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Germanicus
06-13-2013, 09:33 AM
“‘In our opinion, the United States has already been defaulting… Washington had already defaulted on its loans by allowing the dollar to weaken against other currencies – eroding the wealth of creditors including China", Mr Guan of Dagong Credit Rating Agency said.

Ben Bernanke of the US Federal Reserve has been manipulating the currency of USA for a very long time now. Quantitative Easing or QE is the Federal Reserve printing endless amounts of money and then they buy bonds that nobody will buy to make it look like the US economy is not bankrupt. QE is an ongoing backdoor bailout of the US banks and corporations. The QE has only helped rich Americans and their international multinational corporatist friends. The American people never see any of that printed money. Obama lies to them and tells them that QE will make it easier for poor Americans and small business to borrow money. This is a lie. Banks are not lending to small business. The QE has also done almost nothing to the sky high US unemploymeny rate.

Nations such as Australia and Japan have been very angry about USA manipulating their currency because when USA lowers the value of their currency by printing mountains of free money it lowers the value of the USD. No value has been produced to print these USD's so all other USD become worth less value. The Australian dollar is pegged to the USD because the USD has the Reserve Status for now. A weak USD makes the Australian dollar much stronger and when that happens the high AUD hurts Australian exporters. Our friends in China are forced to pay more for the things they import from Australia and it hurts trade between our two nations.

China is a nation that helps USA by buying so much of USA debt in the past when people didnt want it. China helped save USA from collapse when USA caused the GFC. All of the US Government Debt that China owns is in USD. When Ben Bernanke runs unlimited QE all the mountains of free money that USA gives themselves makes the debt that China bought worth less value. USA is ripping China off. The USA has defaulted and China is the nation that are being hurt the most by the default.

I think it is about time the USA faced reality and admits that the nation is bankrupt. It is wrong for the USA to keep printing free money and eroding the wealth of their trusting creditors including the nation of China. The USA will collapse at some stage if they continue to refuse to accept reality.

China is trying to help the USA Government save itself from collapse by offering friendship and trade but the USA needs to do more. It is very hard to be friends with the USA. The future of the United States rests on Sino-US relations. It seems that China making all the effort and doing all the work. I was very sad to read about the snooping that the CIA/NSA have been doing to Hong Kong and mainland China. USA has really strained Sino-US relations at a time when USA should be doing all they can to strengthen ties with China. I was also saddened because the vast snooping network that the CIA/NSA has used against the people of mainland China and Hong Kong damaged trust in the Obama administration since so many US officials have been making unfounded accusations that some people in China were hacking America. I am not sure if anyone will be able to believe Obama and the US officials the next time they slander China in the tabloid western media. Now that we know that it is actually the United States Government that has the most vast snooping network in the history of mankind. It is such a shame that the USA have been doing this because China has been going out of their way to include the USA in the prosperity of the opening of the Asian Century.

The CPC has put up with a great deal of nonsense in the past from the USA and I am sure that this unfortunate revelation of American snooping, hacking and spying will be something the CPC can look past. I would like to see the USA make up for this massive insult to the world and to China by stopping the manilpulation of their currency and negotiating a transition to a Basket Reserve Currency in a way that protects against the eroding of the wealth of the Chinese people.
http://www.youtube.com/watch?v=qty_6JqsWNA
(: Remember Starter hats?

Peter1469
06-13-2013, 09:35 AM
Yes, printing money to devalue your currency is a de facto default. But, it is as old a trick as money. The Romans did it by cutting their gold coins with other metal.

But China is not in a good position to complain. Its financials are worse than the US's.

Agravan
06-13-2013, 09:37 AM
Germanicus - Hate the US much??

Germanicus
06-13-2013, 09:53 AM
I reckon Peter seems like a really nice fella. Most Americans are no worse than any other people. Better than Australians maybe. And our governments are no better than yours.

But yours the the Centre Point. All roads lead to America.

