• Sprott Money
    05/06/2016 - 06:03
    The US, in its own decline, is showing this same self-destructive tendency. The worse things get, the greater the inclination of the citizenry to say, “Carry on, everything’s fine.”

Guest Post: Currency Wars: Debase, Default, Deny!

Tyler Durden's picture




 
0
Your rating: None
 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 10/28/2010 - 15:23 | 684139 Atomizer
Atomizer's picture

Never let a crisis go to waste.

Today's SDR Rate

1 USD = SDR 0.637122

SDR Interest Rate = 0.4%

Special Drawing Right (SDR) Currency Exchange Rate Conversion Calculator

http://coinmill.com/SDR_calculator.html

Thu, 10/28/2010 - 15:25 | 684220 Herd Redirectio...
Herd Redirection Committee's picture

Yeah, good article, but he kinda lost me right here: "Our leadership placed America and the world unknowingly on a preordained destructive path because it was politically expedient and the easiest way out of a difficult predicament."

No, they did it because that was what was best for the Oligarchy.  The bailouts were extortion payments.  Now they want to destroy the US dollar, and inflate their way out of debt.

I agree that 'they' will try to bring in SDRs, but this SHOULD spell the end for the fiat currency experiment, so let us hope they are not able to continue it under a DIFFERENT NAME!

http://psychonews.site90.net

We currently have a series on the Currency Wars, Foreclosuregate, and the Oligarchy.

Thu, 10/28/2010 - 15:44 | 684286 Oracle of Kypseli
Oracle of Kypseli's picture

"No, they did it because that was what was best for the Oligarchy"

That is the truth.

SDR's could also be devalued when the leading powers agree. There will always be leakage.

What happened to the "Threat of National Security" when we would no longer control our own currency? And,

What happens if other countries start using dual currencies? 

No way out of this mess.

Thu, 10/28/2010 - 16:12 | 684401 tmosley
tmosley's picture

Prove it.  Define who the oligarchy is, and what is in their best interests.

I'm not saying you are wrong, but the author is right that it was politically expedient.  Expediency does not necessarily mean that it was not in favor of some class of oligarchs.  That is what politics is, the means by which the wealth of the nations is distributed.

Sure, the oligarchs are looking out for their best interests, but then, so is EVERYONE.  The real problem is that we have here a class of people (politicians) who get to decide who gets what.  Make no mistake, they hold the real power.  They might be friendly to a given group of oligarchs for now, but they will dump them like yesterday's garbage whenever it is convenient.  Lehmen Bros. is an example of this.

Thu, 10/28/2010 - 16:34 | 684463 Rasna
Rasna's picture

Prove it.  Define who the oligarchy is, and what is in their best interests.

This is a trick question, right?

Try:

  • Wall Street - Meaning Banks, especially TBTF, Investment and Mortgage
  • Multinational Corporations
  • International Banking Interests who own US Banks
  • Ruling banking families

Wealth and power have no boundaries.

 

 

Thu, 10/28/2010 - 21:08 | 684901 chinaguy
chinaguy's picture

+1 - this ain't so deep as a well...

the comment: "Sure, the oligarchs are looking out for their best interests, but then, so is EVERYONE".....is a fool's lament.

Yes, those pesky oligarchs...the ones who control the media, the banks, the government and the military...those pesky oligarchs are looking out for their best interests....and not yours.

You fool. This is documented - public domain information, not some conspiracy theory printed in USA Today. Just keep your head in the sand and let your family and grand children be repeatedly raped. Comfort yourself that your middle class countervailing force is an equal match for TPTB. 

 

 

 

Thu, 10/28/2010 - 22:47 | 685066 Clockwork Orange
Clockwork Orange's picture

Prove it? 

You're either a) kidding b) being provocative for your own entertainment, or c) ignorant ... and presumably new here.

The Oligarchy is precisely as listed by Rasna. 

Do you not know about the repeal of Glass-Stegal as orchestrated by Bob Rubin ... who shortly thereafter left to merge a deregulated Citibank together with Travelers and Smith Barney (See how that worked out - ticker symbol "C" ... then check out Bob's earnings over the past decade.)?

Do you not know that 2007's ponzi-orchestrated earnings resulted in record bonuses for Wall-Street ... that is until they were surpassed in 2009 (1 year after the most massive fraud in history nearly collapsed the global economy), only to be surpassed again in 2010?  For all the great work?

