[Flying-Dutchman]

Originally Posted by jsg34

If some of you actually live in this bubble of fear and paranoia and aren't just doing a bit of "chain pulling" then I really feel for you. Go outside. Take in a show. Travel. There is more to life than hoarding ammo and Vienna sausage.

I wonder what the folks who spent every last penny on shelters and provisions for the inevitable 1950's global nuclear war thought as they lay dying, penniless. They may have died at the same age as their non-prepping counterparts, but I bet their life was a lot less fun.

This could also be said of people, who prepare their entire life for retirement; who view life as a destination not a journey.

You can prepare for tough times without being a miserly Scrooge.

Do not keep your entire wealth in dollar denominated assets.

Resist being brainwashed by advertisers influencing you to buy this car, clothes or house to keep up with the Joneses.

Get off the gerbil wheel of debt.

Resist what someone else’s definition of what fun is or what retirement is.

[czsmithGT]

Originally Posted by devildog2067

It's crazy to think, but... as bad off as the US dollar is, every other currency is worse.

I'm sure that one day the US dollar will lose its status as the world's reserve currency, but it won't happen anytime soon.

Don't be so sure

Is the Dollar Dying? Why US Currency Is in Danger
http://www.cnbc.com/id/100461159

"Bove uses several metrics to make his point, focusing on the dollar as a percentage of total world money supply.That total has plunged from nearly 90 percent in 1952 to closer to 15 percent now. He also notes that the Chinese yuan, the yen and the euro each have a greater share of that total."

"The No. 1 security issue we have as a nation is the preservation of the U.S. dollar as the world's reserve currency," said Michael Pento, president of Pento Portfolio Strategies. "It's a thousand times more important than a nuclear bomb being tested by North Korea. It's a thousand times more important that we keep the dollar as the world's reserve currency, and yet we are doing everything to abuse that status."

The dollar's seemingly precarious status is why Pento remains bullish on gold and believes the dollar's demise as the premier reserve currency could end even sooner than Bove predicts -- perhaps by 2015.

"Five to 10 years -- that would be an outlier," he said. "I would say 2015, 2016, that would be the time when it becomes a particularly salient issue. When we're spending 30 to 50 percent of our revenue on debt service payments, we enter into a bond market crisis. The dollar starts to drop along with bond prices. That would set off the whole thing."

[certifiedfunds]

Originally Posted by Flying-Dutchman

This could also be said of people, who prepare their entire life for retirement; who view life as a destination not a journey.

You can prepare for tough times without being a miserly Scrooge.

Do not keep your entire wealth in dollar denominated assets.

Resist being brainwashed by advertisers influencing you to buy this car, clothes or house to keep up with the Joneses.

Get off the gerbil wheel of debt.

Resist what someone else’s definition of what fun is or what retirement is.

Part of preparedness is being prepared for things to go on as normal because that is the likely scenario.


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[devildog2067]

Originally Posted by czsmithGT

Don't be so sure

From the beginning of the article you link to:

While the American currency still reigns supreme -- it constitutes $3.72 trillion, or 62 percent, of the $6 trillion in allocated foreign exchange holdings by the world's central banks -- the Japanese yen, Swiss franc and what the IMF classifies as "other currencies" such as the Chinese yuan are gaining.

This article is junk. This paragraph at the beginning says "here's why this can't happen" and then the rest of the article is about "yeah, but IF it did..."

World holdings of the US dollar dwarf those of any other currency. The yen is in big trouble. The Swiss franc is not, but Switzerland simply isn't a large economy and the only thing that Switzerland really sells is secrecy (I exaggerate, Switzerland is a manufacturing nation too, but they're just not that big). China holds too much in USD reserves to mess with the USD right now.

Is the dollar in trouble? Yes, yes it is. Will it lose its status as the world's reserve currency? Maybe. In my lifetime? Perhaps. By 2015? Not on your life.

[czsmithGT]

Originally Posted by devildog2067

From the beginning of the article you link to:



This article is junk. This paragraph at the beginning says "here's why this can't happen" and then the rest of the article is about "yeah, but IF it did..."

World holdings of the US dollar dwarf those of any other currency. The yen is in big trouble. The Swiss franc is not, but Switzerland simply isn't a large economy and the only thing that Switzerland really sells is secrecy (I exaggerate, Switzerland is a manufacturing nation too, but they're just not that big). China holds too much in USD reserves to mess with the USD right now.