And I think now is endgame for the corporatists. I think we as people from the west need to stand together or we are headed for austerity, lower standards of living for the majority and some kind of corporate neo-fuedalism.

Its not really America. Your government are pyuppets just like ours. But our elections mean nothing. Yours do. Change has to start in America for the west. It cant start some other place. It will only work if it starts in America.

The class action that Americans have taken out is exactly the kind of thing I have been waiting for. I hope the whole thing evolves into an international political party. ( No, America doesnt have to do exactly the same and I am sure we can fit change around the US constitution. )

I hate the US Government. But its not really run by 'Americans'. The Federal Reserve isnt American. Americans are victims like the rest of us.

Agravan
06-13-2013, 09:55 AM
So, you're an advocate of "One World Government"?

Peter1469
06-13-2013, 09:57 AM
I too would like to see the corporatists lose their power.

Agravan
06-13-2013, 09:58 AM
I too would like to see the corporatists lose their power.
But how likely is that with politics in it's current state?

Peter1469
06-13-2013, 10:11 AM
But how likely is that with politics in it's current state?

It isn't. If we manage to crash our currency, it could happen then.

Cigar
06-13-2013, 11:13 AM
So far, no one has anything better that US $-Cash-$

Peter1469
06-13-2013, 11:15 AM
So far, no one has anything better that US $-Cash-$

That is because other currencies are weaker than the USD. It doesn't mean that the USD is strong.

TheInternet
06-13-2013, 12:46 PM
Ehh... I used to beat this drum. Data doesn't seem to support the idea our currency is being heavily devalued. Inflation has been relatively low during QE. Further, the Treasury will have to pay the fed back. It's basically a 0% (or very low interest) loan to the gov.

Peter1469
06-13-2013, 12:56 PM
Ehh... I used to beat this drum. Data doesn't seem to support the idea our currency is being heavily devalued. Inflation has been relatively low during QE. Further, the Treasury will have to pay the fed back. It's basically a 0% (or very low interest) loan to the gov.

Inflation is low because of QE, IMO. Watch it rise as QE tappers off.

TheInternet
06-13-2013, 01:06 PM
Inflation is low because of QE, IMO. Watch it rise as QE tappers off.

Care to elaborate on your theory as to why that's the case? Why would it rise as a result of QE tapering off?

Peter1469
06-13-2013, 01:20 PM
QE is the process of central banks buying up safe assets. This artificially lowers interest rates. Once QE tappers off those interest rates will rise. That is good for investors. But it will not be good for governments that have to pay off high levels of debt.

I know that many analysts separate the issues (QE and interest rates). Even if low interest came first, I still believe that tapering off QE will result in an increase in interest rates.

TheInternet
06-13-2013, 01:48 PM
Inflation and interest rates are inversely correlated. I agree with you that ending QE is going to cause an uptick in interest rates. As money becomes more expensive, overall consumer demand is reduced.

Back to the original topic of impact of ending QE, you will have a contraction of the money supply as the treasury pays off the fed, and interest rates rising, both of which are not conducive to inflation.

Peter1469
06-13-2013, 01:55 PM
Inflation and interest rates are inversely correlated. I agree with you that ending QE is going to cause an uptick in interest rates. As money becomes more expensive, overall consumer demand is reduced.

Back to the original topic of impact of ending QE, you will have a contraction of the money supply as the treasury pays off the fed, and interest rates rising, both of which are not conducive to inflation.

That brings us to the old inflation / deflation battle. I would have to do a lot of research to get up to date on that old argument.

As QE ends and interest rates rise, the costs of servicing the debt will skyrocket. That will future contract the money supply as more and more of the budget is spent to service the debt.

TheInternet
06-13-2013, 02:02 PM
That brings us to the old inflation / deflation battle. I would have to do a lot of research to get up to date on that old argument.

As QE ends and interest rates rise, the costs of servicing the debt will skyrocket. That will future contract the money supply as more and more of the budget is spent to service the debt.