Do you not know that the rally from the bottom in March 2009 was spawned by a combination of money-printing generational theft and an accounting change that replaced mark-to-market with mark-to-whatever-hell-you-think-is-a-reasonable-price?  (the reason there were any profits to fund bonuses to begin with)

Do you not know that the risk-to-reward continuum is FUBAR'd totally?  That useless, inefficient, corrupt, sociopathic politicians can screw up every possible decision immensely with no personal consequence whatsoever?  Yet they get benefits that surpass the wildest dreams of the risk-taking private sector?

How about Barney Frank, the sociopathic, vote-buying, communist still being in office? 

Astonishing.

You're in the wrong space, dude.  Try www.disney.com

There you will find either the entertainment you seek or the sand in which you can bury your head.

Thu, 10/28/2010 - 22:57 | 685074 espirit
espirit's picture

Concerning SDR's...

1oz Silver = current spot ($USD 24.01)

              = 15.11 SDR's

but 15.11 SDR's = $USD 23.72

IMF math or is this indicative the DX has got to go down?

Thu, 10/28/2010 - 15:16 | 684156 NOTW777
NOTW777's picture

“What destabilized the system was war spending."

right, greenspan, MBS, RE bubble, banker fraud, fannie, freddie, wild gov spending, fraud ridden gov social programs,  had nothing to do with it

see article on prop 19

Thu, 10/28/2010 - 15:14 | 684158 Rahm
Rahm's picture

and there off... in the 'Race to Debase' they are neck and neck and neck and neck and neck and.....  But wait, out of NOWHERE, Bernanke is pulling out a *OH WOW FOLKS, THIS HAS NEVER SUCCESSFULLY IMPLEMENTED...........

Thu, 10/28/2010 - 15:18 | 684183 Cdad
Cdad's picture

In the words of the Dog,

"Let's light this crap candle!"

I still f'n chuckle every time I see those words....

Thu, 10/28/2010 - 15:18 | 684188 bozu
bozu's picture

DDD- rating

Thu, 10/28/2010 - 15:21 | 684193 youngandhealthy
youngandhealthy's picture

US authorities missed a golden opportunity during the fall of 2008 to rein in the TBTFs. The whole world will be paying for this. It was a huge mistake not to put harsh limits and rules on the TBTFs. Very very sad indeed

Thu, 10/28/2010 - 15:20 | 684194 trav7777
trav7777's picture

everyone acts like this is a war.  Brazil is BUYING our currency...China has been for decades.

They are ASSISTING us in the devaluation by propping the USD up longer than it should, devaluing themselves in the process.  Win/win for the CBs and big industrialists

Thu, 10/28/2010 - 15:26 | 684223 youngandhealthy
youngandhealthy's picture

You know why? Because the printing press is running in top-speed. It is not for fun Brazil, S Korea, are imposing capital control...they don't want any more shitty USD. And in order to bring it down after all this influx they need to "devalue" buy buying the shit.

Thu, 10/28/2010 - 15:28 | 684239 TheMonetaryRed
TheMonetaryRed's picture

+1

Of course they are. 

Thu, 10/28/2010 - 15:25 | 684213 TheMonetaryRed
TheMonetaryRed's picture

There's not gonna be protectionism. 

There will be trade disputes, certainly, but not protectionism. 

The U.S., Japan and Europe are headed down a monetization road. The other countries are all about strong currencies - SO THEY AGREE. 

Yes, I said "strong" currencies. That's the "Asian Tiger" model. And as a former red, I guarantee you - guarantee - that the Chinese are NOT going to debase. Commies are obsessed with strong currencies. 

Thu, 10/28/2010 - 15:29 | 684247 primefool
primefool's picture

By joing their beloved Renminbi to the Dollar at the hip - they have already debased their currency! They dont know what they are doing either. No one has a plan. This is where a Princeton PhD comes in handy - it gives you a belief system ( wrong) but a belief system nevertheless to take action - while the commander in chief - who looks more and more like a middle manager at Sears ( call a staff meeting - Now Guys - we have to Do Something - lets have a conference call, form a sub-commiteee) that kind of "leadership".

Thu, 10/28/2010 - 23:43 | 685115 TBT or not TBT
TBT or not TBT's picture

The Deficit Commission or whatever has met, like five times.   One more ought to do the trick.

