If Greece's currency colaspes

Exactly and there hasn't been a run on any bank since the 1930s. A real bank run is when a bank can't hand out currency to its depositors and they are left holding nothing. No depositor in the USA has this concern because the FDIC and other agencies, backed by the Federal Reserve, will create the money and hand it to them. All dollars these days are issued by the Federal Reserve. They have a 100% monopoly on all US currency. If you can provide an example where this isn't the case, the please provide it.

(Yes I realize the USA can directly issue dollars as the authority is still there. However they have not done so since 1971.)

 

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What is keeping them from printing 60 trillion dollars? It's well within their power. The point being that central banks can create as much money as they like. The net worth of these banks is $0. and they don't care because money is meaningless to them. They can create it out of thin air. It's their control over the currency however that gives them the power to control real assets. This is what they are interested in and it doesn't matter to them if they are printing $100 notes or $100 Trillion notes. Forgetting the obvious in that eventually the people will either rise up in revolution and over throw the system or major wars break out.

You don't have to look too far back for real examples as this demonstrates from 2009.

 

Can one country have a big effect on these sensitive markets, the answer is most
Certainly yes, i was in the A/C business for over 25 years back in 1989 japan dumped
Millions of pounds of Copper on the market which sent the price from $2,50 a pound
For "BRIGHT AND SHINY" to .45 cents a pound overnight!

 

.... we do, welcome to reality. What'cha gonna do about it ?

...... give it a try and see how long you last on the big blue marble. It's been tried before, and the leaders of such efforts are no longer with us.

... banks devalue thier own money on purpose, they get it back and then some via the interest charges... just like the direct bail out in recent past, they get thiers and the US taxpayer gets nothing but devalued money and more taxes to pay for either the interest or the direct lump sum payment to the bankers.

Assuming you do have a good handle on things, it amazes me that you post this stuff. BTW, how long have you worked for the Fed ?

 

This is a misrepresentation of what I said and completely wrong. First of all, unfunded liabilities are NOT bank debt and have no impact on the banks. It is an issue that will have to be addressed through increases in age requirements, higher taxes, etc... but is not part of the national debt problem. I know it is fun to add the two together to make the problem seem more gigantic than it is, but it is deceptive and everyone should realize this.

Apparently you prefer to pay the debt through destruction of the value of the currency, and this may ultimately be the course of action. But what everyone should understand is that you have a bias toward harming people and rewarding banks out of some form of misplaced guilt. At least some of us hold the opposite opinion, especially when there are perfectly good options that preserve the standard of living of ordinary people.

 

Nobody I ever voted for got elected, and I vote as much as I am able to. It all sounds good in theory, but when the vast majority of the 2 party system are either members of the CFR, Skull and Bones, the Bilderberg group, or some level of the masonic lodges it just boils down to false choices. Opting out is not an option for me. I was born and raised in the US, and I'm not going to let the last (supposed) bastion of freedom in the world fall away on my watch. To say we can do anything we like collectively, I don't see that as realistic from within the confines of the 2 party paradigm. I haven't seen politicians do the will of the people for as long as I've been alive. IMO politicians are not stupid, they are financed and controlled by the very corporate bankers that benefit from their policies, and incompetence is just an excuse to keep people from realizing the real agenda. Sure, a lot of people are lazy and want a free handout, and if we were all personally responsible the nation wouldn't be in this situation, but that doesn't undermine what I've said, it just adds to the pile.

Also, the Constitution is the only reason we've survived as long as we have as a nation. To propose amending it so readily is downright scary from the standpoint of wanting to preserve liberty. Yes, it has happened before, and it's not necessarily always a bad thing, but in the current political climate I don't want anybody touching it. I'd be happy just to see it enforced as it is. Instead of law enforcement, what we get is proven "unintentional" market manipulation by JPM and Goldman Sachs so they just get a fine that amounts to a drop in the bucket compared to what they made off with. Never criminal prosecution. They turn around and use their money to short silver, lobby to get our tax dollars, and make sure people who are congenial to their agenda mudsling back and forth pretending to be on opposite sides of the false Republican/Democrat fence so that it turns into a match where people pick sides based on matters of relevant insignificance, and anybody else gets pushed out of the limelight. When was the last time foreign or monetary policy changed?

 

I do not disagree with you sir that these are all problems. I haven't voted "for" a President in my life, my votes were all basically against someone else. I am with most people on this board disgusted by US spending and debt.

Lets turn this around and look at Greece. Looking at them and seeing how many holidays they get paid for, how much public employees make, how little tax enforcement there is, how much public graft, do you really view the citizens of Greece harmless of the debt their country has acquired? Theirs is almost all domestic over spending, very little went for foreign aid or military. So, the people of Greece, who received free healthcare, large numbers of paid for holidays, generous government pensions, etc, you do not feel are in any way responsible for their government's debt?

If not, sign me up. I will take all of the free handouts the government will give me, knowing we just need to declare bankruptcy every decade or so to start the process over.

 

If I pay you with a bank draft/check - I am paying you with dollars but I am not paying you with FRNs. I am basically assigning part the debt my bank owes me to you.

 

Ultimately and on a basic level you are correct. The citizens of a nation are responsible for it's well being. It's just that the odds are stacked against them, and every step of the way they are offered another poison apple. The problem is far from isolated to Greece. It's unfortunate that the average person in the world can be so easily outwitted to their own detriment, because they aren't willing or able to overcome the inherent challenges in our human nature. I can't really do anything about that, but I can expose the poison apple buffet.

