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Because central banks make credit reserves so easy for large banks to obtain, it creates a system where banks don't really need your deposits anymore, in order to lend.
So couldn't the US Dollar already be seen as a worthless currency? There is little hope for paying down the debt and The Federal Reserve is printing money like crazy and using it to pay foreign debts.
I remember reading somewhere that when our foreign debtors realize what The Federal Reserve is doing they will become furious and the US Dollar being the World's Reserve currency could be jeopardized.
If this happens every single American will feel the effects instantly. 2011 will seem like the 1950's compared to what could potentially happen.
What If The U.S. Dollar Loses Reserve Currency Status?
"The country’s most successful investor Warren Buffet similarly says the U.S. will inflate away the value of the currency to pay off the astonishing debts and obligations. Bill Gross the managing partner of PIMCO, the world’s largest bond fund, says the dollar will fall by at least twenty percent in the next year to two. Legendary currency trader Jim Rogers argues that the dollar is finished, and he is heavily buying gold and silver"
It seems that The Federal Reserve is pushing our economy into collapse with calculated measures.
The time is now to End the Fed and for America to issue it's own debt free currency.
So couldn't the US Dollar already be seen as a worthless currency?
No, because it is backed by America and Americans. For some people that's a good investment.
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There is little hope for paying down the debt and The Federal Reserve is printing money like crazy and using it to pay foreign debts.
We don't need to pay down the debt.
the terms of personal debt is inherently limited by the fact that people don't live forever. The concept is that a borrower will one day pay off his/her debts in full.
government does not have a lifespan, so therefore there is no need to "repay" the debt in full, ever. The goal is simply to ensure it has some value relative to other currencies (who are also based on fiat.).
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I remember reading somewhere that when our foreign debtors realize what The Federal Reserve is doing they will become furious and the US Dollar being the World's Reserve currency could be jeopardized.
they know, they knew when they made these investments what the risk was. When borrowing occurs on this scale, creditors are just as complicit as borrowers.
China and Japan, for example, employ strategies where they want their currencies to be cheaper than the U.S. dollar. Internally , some people in these countries (the exporters) WANT to increase their countries' holdings of dollars, to ensure that the yuan (or yen) is devalued alongside the dollar.
Other contingencies (military, for example) in these countries, want a stronger yen/yuan, and see things like you describe, where they fear a devaluation of their countries' dollar denominated holdings.
So even among our creditors, their societies are not in full agreement about the topic.
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It seems that The Federal Reserve is pushing our economy into collapse with calculated measures.
Dollar devaluation and economic collapse are two different things.
America, like China and Japan, has internal groups that prefer a strong dollar, and internal groups that prefer a weak dollar.
If you're underwater on your home, you want a weak dollar. If you're unemployed, you want a weak dollar. If you're a senior citizen, you want a strong dollar.
When gov't doesn't tax enough to cover our spending, we run deficits, and we print money, creating public debt. This is monetization, and it increases "the national debt." For America, right now, the main problem is that we have to make interest payments on it.
This process can cause inflation, but because private credit got so large, and began to deflate so severely, we have room to monetize public debt without creating inflation.
Which is why I said it "artificially" lowers public/national debt....
They aren't increasing the money supply to give the appearance they are burying you in interest.... No they are doing it to appear as if they are paying off debt. And it does cause inflation..
If we, as the current trend suggests, create a nearly infinite number of dollars, will not the value of each, and all, dollars drop to nearly zero? Or we go all the way to the limit and create an infinite number of dollars each worth zero.
This is where the religion of macroeconomics meets the real world of actually having to buy things like food and shelter.
Every time this topic comes up, it's always depressing to read through the "opinions", but those opinions do explain why we are in the fix we're in.
Here's the raw truth .... the Federal Reserve System is a scheme. It was designed as a scheme, and it operates as a scheme.
