Our USD system is just about to collapse.

[jtabeb]

Re: Our USD system is just about to collapse.

I read the quote you posted from Laird as talking more about currency than system. Judging strictly from the portion you quoted, I still think he's talking about a big change in currency value -- doesn't even mention the different categories of system to which you refer. I think your position is more nuanced, but you are reading greater sophistication into Laird's words than is actually there. Anyway, if Laird were really talking about a collapse of our market, government, economic, and real estate systems, that's hard to square with the idea that one could buy a very nice house for one gold coin. At the point where those systems undergo a collapse worthy of the name, I'm not sure one is "buying" anything.

Well this is what I am talking about (and if I may, what I think Laird means)

http://jessescrossroadscafe.blogspot...-bond-and.html

13 MAY 2009

Fiscal Meltdown Will Test the Bond and the Dollar to the Breaking Point

Don't blame the Democrats alone for this. Instead blame a political system that is corrupted by Wall Street and lobbyist money, and a mainstream media dominated by four corporations feeding a stream of managed news and perception spin to gullible US households.

The day of reckoning is nearly at hand, in which the currency crisis in the US will shake the financial foundations of the global economy.

"Outlays are rising at 17% YOY the fastest nominal pace since late 1981. With receipts falling 14.6% YOY their fastest drop in at least 40 years the gap between their growth rates is also the widest in the record.

All these rates are accelerating and are threatening to push the deficit to more than 50% of receipts and - at $1.1 trillion and rising - to more than 10% of private GDP."
Thanks to Sean Corrigan at Diapason Trading for this chart.
POSTED BY JESSE AT 10:20 AM

[ThePythonicCow]

Re: Our USD system is just about to collapse.

Chris Laird has too little sense of humor for my taste. No wonder people don't enjoy his cocktail hour conversation ;).

As ASH noted above in his response to jtabeb, Laird's thinking is not that nuanced.

By Laird's own comments, he spent 3 years getting Oracle certification -- that's a demanding test with a zillion details. Only those with a compulsion to build an impregnable position have the stomach for that effort. And few with such a stomach have the wits to match. Unfortunately for Laird, that position fell after 2 years of earnings, to Indian and Chinese competition (the same competition I spent the last several years of my computer software career working with, not against, to our mutual advantage.)

So he switched positions hard to the position that paper money loses to gold, and is now building his impregnable position there.

He's the Mogambu Guru, after an unfortunate stroke costs The Magnificant Mogambu Guru (TMMG) his entire Wicked Sense Of Humor (WSOH).

All inputs are seen by Mr. Laird as ammunition and shields for his use, or threats to be dismantled and dismissed.

[ThePythonicCow]

Re: Our USD system is just about to collapse.

Well this is what I am talking about (and if I may, what I think Laird means)

Yes, Chris Laird's warnings have merit. Matters surely are going to h*ll in a handbasket. And the repo guy is about to take the handbasket from us for missed payments.

But I'd rather listen to EJ than Laird. EJ might ignore Taleb's advice and wear a tie, but he still has a gentle sense of his own limitations. EJ has been right longer, and when the next violent twist to this saga unfolds, has a better chance of continuing to be right. Laird will get derrailed once again.

[Tybee Island]

Re: Our USD system is just about to collapse.

It seems that a great amount of confluence from several sources on the same warning: Sinclair, Armstrong, Russell, Laird, Jesse, among others.

Only from an intuitive position, something seems afoot. 180 degree turns coming from the administration in recent days seems to signal a genuine lack of conviction.

China seems far more vocal then I can ever remember in making its displeasure known with the Fed's and Treasury's experiments.

We are strapped in here and ready for what comes.

[Willette]

Re: Our USD system is just about to collapse.

Yeah, my Y2K investment in ammo is finally paying off! {grin}

[rjwjr]

Re: Our USD system is just about to collapse.

Yeah, my Y2K investment in ammo is finally paying off! {grin}

Uh oh...ammo bubble?! How come EJ didn't see this one coming?

[Willette]

Re: Our USD system is just about to collapse.

