If Greece's currency colaspes

Sorry, but comparing Iceland to the US is like comparing a smart car to an 18 wheeler. What Iceland does does not matter to the world economy. The US is a driver of the world economy.

Bringing back US notes would simply be borrowing more money from the US people. It would also be inflationary. Why are you saying FRN would decline? Why would that have to happen? Since the Fed is a pseudo US institution, both monetary issues are US debt. You are just advocating forcing more debt onto the US population, since the world would be unwilling to loan to us. Also, issuing more currency when the economy would be shrinking by 10% per year would be HIGHLY inflationary. What you are calling for is what may happen, but it would be just another way to destroy any savings of the general public.

Debt is debt, and it will be paid back. Either scenario will entail confiscation of private property, either through taxation or through inflation.

 

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First of all, a US Note is not a debt and does not require repayment. It will also not be inflationary if it is issued, for example, in FDIC repayments because every US Note issued is in response to a FRN going out of existence with no net increase in money supply. Inflation is a product of an increase in money supply and not the type of money issued. It can happen with US Notes, FRNs and even gold so it is a non-issue here. I should have been clearer that I wasn’t saying that the FRNs would decrease in VALUE. They would decrease in NUMBER. Remember, under the Federal Reserve System the money is the debt and the debt is the money, and a default on the debt is a destruction of the money supply. So the value of FRNs may actually increase in a default because there will be a scramble to obtain them.

But people should read the list of horrors that you are writing because these are exactly the talismanic words that will be used to frighten people into giving the banks everything they want:

Confiscation of private property
Inflation
Destruction of savings
Dire consequences
Destroy working capital
Massive business closures
40% unemployment
Bank failures
FDIC failure

In practice, virtually all of this can be avoided if the political will exists. And it may not unless people demand it. The tools to do this are already well known. The bankers and their minions will be out in force threatening everything under the sun if they aren’t given what they want, which is virtually everything. I recognize how difficult it is to unlearn the things that were taught to you over many years, even if they happen to be untrue. People are taught that the way things are is the only way they can possibly be. Everyone needs to read these posts and decide for themselves if the talismanic words are true and that the banks need to be rescued at all costs; or if a fresh start is the way to go.

We will all soon be faced with this decision.

 

True enough Cloud. I never said anything about saving banks at all costs, I could care less about them. Losing access to working capital is my only concern, since most mid sized to small businesses cannot cash flow without this access.

Still confused about the currency. WHY would FRN have to decrease? The Fed can print money as much as it wants, and either of the notes are obligations, either of the US or of the Fed, (ultimately the US). Issuing more notes would not be neutral to inflation and effectively free money that you think it would be. It would be the exact same as the Fed just putting in 20% more currency in circulation in a weak economy, that is hyperinflationary.

I think for all of the doom and gloom you accuse others of painting, I think you are painting too rosy of a scenario for either outcome. To me, the best outcome is a little of everything, cutting back spending, raising taxes, inducing more inflation, to tame the debt. Paying it all back or defaulting both would be a severe shock to this country, "shock" meaning major recession at best, with depression very likely.

 

It is not my intent to paint a rosy picture. It is to enable people to think about this issue ahead of time, before the total media panic sets in so they can decide with a clear mind. It is also my intent to encourage people not to blindly accept what they will probably hear in the near future.

The “normal” way for FRNs [or their spendable electronic equivalent] to come into existence is through debt creation. Conversely, the normal way for the money supply to decrease is through debt repayment or default. The money is the debt and the debt is the money. You are correct that the Fed can issue more, but only if (1) the government borrows more or (2) the Fed purchases other assets. But I was only addressing the default.

Regarding the printing of money and hyperinflation, my comment was directed toward the situation of a debt default, which would be massively inflationary. In that situation, it makes no sense to issue more debt to increase the money supply, but it makes total sense to issue US Notes to stem the problem of a collapsing money supply. In that situation, the US Notes would not be inflationary.

 

Talk about long term corruption in China...

http://www.cnbc.com/id/43434622

 

No surprises there. I still think the PM's and food with be the better investments.

 

http://www.theglobeandmail.com/repo...tance-hasnt-chilled-investors/article2060163/

This is a good read, showing what works and doesn't work.