The FED Act of 1913 took the power to create money and regulate it's value out of the hands of congress, turning it over to a consortium of private bankers. The FED creates money and "lends" that money to the US Treasury with interest attached to each newly created dollar (be it printed, or electronic). The very structure of that precludes the possibility of ever paying off the debt, because for every dollar that exists to pay that debt, there is interest that is owed with no money available to pay it.
If the FED creates $1000 at 3% interest .... the amount owed is $1030. But if only $1000 actually exists ... where does the $30 come from to pay the balance? The answer is ... it doesn't exist, so you have to create-borrow that $30 too! But the moment you do, you are further in debt and owe $31. That cycle continues until you are bankrupt. This end result is unavoidable based on the scheme. It may take some time to reach that point, but it is nonetheless an inescapable conclusion right from the start.
Consequently, if you taxed people at 100%, you still could not pay off the debt because more money is always owed than there are dollars in existence to pay it.
You can't grow out of this debt, because as the economy expands, you need to "create" more money to facilitate that growth, which places you further in dept with the additional interest attached to each of those new dollars. The amount of interest owed continues to increase, with no way to stop it. If you slow growth, you have a recession ... if you stop growth, you wind up in depression, and as you do this, the debt continues to increase.
Everyone talks about spending and taxes ... but that only manipulates the rate of increase in debt ... it CAN'T eliminate the debt.
Some say you don't want to eliminate the debt ... and that would describe either the bankers who receive those interest payments, or idiots who don't understand the scheme.
Every time this topic comes up, it's always depressing to read through the "opinions", but those opinions do explain why we are in the fix we're in.
Here's the raw truth .... the Federal Reserve System is a scheme. It was designed as a scheme, and it operates as a scheme.
The FED Act of 1913 took the power to create money and regulate it's value out of the hands of congress, turning it over to a consortium of private bankers. The FED creates money and "lends" that money to the US Treasury with interest attached to each newly created dollar (be it printed, or electronic). The very structure of that precludes the possibility of ever paying off the debt, because for every dollar that exists to pay that debt, there is interest that is owed with no money available to pay it.
If the FED creates $1000 at 3% interest .... the amount owed is $1030. But if only $1000 actually exists ... where does the $30 come from to pay the balance? The answer is ... it doesn't exist, so you have to create-borrow that $30 too! But the moment you do, you are further in debt and owe $31. That cycle continues until you are bankrupt. This end result is unavoidable based on the scheme. It may take some time to reach that point, but it is nonetheless an inescapable conclusion right from the start.
Consequently, if you taxed people at 100%, you still could not pay off the debt because more money is always owed than there are dollars in existence to pay it.
You can't grow out of this debt, because as the economy expands, you need to "create" more money to facilitate that growth, which places you further in dept with the additional interest attached to each of those new dollars. The amount of interest owed continues to increase, with no way to stop it. If you slow growth, you have a recession ... if you stop growth, you wind up in depression, and as you do this, the debt continues to increase.
Everyone talks about spending and taxes ... but that only manipulates the rate of increase in debt ... it CAN'T eliminate the debt.
Some say you don't want to eliminate the debt ... and that would describe either the bankers who receive those interest payments, or idiots who don't understand the scheme.
I disagree with the bolded conclusion.
The cycle is not "doomed" to end in bankruptcy. All we need to avoid bankruptcy is to keep creating new dollars.
So we're not really "doomed " to any particular result, but rather we have a system which is perpetually at risk of too much inflation. We also have a system that taxes savers, and redistributes that among risk-takers in the financial industry.
Dollar devaluation and economic collapse are two different things.
America, like China and Japan, has internal groups that prefer a strong dollar, and internal groups that prefer a weak dollar.
If you're underwater on your home, you want a weak dollar. If you're unemployed, you want a weak dollar. If you're a senior citizen, you want a strong dollar.
I don't understand your logic on this....
Can you explain why you think that...??
I can't see why anybody would want a weak dollar...Advocating a weak dollar is selling a comfort level on our dependence of Chinese goods... You don't see rampant inflation because the Chinese yuan is pegged to the US dollar....
IF China stops picking up our debt and kicks the ladder out from under us.... How would you back this position??
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