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Thread: The American Empire is Bankrupt !

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    Default The American Empire is Bankrupt !

    This is either totally paranoid or totally scary !


    (snip)"This week marks the end of the dollar’s reign as the world’s reserve currency. It marks the start of a terrible period of economic and political decline in the United States. And it signals the last gasp of the American imperium. That’s over. It is not coming back. And what is to come will be very, very painful.

    Barack Obama, and the criminal class on Wall Street, aided by a corporate media that continues to peddle fatuous gossip and trash talk as news while we endure the greatest economic crisis in our history, may have fooled us, but the rest of the world knows we are bankrupt. And these nations are damned if they are going to continue to prop up an inflated dollar and sustain the massive federal budget deficits, swollen to over $2 trillion, which fund America’s imperial expansion in Eurasia and our system of casino capitalism. They have us by the throat. They are about to squeeze.

    There are meetings being held Monday and Tuesday in Yekaterinburg, Russia, (formerly Sverdlovsk) among Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization. The United States, which asked to attend, was denied admittance. Watch what happens there carefully. The gathering is, in the words of economist Michael Hudson, “the most important meeting of the 21st century so far.” (snip)

    (snip)“This means the end of the dollar,” Hudson told me. “It means China, Russia, India, Pakistan, Iran are forming an official financial and military area to get America out of Eurasia. The balance-of-payments deficit is mainly military in nature. Half of America’s discretionary spending is military. The deficit ends up in the hands of foreign banks, central banks. They don’t have any choice but to recycle the money to buy U.S. government debt. The Asian countries have been financing their own military encirclement. They have been forced to accept dollars that have no chance of being repaid. They are paying for America’s military aggression against them. They want to get rid of this.” (snip)

    (snip)“China is trying to get rid of all the dollars they can in a trash-for-resource deal,” Hudson said. “They will give the dollars to countries willing to sell off their resources since America refuses to sell any of its high-tech industries, even Unocal, to the yellow peril. It realizes these dollars are going to be worthless pretty quickly.”

    The architects of this new global exchange realize that if they break the dollar they also break America’s military domination.(snip)

    (snip)we have been flooding the world with dollars. The foreign recipients turn the dollars over to their central banks for local currency. The central banks then have a problem. If a central bank does not spend the money in the United States then the exchange rate against the dollar will go up. This will penalize exporters. This has allowed America to print money without restraint to buy imports and foreign companies, fund our military expansion and ensure that foreign nations like China continue to buy our treasury bonds. This cycle appears now to be over. Once the dollar cannot flood central banks and no one buys our treasury bonds, our empire collapses.(snip)

    (snip)Lanchester wrote in the London Review of Books. “There is no model or precedent for this, and no way to argue that it’s all right really, because under such-and-such a model of capitalism ... there is no such model. It isn’t supposed to work like this, and there is no road-map for what’s happened.”

    The cost of daily living, from buying food to getting medical care, will become difficult for all but a few as the dollar plunges. States and cities will see their pension funds drained and finally shut down. The government will be forced to sell off infrastructure, including roads and transport, to private corporations. We will be increasingly charged by privatized utilities—think Enron—for what was once regulated and subsidized. Commercial and private real estate will be worth less than half its current value. The negative equity that already plagues 25 percent of American homes will expand to include nearly all property owners. It will be difficult to borrow and impossible to sell real estate unless we accept massive losses. There will be block after block of empty stores and boarded-up houses. Foreclosures will be epidemic. There will be long lines at soup kitchens and many, many homeless. Our corporate-controlled media, already banal and trivial, will work overtime to anesthetize us with useless gossip, spectacles, sex, gratuitous violence, fear and tawdry junk politics. America will be composed of a large dispossessed underclass and a tiny empowered oligarchy that will run a ruthless and brutal system of neo-feudalism from secure compounds. Those who resist will be silenced, many by force. We will pay a terrible price, and we will pay this price soon, for the gross malfeasance of our power elite. (snip)

    from

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    Default Re: The American Empire is Bankrupt !

    What a depressing scenario. Thankfully, there are lots of people working towards a brighter future than this. If you focus on the negative, that is all you will attract in your life.

