could only do simple math - not integrate the whole picture. No, its not Davos drooling over his spelling - it was short sighted planning that got them here and the currancy wars are just another sign they haven't got a clue.

They think the old tricks will work to devalue currancy so goods become more expensive from over the border and goods will flow out (old trick) but not this time since they have too many eggs dropping outta their basket and the basket has a hole in the size of the US economy. And this time, the basket is held by some one else - "Chindia".

Chinia isn't like a group of Arab nations with a resource they must sell. Chinia will soon become the biggest consumer and all the debit it has accumulated will be traded at its set price as other countries via to get back their debit.

This time - its not like any other time in history (that I know of). Its time for them to put their tails between their legs and whimper off into a corner to hide. We're going to take a hit that will put us in austerity on every level and we have to re-build from there. We have years of poor management by politicians to pay for.

A thief in the night? No - this has been going on for over 50+ years in plain sight.

EGP

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