Is the dollar in trouble? Yes, yes it is. Will it lose its status as the world's reserve currency? Maybe. In my lifetime? Perhaps. By 2015? Not on your life.

I wish you were right, I really do. But unfortunately you are wrong. Is 2015 the magic year? Who knows. Will it happen within the next 3-7 years? It is almost a certainty. Nothing can stop the acceleration of the negative dollar trajectory.

[devildog2067]

Originally Posted by czsmithGT

I wish you were right, I really do. But unfortunately you are wrong.

As long as the US keeps making stuff that the rest of the world wants to buy, I'm not wrong.

Is 2015 the magic year?

No.

Who knows.

Everyone with any sense at all.

Will it happen within the next 3-7 years?

No.

Again, I'm not saying the US dollar isn't in trouble. It is. I'm saying, as long as the US makes the world's best locomotive engines and industrial turbines and passenger jets and medical imaging devices, the dollar will survive. China isn't going to get awesome at building MRIs in the next 7 years.

[SouthernRaider]

Originally Posted by mhill

DevilDog and Atlas are spot on in this thread.

No war will come of this.





The US can always print it's way out of a debt problem. That's why they got rid of the gold standard.

No, no, no, and no.

[SouthernRaider]

Originally Posted by devildog2067

The fact that the fund couldn't get the swaps to pay out is my argument. Are you being deliberately obtuse, or are you just incapable of understanding?


Of course it was.

I never said or implied that a US debt default wouldn't be a disaster. I simply disputed your attempt to say that credit default swaps would have any effect on the size of said disaster.

My point remains: credit default swaps simply do not matter in the context of a default on the US debt. If that were to happen, it's unlikely that the swaps would pay. Everyone knows this. (It just happened again in Greece, as farscott points out.)

The swaps don't pay and it will be a disaster.

I don't care if they pay or not......fact is the books of many financial entities is full of junk backed by worthless CDS's.

How big? Who knows?

[SouthernRaider]

Originally Posted by czsmithGT

I wish you were right, I really do. But unfortunately you are wrong. Is 2015 the magic year? Who knows. Will it happen within the next 3-7 years? It is almost a certainty. Nothing can stop the acceleration of the negative dollar trajectory.

This nation is a powder keg.

When guns and whiskey are the two industries really doing well be concerned.

[SPIN2010]

Riddle me this: How many chinese (sic) NAVY ships can you dock or anchor in close proximity to a Gulf oil rig?

Clue: I hear that Nexen Incorporated has taken on the task to find out via your politicians in Washington D.C., the CANADIAN prime minister, and China National Offshore Oil Corporation (CNOOC Group Chinese: 中国海洋石油总公司)

What debt?

[devildog2067]

Originally Posted by SouthernRaider

I don't care if they pay or not......

Then why did you imply that they were relevant to this discussion?

[G29Reload]

Originally Posted by WT

We sell China West Virginia coal for their steel making processes. WV coal is extra special compared to that dirty Montana and Wyoming coal. However, that coal is good enough for Chinese power plants.

Germany also wants WV coal. They are shutting down all their nuclear power plants and are looking at the Hatfield and McCoy families to help them out.

Japan loves our beef. So does Italy. Switzerland imports about half their food.

We don't have to buy German or Japanese cars. Computer factories could be re-started here in the USA. We still have chemical plants. WE export gasoline to other countries.

The US is a lot more independent than many people think.

this is true but balance of payments in the supply chain are the problem.

If inflation kicks in to high gear, imagine value changing daily, or several times a day.

You are producer x and have a commodity. That commodity is needed at the supermarket for people to eat. You put it freight on board expecting Y price for it.

By the time its handed over to a distributor to go to market 5 days later, its market value has gone up …50, 75%.

Have you taken payment up front? 2/10Net 30? payment on delivery? The product left your farm at one price and now its almost doubled. Meantime, you have to buy seed and pay laborers or whatever…at the NEW higher prices because everything else is skyrocketing too.

How about our military? Will our fighting men want to fight when their paychecks become worthless overnight?