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    Default Re: The American Empire is Bankrupt !

    It is just enough to be scary, and yes it is totally paranoid. When you go through the article and pick out the actual factual information, you will notice that there isn't much substance there at all.


    • $2 trillion budget deficit (that part is true, but you can remove the qualifiers of "massive" and "swollen" as adding these kind of adjectives only serve to distract). What if the budget deficit was described as more sensible than FDR's budget deficits, and more easily recovered deficit (as it is being spun in some circles).



    • Six-nation Shanghai Cooperation Organization did happen, but the focus was the sanctions of N. Korea. This group is built of emerging economies, hence the presence of the US would be unseemly and over-reaching (besides the fact that the US never requested to be present). This quote is likely the segment the author latched onto and propagandized into "the sky is falling!" kind of fear mongering:

    From the AP: The BRIC leaders issued a statement that called for a more diversified international monetary system and a greater role for their nations in major global financial decisions, but they did not explicitly criticize the dollar and contained no reference to developing new reserve currencies.
    Aside from those 2 facts, where is the substance in that article? Please be aware that the writer's goal is to manipulate and frighten his audience. There is no dissemination of information here. Anyone who finds this article scary either wants to be scared or is very, very gullible to propaganda techniques.

    P.S. Just because a council calls for a change, even a council of heads of state, this means NOTHING. Until something has become international law, it is all just happy talk to win elections.


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    Default Re: The American Empire is Bankrupt !

    There is no need for speculation. Look to California, our economy's early warning system. Watch, Learn, Be proactive.

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    Default Re: The American Empire is Bankrupt !

    Super imperialism and the dollar hegemony will triumph as usual.

    Move along, nothing to see here.

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    Default Re: The American Empire is Bankrupt !

    ^^^ well, there's definitely something to see HERE from a normally 'optimistic' CNBC --->



    (sorry no way to trim off the opening 'commercial')

    there's also this 'opening salvo' in the international US treasury bond 'tug of war' from the same 'optimistic' source ...



    (snip)"The Treasury announced Thursday a record $104 billion worth of bond auctions for next week, part of its herculean efforts to finance a rescue of the world's largest economy.

    The sales will exceed the previous record of $101 billion set in auctions that took place in the last week of April and consist of two-year, five-year and seven-year securities. That record was matched by another $101 billion week in May.

    Though next week's total was broadly in line with expectations, worries about supply have weighed on the U.S. government bond market, which will see a mammoth $2 trillion worth of new debt issued this year.

    "Maybe the Treasury market reacted a little negatively and it will continue to be like this," said Suvrat Prakash, U.S. interest rate strategist with BNP Paribas in New York. "Supply announcements and auctions on the horizon will make the market a bit nervous about upcoming debt."

    Bond prices were lower already in anticipation of the Treasury's announcement and continued to sell off in reaction."(snip)


    similar comments re CNBC's use of qualifiers 'a little negatively' and 'a bit nervous' !


    Just because a council calls for a change, even a council of heads of state, this means NOTHING. Until something has become international law, it is all just happy talk to win elections
    No new international laws are necessary for these heads of state to effect a change. All they need to do is NOT BUY US Treasury Bonds at the upcoming auction ... or simply start selling off some of the trilliions in US treasury bonds which they already hold in their foreign exchange surplus.

    While I won't bore you with snippets from 'pessimistic' sources, I will briefly mention the latest theory. In a nutshell, the mere announcement of the size of the next T bond auction has already sent bond prices lower thus interest rates higher. The FED has two choices going forward.

    A. they can 'buy' their own new treasury bonds with newly printed money in the absence of sufficient interest from foreign buyers .... in which case interest rates will stay stable but the US dollar exchange rate / purchasing power will decline (triggering additional increases in the US dollar price of oil / food / energy / commodities / imported products)

    B. they can allow imputed interest rates on the new T bonds to rise to the point where foreign buyers will actually buy all of the bonds the US gov't needs to sell in order to finance Obama's stimulus package ... in which case the US dollar exchange rate / purchasing power will stay stable, but interest rates on mortgages / car loans / credit cards will increase ( triggering yet more defaults, repo's and bankruptcies, triggering further drops in US housing prices, and further suppressing the ability of US consumers to obtain new loans thus suppressing new home / car / credit card purchases ), and US stock market prices will decrease.