Thu, 10/28/2010 - 15:26 | 684219 primefool
primefool's picture

Today's action is new and unusual. The Dollar is sinking and stocks are Weak. It aint sposed to be dat way!!

Thu, 10/28/2010 - 16:23 | 684436 malusDiaz
malusDiaz's picture

As a foreign entity: 

 

Step 1:  Sell your stocks / bonds/ whatever is demoninated in USD (falling 'asset' prices).

Step 2: Buy local currency (to take it home).  Falling dollar.

 

This is how falling asset prices + falling dollar at the same time can happen.

 

 

Thu, 10/28/2010 - 15:26 | 684226 Shooter McGavin
Shooter McGavin's picture

I don't know how you could have a system of SDR's partially backed by precious metals.  The SDR concept is just another paper currency controlled by an entity other than the Fed.  A new currency is either backed by precious metals or its not.

Thu, 10/28/2010 - 15:31 | 684252 youngandhealthy
youngandhealthy's picture

That would be better....FED sucks

Thu, 10/28/2010 - 16:29 | 684450 starfish
starfish's picture

Maybe if US gold gets transferred to the IMF and the IMF pays off the US Debt with SDR's?

Fri, 10/29/2010 - 09:41 | 685544 Oh regional Indian
Oh regional Indian's picture

Or maybe the IMF already holds all of the US instruments traded through the DTC as some kind of collateral during the coming collapse? I've read some strange stuff in my day, but this article had me, especially in the end... I'd recommend it, pinch of salt at hand...

http://ming.tv/flemming2.php/__show_article/_a000010-000923.htm

ORI

http://aadivaahan.wordpress.com

Thu, 10/28/2010 - 15:31 | 684254 Something Wicke...
Something Wicked This Way Comes's picture

I am going to start a new tin foil etf. In or out mf'ers?

Thu, 10/28/2010 - 15:32 | 684257 carbonmutant
carbonmutant's picture

Word from the currency pits is that the big Traders are over printing the trades to push the market in to making a move.

Thu, 10/28/2010 - 15:35 | 684266 primefool
primefool's picture

Yeah you can come up with all kinds of monetary schemes - Yap stones, cigarettes whatever . Thing to keep in mind is the money system does not directly create any goods - or- services. It only acts by influencing human behavior - social engineering. The only criterion for success of a money system is if it induces productive cooperative behavior. I think on that basis this system is failing miserably - it is ripping apart social trust and cohesion and global cooperation - it is a Failure. And no new paper shuffling is going to fix it. People will need to figure out things at a more basic level - who are they, what do they want etc.

Thu, 10/28/2010 - 15:37 | 684269 primefool
primefool's picture

Yeah you can come up with all kinds of monetary schemes - Yap stones, cigarettes whatever . Thing to keep in mind is the money system does not directly create any goods - or- services. It only acts by influencing human behavior - social engineering. The only criterion for success of a money system is if it induces productive cooperative behavior. I think on that basis this system is failing miserably - it is ripping apart social trust and cohesion and global cooperation - it is a Failure. And no new paper shuffling is going to fix it. People will need to figure out things at a more basic level - who are they, what do they want etc.

Thu, 10/28/2010 - 15:38 | 684274 primefool
primefool's picture

Yeah you can come up with all kinds of monetary schemes - Yap stones, cigarettes whatever . Thing to keep in mind is the money system does not directly create any goods - or- services. It only acts by influencing human behavior - social engineering. The only criterion for success of a money system is if it induces productive cooperative behavior. I think on that basis this system is failing miserably - it is ripping apart social trust and cohesion and global cooperation - it is a Failure. And no new paper shuffling is going to fix it. People will need to figure out things at a more basic level - who are they, what do they want etc.

Thu, 10/28/2010 - 15:38 | 684276 primefool
primefool's picture

Yeah you can come up with all kinds of monetary schemes - Yap stones, cigarettes whatever . Thing to keep in mind is the money system does not directly create any goods - or- services. It only acts by influencing human behavior - social engineering. The only criterion for success of a money system is if it induces productive cooperative behavior. I think on that basis this system is failing miserably - it is ripping apart social trust and cohesion and global cooperation - it is a Failure. And no new paper shuffling is going to fix it. People will need to figure out things at a more basic level - who are they, what do they want etc.