And the food we have to give them…that is not made at some factory labeled Government Factory. Nor does it come from the PX fairy. We buy it on the open market. One aircraft carrier has 5000 guys on it, who eat 3 times a DAY, times 60 or 90 day deployments. We have one carrier now that is having maintainence and refueling delayed, and another having a cruise canceled. And we're not even at a crisis yet.

It is going to get BAD.

It will affect National Security.


Mark Levin floated an idea Friday night as to why Homeland security has 5 bullets for every American. They're just wargaming the likelihood of society unraveling.

The spark will come in the food chain. People have to eat before they can do anything else. We don't tolerate our kids starving in this country, but that's what will happen. The supply chain for food will be disrupted by a crisis in payments, loss of trust in the credit system and rampant inflation.

Our military will look down on a worthless paycheck and when its food supply gets disrupted it will get ugly.

If you're smart, you will stock a YEAR's supply of food at home. Everyone reading this message. I am not kidding. Food riots are not pretty.

[Z71bill]

Why does the world even need a reserve currency?

Lower the cost of / make it easier to trade between countries sure - why else?

It is not like without a reserve currency the world would stop turning.

What else am I missing?

[SouthernRaider]

Originally Posted by Z71bill

Why does the world even need a reserve currency?

Lower the cost of / make it easier to trade between countries sure - why else?

It is not like without a reserve currency the world would stop turning.

What else am I missing?

They appear to be setting up for a global currency.

Crash the dollar......set up the UN central bank

[certifiedfunds]

Originally Posted by G29Reload

this is true but balance of payments in the supply chain are the problem.

If inflation kicks in to high gear, imagine value changing daily, or several times a day.

You are producer x and have a commodity. That commodity is needed at the supermarket for people to eat. You put it freight on board expecting Y price for it.

By the time its handed over to a distributor to go to market 5 days later, its market value has gone up …50, 75%.

Have you taken payment up front? 2/10Net 30? payment on delivery? The product left your farm at one price and now its almost doubled. Meantime, you have to buy seed and pay laborers or whatever…at the NEW higher prices because everything else is skyrocketing too.

How about our military? Will our fighting men want to fight when their paychecks become worthless overnight?

And the food we have to give them…that is not made at some factory labeled Government Factory. Nor does it come from the PX fairy. We buy it on the open market. One aircraft carrier has 5000 guys on it, who eat 3 times a DAY, times 60 or 90 day deployments. We have one carrier now that is having maintainence and refueling delayed, and another having a cruise canceled. And we're not even at a crisis yet.

It is going to get BAD.

It will affect National Security.


Mark Levin floated an idea Friday night as to why Homeland security has 5 bullets for every American. They're just wargaming the likelihood of society unraveling.

The spark will come in the food chain. People have to eat before they can do anything else. We don't tolerate our kids starving in this country, but that's what will happen. The supply chain for food will be disrupted by a crisis in payments, loss of trust in the credit system and rampant inflation.

Our military will look down on a worthless paycheck and when its food supply gets disrupted it will get ugly.

If you're smart, you will stock a YEAR's supply of food at home. Everyone reading this message. I am not kidding. Food riots are not pretty.

I have no qualms about eating progressives if needed. There will be plenty of them lying around.

[G29Reload]

Originally Posted by certifiedfunds

I have no qualms about eating progressives if needed. There will be plenty of them lying around.

no cannibalism or rancid meat for me, thanks. Buzzards gotta eat too.

[certifiedfunds]

Originally Posted by G29Reload

no cannibalism or rancid meat for me, thanks. Buzzards gotta eat too.

I expect most of them to be very tender with good marbling. Some are vegetarians like rabbits and deer too.

Stock up on cajun injectors and marinades and learn to make a roux.

And there's always sausage.

[gommer]

It really depends on how long the US defaults on it's debt.

Think of it like not paying a credit card payment - then expand the consequences * 300 million ish. I completely pulled that number out of my rear but the point was it's going to hurt us all. Even the leaches who don't pay taxes.

What it would do, more than anything, is create mass civil unrest. Finally, FINALLY, all of the uneducated tax paying dimwits that voted this doofus into office would be forced to open their eyes and see... the emporer has no clothes.

Yes, they'd all try to blame it on the House again - like they always do, but holy crap - even liberals are getting sick of listening to that garbage. They know it, too.

So, what do I think would happen?