    ~
    Last edited by Melonie; 06-18-2009 at 03:32 PM.

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    Default Re: The American Empire is Bankrupt !

    All they need to do is NOT BUY US Treasury Bonds at the upcoming auction ... or simply start selling off some of the trilliions in US treasury bonds which they already hold in their foreign exchange surplus.
    So the Fed buys them, and old debt gets devalued. We just haven't had the mental paradigm shift that makes the amounts in question palatable.

    Super imperialism wins again.

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    Default Re: The American Empire is Bankrupt !

    Quote Originally Posted by Melonie View Post
    No new international laws are necessary for these heads of state to effect a change. All they need to do is NOT BUY US Treasury Bonds at the upcoming auction ... or simply start selling off some of the trilliions in US treasury bonds which they already hold in their foreign exchange surplus.
    That is highly unlikely to happen. Even though they are working together as a block right now, when push comes to shove, China will likely acquiesce to American financial might. Once China has backed off, the rest are too weak to make any difference.

    China would be looking at financial and economic disaster w/o the US. We are a bit like an unhappily married couple at the moment; neither likes the situation, but has to put up with it to keep up appearances and to pay the bills.

    It looks like China is trying to figure out how to get out this arrangement, but there really isn't another option at this time.They have even acknowledged that they don't want to buy American bonds, but what choice do they have? The South American nations hold the best hope of future economic development, and hence new and powerful markets, but that is still several decades away.


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    Default Re: The American Empire is Bankrupt !

    They have even acknowledged that they don't want to buy American bonds, but what choice do they have?
    The choice they have, and the choice which they are actively exercising and expanding, is to arrange for 'currency swaps' with trading partner countries. These 'currency swaps' allow the Chinese to trade with a growing number of countries via direct exchange of local currency for Yuan, eliminating the previous need for both countries to convert to US dollars in order to effect said trade.

    (snip)"The People's Bank of China has agreed to provide 650 billion yuan ($95 billion) to Argentina, Belarus, Hong Kong, Indonesia, Malaysia, and South Korea through so-called currency swaps. More such arrangements are being planned so importers can avoid paying for Chinese goods with dollars, the central bank said. In Hong Kong, which has pegged the currency to its U.S. counterpart since 1983, stores from Park'n Shop supermarkets to jewelers accept yuan. (snip)

    from

    China also 'bit off their own nose to spite their face' by being a net seller of US Treasury bonds last month !

    (snip)"Jun 17 03:20 AM US/Eastern

    A decision by China to reduce its US Treasury holdings suggests concern about the US attitude towards its economic woes, Chinese economists were quoted as saying in state media Wednesday. The remarks, coming after US data showed a modest decline in Chinese investments in US government bonds, were in contrast to an earlier statement in Beijing which had said the recent sell-off was a routine transaction.

    "China is implying to the US, more or less, that it should adopt a more pragmatic and responsible attitude to maintain the stability of the dollar," He Maochun, a political scientist at Tsinghua University, told the Global Times.

    According to US Treasury data issued Monday, Beijing owned 763.5 billion dollars in US securities in April, down from 767.9 billion dollars in March.

    It was the first month since June 2008 that Beijing failed to purchase more US T-bills."(snip)

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    Default Re: The American Empire is Bankrupt !

    http://money.cnn.com/2009/06/19/mark...ion=2009061913

    (snip)"To try to keep a lid on yields, the Fed has been buying back $300 billion of its own debt, a program called quantitative easing.

    On Monday of next week, the Fed will buy an undisclosed amount of debt that matures between December 2013 and April 2016. On Thursday, it will snap up debt maturing between August 2026 and May 2039. "(snip)

    tada!
    Last edited by Melonie; 06-22-2009 at 09:36 AM.

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    Default Re: The American Empire is Bankrupt !

    ^^^ what the article doesn't mention is where the $300 billion came from for the FED repurchase of existing US treasury bonds. The answer of course is *poof* it was 'printed' out of nothingness !

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