Inflation results from a rapidly expanding money supply, not a contracting money supply.

Peter1469
06-13-2013, 02:14 PM
It is a bit more complicated than that. http://www.zerohedge.com/news/2013-05-23/will-it-be-inflation-or-deflation-answer-may-surprise-you

I agree with the basic principle. I was focused on the larger monetary policy issue and what may cause inflation or deflation.

TheInternet
06-13-2013, 02:35 PM
It is a bit more complicated than that. http://www.zerohedge.com/news/2013-05-23/will-it-be-inflation-or-deflation-answer-may-surprise-you

I agree with the basic principle. I was focused on the larger monetary policy issue and what may cause inflation or deflation.

Im not going to debate an article that starts with the premise "financial collapse is coming!!!" then analyzes the false choices of inflation or deflation as the only options, but strangely enough never considers that maybe, we might get an outcome somewhere in the middle.

For everyone of these doomsday financial collapse articles you show me, I'll show you three that say its not going to happen, and they'll be better sourced.

Peter1469
06-13-2013, 02:40 PM
Im not going to debate an article that starts with the premise "financial collapse is coming!!!" then analyzes the false choices of inflation or deflation as the only options, but strangely enough never considers that maybe, we might get an outcome somewhere in the middle.

For everyone of these doomsday financial collapse articles you show me, I'll show you three that say its not going to happen, and they'll be better sourced.

Fair enough.

Mainecoons
06-13-2013, 03:13 PM
Got this email from my buddy:


Bread and Circuses. That is what the Roman Emperor advised to keep the citizens happy.

Watching the news, I can't help but think that the US government is doing just that.

There's a handful of scandals going on but none are significant. None have any potential to take down the government.

Take the Snowden/NSA story. I haven't seen anything that you couldn't read in Wired Magazine over the past 2 years. The only thing that I find interesting is that Snowden appearantly doesn't know as much as I do and he worked there.

The real story is the fact that the US is drowning in debt and the situation is getting worse and worse. At the present time, the debt ceiling has been breeched and the Treasury is paying bills by raiding the Federal Employees Retirement Fund but I've not seen one story on this other than on some of the fringe blogs.

Obamacare is supposed to go into effect on January 1st. So far, it is the biggest cluster fuck in history. No one knows what the rules are or will be and depending on who you ask, it may or may not go into effect.

One thing is dammed sure about Obamacare is that it will cost a huge amount of money that the US doesn't have and may not be able to borrow. It is already shifting the work weeks and distorting employment and it hasn't even started yet.

There is a report out today that looks at a realistic accounting of the next 30 years. It shows that the optimistic deficit will be $72T and the pessimistic deficit will be $120T. There is no way that will ever happen. That would put the GDP/debt ratio between 600-1000%. No nation has ever survived at such numbers. The closest is Japan at about 250% and it is currently imploding.

We were talking at breakfast this morning about this and what can be done. Nothing can be done, it will just implode and that will be that.

The only sane thing to do is to get as far away from the implosion as possible because it will be nasty.

No one in the government wants to face this and I really don't blame them. I wouldn't either.

I'm wondering just how long this happy talk will last until something happens. I'm sure that the government is wondering the same thing because the government is gearing up for a fight. Looking at the gun sales, it looks like the population is gearing up also. Just looking at the numbers, the population has the edge by about 100/1.

All you have to do is to look around the world to see what will happen. Go look at Greece and Cyprus. They are devastated. Look at the population outflows from Spain, Ireland, Portugal etc.

So ignore all the scandals. They make a good circus, but that is just what it is, a circus.

Mainecoons
06-13-2013, 08:58 PM
Here is the report mentioned above:

http://www.nationalreview.com/article/350983/ron-johnsons-transformative-proposal-jonathan-strong


$4 trillion? Try $106 trillion, the medium estimate. That’s $106,954,000,000,000. Even the lowest, extremely conservative estimate comes in at $72 trillion; the highest is over $120 trillion.