 

Seriously, take out references to communism and dates, and I don't think anyone could tell if this article was written in 2011, 1945, 1682, 1110, or year 16. All I have read about Chinese dynasties have the exact same reading.

Chinese economic readin is fascinating, though this exact same story reappears often. Commonly it appears more often near the end of a dynasty, where corruption excesses and gross political favoritism lead to change of dynasties.

Chris

 

Another one on the subject Cloud:

http://www.businessweek.com/news/20...-t-copy-icelandic-default-sigfusson-says.html

Iceland never defaulted on soveriegn debt like we have been talking here, they merely didn't bail out banks. I don't have a problem at all destroying shareholder value of any firm if they mess up, that risk has to remain in the marketplace to keep companies in line. You however were trying to equate this with defaulting on the USD, something completely different. I would never support walking away from US Treasury debt unless something drastic happens.

 

The situations are the same in that an action previously believed to be fatal to the continuation of a civilized society can turn out to be the best course of action. Iceland should be praised for standing up to the international bankers. I would never recommend defaulting on the dollar, but I think the time is approaching when the US will have to restructure the debt. It is the only compassionate course of actions. I know that in many circles it is believed that banks and corporations are more important than people, but I happen to believe the laws to charter banks and corporations were written to make life better for people. It would be the height of folly to make several hundred million people suffer for generations so that the elite 1% can continue to take home bonuses. And this is even more true when we now have a solution that has been tested in the real world.

 

But its not the same situation Cloud. The OP asked about Greece, not Iceland, and the Greek crisis is about sovereign debt, not bailing out banks. In the link I provided Iceland says their crisis is not the same as Greece. If Greece defaults on their debt, either they will seriously hurt the Euro, but instead I think they will be kicked out of the euro. This will enable the country to lower its drachma to inflate its way out, but hurting all of the pensioners and destroying savings. Bottom line, if greece cannot restructure their debt, (meaning payments and not forgiveness of debt), then I believe they are out of the Euro.

Concerning a situation like Iceland, I completely agree with you that the banks should not have been rescued by the government, any more than our banks and car companies were. The only difference is our government policy led to a lot of the banks bad policies, (Fannie and Freddie), so our politicians were greatly to blame for the crisis to begin with.

 

The situations are the same for those who can see it. In both situations, the objective of the international bankers is to saddle the people of a specific country with debt repayments that they are unable to make without enormous suffering. This should be the problem of the creditors, not the people. Every bank, investment firm, or pension fund purchased Greek debt after performing a credit analysis that would have informed them that the risk was high that there would be a loss. Well, the loss is here. Any pension fund that is loaded with Greek debt at this point is probably guilty of a crime. And if Greece suffers inflation as a result of reviving the drachma, that is preferable to permanent debt servitude. It isn't possible for Greece to come out of this without pain, but I would put the pain on the creditors where it legally belongs when they make bad loans. You are making the argument that many people should suffer so that a few institutions can profit. I don't think that way. Greece will be better off in the long run out of the Euro, IMF, World Bank, etc. so the people of Greece can decide how to run their economy instead of Brussels and Basel. Surely a nation still has the right of self-governance!?!

 

So do you blame the homeowner for being burglarized because he had too good of stuff? Are you saying the credit card companies are to blame for millions of Americans being irresponsible with debt?

I have done risk analysis Cloud, and its not a morality tale. Its analyzing the risk the debt will not be paid back. Greece is not an innocent victim, they are like a 21 year old with a credit card, living the high life and living beyond thier means for decades. Look at the percentage of public employment, look at benefits given, look at number of paid holidays. Everything about that country shows you they were willfully living beyond their means. International bankers and "pension funds" were not pushing money down their throat, Greece went into the market ASKING to borrow more and more money.

Blaming the Greek debt on lenders to me is offensive. The guilty parties are the leaders of, and by extension the people of, Greece, no one else.

