If Greece's currency colaspes

Such a complex issue is surely not a simple either/or proposition. It's obvious US culture is to borrow too much money. You can see this at the personal level all the way to the Federal level. No doubt corrupt bankers and politicians exacerbate the problem severely. But people also want their entitlements and massive military and don't want to pay for them. The demographics of Social Security and Medicare are obviously going to cause failure if we don't change. We shouldn't be in 3 useless wars if we want a balanced budget, as well.

You seem to be playing the classic leftist canard that "it's all the evil rich" fault. Even if you are right, the politicians are generally synonymous with the corporate/bank elites and I really don't see how it makes it better. But the "evil rich" don't force Americans to live well above their means at a personal level. I am with medoraman on this. Also, looking at history, debt defaults can have very bad effects in society. (see Weimar Germany) There is no get out of jail free card. We should close tax loopholes and severely cut spending.

 

Log in or Sign up to hide this ad.

Well said !! The sooner we inflate or default out dept away and stick it to the greedy bankers, the sooner we can go back to living the American dream... all the political spooky stuff that will be poored over you in the media is nothing more than buying time for the bankers and politicans to collect more of your money.

 

I fully disagree in SPADES ! Put it to a vote, I for one will eat mustard and crackers for 5 years to ensure my children have a shot at the American dream. Almost all national defaults clear themselves in a much shorter period of time. It's a no brainer, just a matter of how long and deeply the public will allow the Fed & politicians to "work" them over with no lube.

 

The Fed is Private, make no mistake there are private individuals who reap insainly HUGE (trillions) sums of money from the institution over time, and who get bailed out at the US taxpayer's expense if thier wild speculations don't pan out like they expected them to.... and you think we should continue to support that process at the expense of our children and the American dream ? Blow it up, eat mustard and crackers for a couple years, then start over as a dept free nation..... it's that easy, US people just need to get the balls to force thier bank puppet politicans to do it.

 

I don't get all this "oh where will we get working capital from" thing. From what I know it's the BIG banks that got the bail outs and are still exposed due to thier speculation and greed. I know a CFO at a good sized regional bank and one at a local bank,, when I asked them if they got bailed out as a joke they smiled, said no, and both said they have too much capital and don't know what to do with it. Sounds to me like the "local" economy and banks could have AND SHOULD have been allowed to step in and buy the big banks...... but that would never have been allowed, you see the BIG banks are owned by FOREIGN folks and the local banks are owned by US folks... now think about that for a bit.

 

I don't know much about Greece et al., but I wanted to chime in and correct this. U.S. Notes are precisely debt owed by the U.S. Treasury--they're little pocket-sized pieces of the national debt. Indeed, in the post-Civil War era, the USNs made up a substantial fraction of the whole federal debt, so that they became a major political football, with the rich wanting them abolished (deflationary) and the populists wanting their issue expanded (inflationary).

The upshot of that debate was that the outstanding amount of USNs was fixed at a specific number in the neighborhood of $320 million. At the time, that number was sizable compared to the whole national debt. Fast-forward to the 1960s: that same cap was still in effect, but it was by then a negligible sliver, both of the debt, and of the currency in circulation. That's why the USNs were finally done away with--they had become pointless, a few tiny droplets in a sea of FRNs and Treasury bonds.

Bringing back USNs and substituting them one-for-one for FRNs would result in no net change to the government's debt (since FRNs are in practice backed by Treasury securities anyway), or even to the government's expenses for debt service (since interest paid to the Fed winds up back in the Treasury anyway). But it *would* put monetary policy back under direct political control, which probably isn't a good thing for the economy....

 

This situation may also provide insight as to why a universal money program can't work, this includes a cashless society. One which works from a credit/debit card system. Do you want to be responsible for every nations debt? Even your enemies? Or give the power of the world to one central bank who could dictate to you what they want and control your means to exist. The love of money is the root of all evil and mankind is the plant that root nurtures. You can not name anything in the world or known universe, that is consciously or unconsciously more evil than a man. Create a single monetary system and he will work at gaining his control over it or destroy it if he can't. IMHO.

 

Interesting line of thinking on the USN's, Numbers. I don't think they would be able solve the inherent problems of fiat currency though.

In my opinion, the whole point of this fiat experiment was to be able to provide the solution of a global monetary system and pave the way for global governance which would be the ideal situation for a universal money program and a cashless society. Failure of this system leads into implementation another one, by design, not incompetence as is often purported. Technically, we are already all under a single central bank anyway, the Basel BIS. Keeping physical gold and silver is one of the ways to help ensure you remain as free as possible. Also, sorry to split hairs, but it's the love of money that is the root of all evil. Money is just a thing. You wouldn't be afraid to keep it under your mattress would you?