I like what Laird wrote, but I think he too is vulnerable to "the illusions of hope". We who own gold coins might like to think that one day a coin will buy a house, but that would imply that government would not try to get in the way of such a massive revaluation of assets, or would just allow it to happen. But in reality, they have fought it all the way.

The fundamental reality is that ownership of the world's productive assets is being concentrated in fewer and fewer hands by means of indirect corporate ownership. That tiny, one-in-a-million Superclass is working toward political as well as economic consolidation - the New World Order.

Today, we are seeing the demolition of social stability and economic security in countries around the world, even the largest and most powerful. This is being permitted so as to create so much fear, suffering and insecurity in the world population that they will ultimately see world government as the solution to their problems - QED!

The world reserve fiat currency franchise is in the process of being removed from the USA as it completely discredits itself, only to be vested in some international institution (BIS?) at some future date. There will ultimately be some sort of massive system reset, and the New World Order of Transnational Global Governance will be the new proprietors of a new fiat money system whereby they can skim the cream from the entire world economy.

Tremendous gains in gold purchasing power implies that government power must be massively liquidated and ownership of productive assets decentralized again. That is not happening - things are going the other way at an increasing pace.

Government power (military force) trumps economic forces every time - economics is a lodger in the house of politics. This is why Patrick Henry said, " If we wish to be free we must fight! . . . I repeat it, sir, we must fight! An appeal to arms and to the God of Hosts is all that is left us!"

Americans have weapons, but are not mentally prepared to fight, and have not yet even figured out how to do so effectively. We've been waiting for decades for them to come and try to pry the guns from our cold dead fingers, but meanwhile they have been steadily increasing the fine webwork of regulation and control that enslaves us while simultaneously stealing our wealth. People own guns, but they are totally intimidated by any agent of government, even a dog catcher.

PS - Recent Tea Part protesters were routinely 1) Asking permission from government to have their little protests 2) Being denied permission to dump brewed tea into waterways because it is deemed (by government) to be pollution. So they were using plain water. What a joke!!!! Read about the original Boston tea party. Nobody asked the permission of the British, and the local authorities knew that it would not be healthy for them to attempt to interfere. 45 TONS of tea were dumped in the harbor. Now THAT was a protest that meant something.

[thunderdownunder]

Re: Our USD system is just about to collapse.

I would like to say that Ive seen a few downturns in my time. Yes we survived them even the bad ones in 72 and that nasty one in 90-91 but Ive never seen one like this creeping avalanche. The World is scared ! Looking at what has transpired so far in a very short period of time makes me want to put it in point form.
> never before have I seen all nations "called" to man all the pumps and inflate their economies in such an urgent and immeadiate way.
> Never before have I seen budgets expanded so grossly that even countries who were prudent and had surplus monies go into decades of debt
> Never before have I heard of debts being "conservative" at 80-110% of a countries GDP
> Never have US German & British banks "lost" literally decades of profits in a single year.
> Ive never witnessed a deflation spiral so sharp happen so quickly to so many G6 countries
> Never heard of longstanding and great manufacturing nations suffering such heavy falls in exports in such a widespread way.
> Never seen once great world companies such as GM, listed as "penny dreadfuls". GM has seen & survived even the 29-34 and now ......
> Never concidered Great financial countries would lower themselves to mention "quantitive easing" let alone do it and join the ranks of past failed and failing dictatorships
> Ive never seen prudent people forced into slavery debt while in a democracy
> Never seen so many mutiple financial firestorms in so many countries all at the same time. Long Term Capitial now looks like a match strike in comparision.
> Never seen interest rates set below cost almost universally around the globe.

So I looked for what went so wrong that normal sane & generally prudent nations did things that broke all the excepted norms and conventions.

I found it - the fatal error, the flaw.

Its the Fractional Banking System and the kryptonite that kills it vs the blood that feeds it
the kryptonite is Deflation, its life blood is inflation.
If deflation goes world wide and deeply through hard and real assets the amount of money needed to "turn" the motor of the FBS will be vaporised.
Fuel starvation we have now and the motor is dying. If deflatation hits 8-10% world wide the motor will implode and all bets are off.
Why 8-10% - its an educated guess based on the FBS gearing.
Its not The US system, its the World system and I'm hopeless at bartering so we hope they can find enough fuel to ignite this sucker -hang the expense.
Disclaimer - I'm joe six pack when it comes to economics - not very bright at all. But even this dumb ass can see a perpetual motion through inflation requires more and more fuel as it climbs that exponential curve of debt.
Y axis = X axis squared must eventually collapse under the weight of debt.
"May you live in interesting times"

[Willette]

Re: Our USD system is just about to collapse.