 

You are word smithing. You didn't pay me in dollars. You paid me with a piece of paper that gives me authority to remove federal reserve dollars from your account at a federal reserve bank.

If I refused to take your check and told you to bring cash, your only alternative is to bring federal reserve notes.

 

This is the Greek Money Crisis summed up by John Stewart. It's pretty much on the mark as to why it should matter to Americans.

http://www.zerohedge.com/article/jon-stewart-explains-greek-crisis-great-unwashed

 

You are wordsmithing a little too Fatima. Just because FRN are the majority, there still are coins and US notes still in circulation. Justafarmer is pointing that out. The account, also, is not at a Federal Reserve Bank, his account is at a local bank who uses the Fed to clear payments drawn on it and other banks. Your wordsmithing is too far into saying the Fed is the only Financial institution in the US. That is not true, and FRN are not the only currency, just the most common.

 

Indeed I was wordsmithing. That was an appropriate response to what was being argued.

I've already addressed US Notes and others above. All obligations on non-FRNs have been nullified and none have been issued since 1971. What notes remain have a numismatic value far in excess of their face value so effectively these don't count. However the stubborn person can deposit them in a Federal Reserve Banks and they will be destroyed and when you withdraw your funds, you will be given FRNs.

My response on this matter is to dispel the statements that all dollars are debts on the US Treasury. They are not. They are debts on the Federal Reserve Bank.

 

With no banks there is no economy, there are no jobs. In 2008, lending dried up. A full US default would make this recession look like a picnic.

 

Yeah, the folks in Iceland died by the tens of thousands, plague set in, families ate thier children, 95% of all standing structures were burned to the ground as they were used for firewood to stay warm,,,, horrible. We must continue and deepen the Fed dept cycle at all costs, I just can't stand the thought of it.

 

But did Iceland default on their debt? No. Iceland keeps getting brought up, and that is not the discussion to me. I disagreed with most of our bailouts, and I agree with Iceland in them not bailing out their banks, and I believe Ireland made a mistake bailing theirs out. Given a certain backdrop, bank failures can be healthy as it will instill market discipline in the survivors.

What we are talking about is countries defaulting on their own debts. That is different than not rescuing a failing bank or two. Banks get brought into the discussion by Cloud since he says they are the cause of the debt. I am simply saying sovereign default is irresponsible of the nation since they borrowed the money and spent it predominantly on social welfare. A US default would basically destroy all US banks, and many foreign ones, since US debt is so pervasive that most banks hold it as "safe" investments. Destroying this capital will lead to widespread bank failures do to their capital ration being destroyed, which due to loaning of working capital, widespread failures of hundreds of thousands of businesses and millions of jobs.

I hope that reset the discussion. If not, no real point in "internet screaming".

Chris

 

That's one view. Here is another...

Amazon.com Review
John Perkins started and stopped writing Confessions of an Economic Hit Man four times over 20 years. He says he was threatened and bribed in an effort to kill the project, but after 9/11 he finally decided to go through with this expose of his former professional life. Perkins, a former chief economist at Boston strategic-consulting firm Chas. T. Main, says he was an "economic hit man" for 10 years, helping U.S. intelligence agencies and multinationals cajole and blackmail foreign leaders into serving U.S. foreign policy and awarding lucrative contracts to American business. "Economic hit men (EHMs) are highly paid professionals who cheat countries around the globe out of trillions of dollars," Perkins writes. Confessions of an Economic Hit Man is an extraordinary and gripping tale of intrigue and dark machinations. Think John Le Carré, except it's a true story.
Perkins writes that his economic projections cooked the books Enron-style to convince foreign governments to accept billions of dollars of loans from the World Bank and other institutions to build dams, airports, electric grids, and other infrastructure he knew they couldn't afford. The loans were given on condition that construction and engineering contracts went to U.S. companies. Often, the money would simply be transferred from one bank account in Washington, D.C., to another one in New York or San Francisco. The deals were smoothed over with bribes for foreign officials, but it was the taxpayers in the foreign countries who had to pay back the loans. When their governments couldn't do so, as was often the case, the U.S. or its henchmen at the World Bank or International Monetary Fund would step in and essentially place the country in trusteeship, dictating everything from its spending budget to security agreements and even its United Nations votes. It was, Perkins writes, a clever way for the U.S. to expand its "empire" at the expense of Third World citizens. While at times he seems a little overly focused on conspiracies, perhaps that's not surprising considering the life he's led. --Alex Roslin --

 

Interesting read, and I really would buy it that this happens regularly for third world nations. I think almost all aid for third world nations should be small scale, direct to beneficiaries, lending and aid. Too many wars and too much corruption handles when aid is given to governments.

Thanks for the post. I agree with it as well. But, (there is always a but), when most first world borrowing is done to fund social programs I do not see how is applicable to Greek, Spanish, Irish, or US debt. I just do not believe Russia or China is cajoling us to take international loans. To me, this damage is self inflicted, and reminds me tremendously of late western Roman economics. It will be up to decide if we end up like them.

Chris

 

Well, yes they did. The government seized the local banks and told the foreign creditors (mostly the UK finance industry) too bad. The banksters in that country, because they controlled the currency, let the currency grow to 10X the total size of the economy and then they risked it all. The UK and the Bank of England is furious, because they absorbed most of the loss, but there is little they can do about it.

 

Just a side point, but that would be nationalization of a bank, not a default on national debt. The nations banks are not the nations debt. Now, if Iceland told the world that they were refusing to honor any Soveriegn Iceland treasury bills or notes, then that would be a national default.