 

InfleXion;

Thank you for that correction. I have edited it accordingly.

 

I've been corrected on that myself in the past, so it stuck with me!

 

As long as your mind is stuck in the left-right paradigm, it won't be possible to understand the "game" being played. This has nothing to do with "leftist" or "evil rich." It isn't even a cultural thing. In my lifetime I recall when the vast majority saw all debt other than mortgage debt as something to be avoided. And I would argue that Weimar Germany didn't suffer because they defaulted on their debt, but because they did not do it soon enough and instead attempted to pay it. Entitlements are no doubt a problem, but I would first stop fighting the 5 conflicts/military occupations underway [Libya, Yeman, Iraq, Pakistan, Afghanistan], exit NATO, and close most overseas military bases in the 190 countries where they exist -- and only after that decide how much needs to be trimmed from entitlements by raising eligibility age, means testing, or whatever. It is all a matter of deciding whether citizens are more important than the empire, or the other way around.

See, now you made me post again to this thread .

 

The comparison is irrelevant to today's situation. The old greenbacks were debt because there was a promise to eventually redeem them. If they were reissued today, there would most likely be no redemption - they would just be money and would eliminate the need for the federal government to issue debt securities [i.e., debt-free money]. Of course they would be inflationary if over-issued, just like every other form of currency including gold. As long as US Notes were declared valid for payment of taxes equal to FRNs, they would have equal value. And regarding political control, this is something the people would have to decide. Is it easier and more desirable to have a huge national debt and a currency controlled by an unaccountable Federal Reserve; or is it more desirable to have no debt and a currency controlled by a political class that must stand for election?

 

These 2 statements make no sense together. It IS a cultural thing for most people to buy too much house, too much car, and run an average of 8-9k credit card debt. You blame that on the banks and those "playing the game" too somehow?

Also, how is Yemen a war that we are involved in? I agree that useless foreign wars need to end, but I don't see us bombing Yemen.

 

We'll have to agree to disagree. The easy availability of credit is a lender decision and a fairly recent development in the US. You don't have to go back very far to reach a time when things like no-doc loans and mailing credit cards to people with no income would not have happened.

Regarding Yemen, http://www.foxnews.com/politics/2011/06/08/report-us-steps-up-covert-strikes-in-yemen/

 

I guess we will disagree...you see I believe in personal responsibility. A dying concept to be sure.

 

The Fed is "private" in a legal sense, but every penny in profit and seignorage gets remitted to the US Treasury. It is an old wives tale that "members" of the Fed keep the profits. I have seen the books and traced the remittances.

 

Ok, did you talk to your friends about how much they would have to lend if their balabce sheets were destroyed by a Fed default? Most banks keep sizable amounts in Fed instruments, and without that money would have zero to lend. That is the assumption I have already made, since I know operations in most banks. Take away their Fed instrument balance, and working capitol lending ability disappears, and with no working capital access millions of small to mid sized business jobs disappear.

 

No, you believe in collectivism and collective responsibility. There is nothing remotely related to personal responsibility involved with the national debt.

 

I believe in both. You were saying it's bank's fault that people spend too much on their credit cards and buy too many cars/too big of houses. This is absurd, sorry.

 

To me, it is "national" personal responsibility. Whose debt is it Cloud? Is it China's? Russia's? Germany's? No, it is ALL AMERICANS debt. It is just as much your debt as mine, or the social security recipient, or the soldier, or the welfare receiving person. Trying to say "its not PERSONALLY mine" is an insult. Even if you NEVER voted for a politician who spent way too much money, you are a citizen of a nation that had borrowed trillions on your behalf. Even if you did not agree, it was borrowed on your behalf. You have benefited, your parents have received social security and medicare, you have had national defense paid, etc etc. You may disagree with the debt, as I vehemously do, but your future has been mortgaged along with everyone elses by our elected officials. To me, for any American to claim that its not his "personal" debt is insulting since you are saying other Americans other than yourself should pay. Or are you saying its the person who bought the treasury notes fault that our politicians have spent like drunken teenagers? I own some Treasuries Cloud. Am I the problem? Should the US have just been prohibited from borrowing money during WWII? No? Then what debt would YOU approve of and would be willing to pay?

Doesn't matter, what will most likely happen will simply be a dollar devaluation, and stealing money from those who actually save, those idiots. They rightfully should be punished.