 

If the Euro collapses relatively soon, the $$ will benefit greatly and while that will hurt the price of silver and gold, it will make things a lot cheaper for the US, for a while. However, the ugly part of that is that Bernanke's game will be up. The increase in valuation of bucky will also mean that our debts and deficits are worth more in terms of real buying power while, at best, we will hope that tax revenues will remain flat but will most likely decline. That adds up to a US default at an even faster pace, which should make the gold and silver price go back through the roof.

At least..that's my theory. :smile

 

Actually Goldman Sachs being accused of enabling Greece politicians (who have a revolving door to cushy finance industry jobs) to hide billions in budget deficits by running off the book bond sales which the bank profited handsomely from. Now that this house of cards is falling apart, the taxpayers of Greece are being asked to backstop these billionaires who caused this mess. I say throw these politicians out of office and let the bond holders go to Goldman to get their money back. No way that old pensioners should have to give up their pensions to protect these multi-billionaires.

This in effect was the same sort of scheme cooked up in Iceland where the bankers essentially with the aid of the central bank, hocked the Krona until it was worthless unless the taxpayers signed up for a generations of servitude to the IMF and the western banking cartel. Instead, they let the currency collapse, and now they are doing fine. It's the only country in the world that isn't living with unsustainable debt. Oh, and they threw their banksters in jail instead of bailing them out.

 

Your analogies are invalid. That said, when you say that "Greece is not an innocent victim..." you miss the point that "Greece" is an abstraction as far as debt levels are concerned. It would be like blaming YOU for the US debt level, when in reality there isn't anything you can do about it. It will be your childern and grandchildren who sufffer for backroom deals between lenders and the political leaders who create indentured servants out of entire populations of people born and unborn. Read "confessions of an economic hit man" by John Perkins and you will understand the game better.

I have also done risk analysis on credit insurance products, and I know that losses can be forcasted with accuracy within $0.02 per $100 of the amount loaned. So I won't let these lenders off the hook as easily as you do. They were counting on the IMF being able to cram draconian cuts in living standards down the throats of people and have been surprised to find that there is a limit. CREDITORS SHOULD ABSOLUTELY TAKE THE HIT FOR THE BAD LOANS AND THE PEOPLE SHOULD HAVE A FRESH START. WHETHER OR NOT THE CREDITORS DECIDE TO LEND AGAIN IS THEIR CHOICE, BUT ONE GROUP OF PEOPLE SHOULD NOT BE RESPONSIBLE FOR THE CRIMINAL BEHAVIOR OF THE RULING CLASS. And I am also offended by the thought that people should suffer so that lenders can profit.

Edit: Anyway, there is enough posted on this topic for people to do their own research and determine whether or not they, their childern and grandchildren are guilty of borrowing what they cannot repay and should therefore suffer for generations, or whether there is something underhanded about the public/private partnerships between governments and international bankers to profit regardless of the suffering of others. And anyone who wishes may post their own ideas on the topic. My work is done here.

 

Nice summary. People are very slow to understand the swindle being run against country after country and imagine that what is going on is somehow related to the irresponsibility of the borrowers rather than a complex con run by the lenders.

 

I don't see how any government can control the price of precious metals.
Unless they are the ones digging it out of the ground then they have no influence.It's a supply and demand thing and mining companies will always sell to the highest bidder.
I could where a government would try to set a minimum price if they reverted to currency backed by gold but I don't think they would suceed as the metal would soon be bought and sold where ever it was cheapest.

 

All it would take is the CME raising margin requirements to 100% to run most every speculator out of silver. Gold is not as easy to manipulate, but it will follow silver to some degree. At some point the concentrated short positions will not be able to hold the beachball underwater any longer, and free market forces should take over. With all the tricks available, this could be a while off yet.

I agree, and think this is true of every nation. Many international entities are an attack on national sovereignty, and the ones in Basel are arguably the worst in that regard. A nation's right to self-governance goes hand in hand with individual liberties, or rather one cannot exist without the other. Yet most every western goverment's 'national' central bank leaders are members of the Basel Bank for International Settlements which has no national oversight or accountability. Greece may be the current focal point, but it's far from the source of the problem. Gerald Celente is predicting Europe to follow in the footsteps of the MENA region which would bolster the fear trade in PM's.

 

http://www.martinarmstrong.org/files/Greece 06-16-2011.pdf