Fuel starvation we have now and the motor is dying. If deflatation hits 8-10% world wide the motor will implode and all bets are off.
Why 8-10% - its an educated guess based on the FBS gearing.
Its not The US system, its the World system and I'm hopeless at bartering so we hope they can find enough fuel to ignite this sucker -hang the expense.

Thunderdownunder, this is like playing double-up-and-catch-up at a rigged casino - no matter how much "fuel" you have, you'll lose it all unless you LEAVE THE TABLE. Why go deeper in debt, only to prolong the agony while fixing nothing? People need to get some courage to deal with the fallout of this fiasco, not keep trying to reinflate the burst balloon.

[jtabeb]

Re: Our USD system is just about to collapse.

Its not The US system, its the World system

I stand corrected.

(You seem to have mastered concepts that exceed the grasp of our most learned financial luminaries, me thinks you "get it". No need to cut yourself down for that)

[btattoo]

Re: Our USD system is just about to collapse.

I'm researching now the societal impact of Spain's fall from world power from the 1600s on to see if there are any insights. It is an interesting example because Spain at its peak exhibited many of the characteristics of the US at its peak: wealthiest nation, top 5 in population, feared military, de facto reserve currency (as gold WAS money and Spain had all the gold).

Too early to draw conclusions, but the rise and fall of Spain: 100 years to the top, then 100 years to the bottom - wasn't that quick.

There are some compelling parallels. The armada was defeated by wind in 1588 and Cervantes published Don Quixote in 1605. Don't the people refusing to acknowledge that this system is absurdly broken seem exactly like Quixote?

[thunderdownunder]

Re: Our USD system is just about to collapse.

Sometimes it works best if you keep it simple.
These two articles helped me understand, in words I could understand.
First read

http://www.lewrockwell.com/rothbard/frb.html

then

http://www.survival.org.au/growth.php

This leads me to the conclusion that WAR or population based ANARCHY on a world scale is a solution. This destroys assets and population and consumes vast resources in "aftermath" renewal/rebuilding. This is what all history shows as a guide to the future.
or
World population must decline through other means. Starvation or wide spread desease. History again is a guide - Anarchy again ensues
or
The World reverses direction back to basic survival mode where all citizens work to live and support each other without measures of wealth in clusters bartering between groups. This can never work until all humans are devoid of the seven deadly sins. The book -Animal Farm shows the outcome - back to Anarchy.

This might sound frightening but if we continue along the path we are following allowing ever increasing debt/consumption by ever increasing population then each day we come closer to "critical mass" by exhausting FINITE reserves of productive land ,clean water, clean air minerals,energy,food ecosystems ect.
The movie 'Solent Green' (Charlton Heston Edward G Robinson) probably is unknown to many people but do yourself a great favour and view it,you won't be sorry - its food for thought (and discussion by those who think) Probably this movie should be place on Rant and rave or attached to PaNu disscussion as the opening 2 minutes will make you complete your education on what may come to pass.

http://video.google.com/videoplay?do...55071179146825

Old school is the best school you have

Shock and awe was a pussy - anarchy rules Ok

[rabot10]

Re: Our USD system is just about to collapse.

Is there something you would like to share with us Ash?

I believe there are support groups for that kind of thing.
;)

I like to watch

[Guest]

Re: Our USD system is just about to collapse.

Chris Laird is definitely on the "goldbuggy side" and I take all his articles with a very liberal pinch of salt. Whether this vaults him it into the gold-buggery awards is another question. The normally very straight-arrow ASH making a rare foray into impertinence here.

[shiny!]

Re: Our USD system is just about to collapse.

The movie 'Solent Green' (Charlton Heston Edward G Robinson) probably is unknown to many people but do yourself a great favour and view it,you won't be sorry - its food for thought

But... It's PEOPLE!