Well, I think it would get a stop-gap fix rather quickly. Consumer confidence would crash, stocks would crash, lending would halt, inflation would explode, and we'd be in the great depression - and we'd take the rest of the world on the ride with us.

Doom and gloom, I know - but that's really what would happen. Because if we did truly DEFAULT on our loans - it would show the whole world that our government is so broken it can't even pay it's own bills.

Which, shocker, it actually IS so broken it can't pay it's own bills.

Here's the real problem. These tools in Office, the lot of them not any particular party, have cried wolf on this type of thing for so long that the public is numb to it.

It wasn't that long ago that a million dollars in bad spending went under the journalistic microscope. Bush turned that million into a billion, and Obama turned the billion into a trillion.

We literally have become numb to the amount of money wasted by our government. It's tragic, really. People now talk about a trillion dollars like it's nothing. Just flows off the tongue.

Worse, the only problem our dear leader sees with 16 trillion dollars in debt is that he needs 20 more and the pesky peasants are getting in the way of his grand plan.

So, yes, if we did default all the doom and gloom you hear about is probably an understatement of what the real *human* impact of it would be. It would be a global disaster, truly.

Do I think it will happen? Not a chance. But, again, my sheeple mind has become numb because they talk about the end of our world every six months because these idiots can't run a government without Fear, Uncertainty, and Doubt. FUD. It's the way of all tyrannical governments.

[Z71bill]

This is not really possible - but just as a what if --

What if all of a sudden the government could not borrow any ADDITIONAL money.

So we would not default on existing debt - but would only be able to spend the amount that is collected in taxes.

We currently collect about $2.75 trillion - and spend about $3.75 trillion.

Consider cutting $85 billion (sequester) is seen as an absolute disaster - TEOTWAWKI by many - imagine a $1 trillion cut.


Post office will shut down - many hospitals would close (medicare payments would stop) - welfare checks - not today - anyone with a government contract would stop work - many school systems depend on the federal money to make teacher payroll - airports would shut down -

You get the idea.

Forget about a debt default - a forced balanced budget would cause riots in the streets.

[Atlas]

Was it last year that some bookkeeping error caused welfare payout in one local office to cease (in Georgia?) for a single day, and there was nearly a riot?

[JohnnyReb]

Originally Posted by Atlas

Was it last year that some bookkeeping error caused welfare payout in one local office to cease (in Georgia?) for a single day, and there was nearly a riot?

That's what happens when the checks stop.

[Atlas]

Originally Posted by JohnnyReb

That's what happens when the checks stop.

Social overhead..
It is quickly becoming unsustainable.

[farscott]

Corrected in the quote below.

That is why the delay in the payout of the Greek Law Bonds CDS was a big deal. The current ISDA Master Agreement calls for the settlement of the CDS (payout) ONE day after the "credit event" has been declared to have occurred. ISDA took their time in declaring the CDS has been triggered to allow the counterparties a chance to collect the necessary funds in an attempt to avert contagion. That action, combined with what happened to GM and Chrysler bondholders in their "bankruptcies", proved that loaning money to sovereigns and to companies "too big to fail" is much more risky than the coupons suggest. As someone who actually does loan money to the USG (I use TreasuryDirect) and at one time to GM, I was and am very concerned as some of my T-bond maturities are still 25-plus years in the future.

Just about everyone and everything depends upon money being where it is supposed to be exactly when it is supposed to be there. Small delays have large consequences for both people and markets. The 1979 USG default is an interesting story, especially how much it really cost the taxpayers in terms of more debt service due to higher rates.

Originally Posted by JohnnyReb

That's what happens when the checks are late.

[railfancwb]

Originally Posted by Big Bird

Please re-read what I posted and do some research. Japan has all three of those problems x 2 compared to the US. Their economy has limped along for nearly 20 years.

Japan isn't fighting multiple (how many? I lost count) wars and maintaining hundreds of bases around the world and almost a dozen carrier fleets and X boomers...


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[series1811]

Originally Posted by G29Reload

If you're smart, you will stock a YEAR's supply of food at home. Everyone reading this message. I am not kidding. Food riots are not pretty.

I've been trying to do this for a while. Everytime I go to the grocery store, I try and buy more than I need in long term storage food items, to put away. If I need it, I figure I am going to really need it. If it looks like magic fairy dust is going to fix everything, I will just eat it and save a little on groceries one day.