Thu, 10/28/2010 - 16:50 | 684277 hambone
hambone's picture

Who are the good guys and who are the villains?  Who do we support?  Are we the evil upon the world now attempting to debase and default on our obligations to repay creditors (America = subprime borrower who took out double, triple our homes value to live an opulent lifestyle but now we ain't gonna pay that ridiculous loan back...America to world, you got jingle mail).

Thu, 10/28/2010 - 15:48 | 684278 hambone
hambone's picture

Dup

Thu, 10/28/2010 - 15:47 | 684311 KillTheFed
KillTheFed's picture

Here comes the land grab.  Wreck the currency and set-up a global one through the IMF or BIS.  Goodbye sovreignty, hello World Government.  At least the enslavement will be on the surface in seen in the light of day.

Thu, 10/28/2010 - 16:47 | 684486 doolittlegeorge
doolittlegeorge's picture

Land redistribution?  i don' think so. democrats are no dummies.  they set up this humongous entitlement known as "doctor care" in order to keep state governments under the thumb of a shockingly unpatriotic if not outright anti-patriotic albeit small part of the federal set.  in a word "power."  the so called "industrialists" haven't mattered for decades although the "media" is only now cracking its knuckles as they expose piecemeal everthing that goes on in our highly exposed political people's lives.  CNN itself went right into the Senator's office via laptop and Google" on the air in real time.  If that's not a direct threat against a United States Senator I don't know what is and if i were that Senator I would have come on air and told Anderson Cooper that myself.  Needless to say "the media's idea of national security includes dumping Anderson Cooper's Haitian story line and looking the other way as a cholera empidenic breaks out in Haiti while they are under our care."  In short "the media's power player numero uno" so keep watching them as though they're not watching you and everyone else for that matter.  The biggest holders of cable tv interests?  The politicians themselves though most are former and "among the billionaire class." (this is especially true in Ohio.) More to the point "money as mere ownership" is clearly and suprisingly for this site "limiting."  In the mfg'ering space "the money is in the making" and still is and needless to say "it is honest money."  And when talking media or transports "it is in the moving" as well.  When talking tranports "ownership" is clearly defined save for "when moved through the United States Postal Service" whereupon your item is then owned by the United States Government to do with as they see fit.  When moved "through media" it is "owned" by the "media mogul" which clearly "he does as he sees fit."  Spying on citizens of course is illegal.  Needless to say "the government understands this as well and is spying on the media first and foremost."  In other words "simply spooging it over to the internet, Cablevision, doesn't change the felonious conduct" if that is what is going on of course.  Now excuse me while i return to "the art and honesty" that is a simple Hollywood movie and music from that greatest of gifts from the 80's:  a compact disc and with what may be the only honest real time media left in our world: professional sports.

Thu, 10/28/2010 - 18:16 | 684690 Psquared
Psquared's picture

There is a lot of information there to read and digest. But his opening paragraph grabbed me by the short hairs. I think I agree with the thesis. They nationalized FNM and FRE, but they failed to seize the banks. By treating the gangrene in the toes they neglected the infection in the foot and leg which has now spread to the kidneys and liver and threatens the heart.

Thu, 10/28/2010 - 19:32 | 684790 flaunt
flaunt's picture

How about instead of accepting some damnable IMF currency solution we demand free market money?  Why should we allow any government to tell us what we will and will not accept as currency?  If you want to use gold, use gold, if you want to use a roll of charmin toilet paper, have at it.  People aren't totally stupid... If they have a stake in the game and freedom to choose they will use reliable currencies and reject all others.  The monopoly on currency must be broken during this cycle of destruction.

 

 

Thu, 10/28/2010 - 19:46 | 684803 moofph
moofph's picture

"It will not end well as we naively get caught in the spider’s carefully laid out trap."

...thanks Gordon...and i agree.

Thu, 10/28/2010 - 19:48 | 684807 Gloomy
Gloomy's picture
Japan Risks Being `Totally Behind' in Fighting Deflation as Fed Gears Up

The Bank of Japan’s inflation forecast shows it won’t meet its own guidelines for price stability, a prediction that signals policy makers haven’t pumped enough cash into the economy.

 

From Bloomberg

Thu, 10/28/2010 - 20:34 | 684870 Pseudo Anonym
Pseudo Anonym's picture

The Rothschild banking family learned this hundreds of years ago and is the reason why they moved from solely owning gold to energy, mining, agriculture and selective base materials process production.

The closer to the heart of the problem you get, the fewer comments. Have you noticed that? Do you dare to say who these hofjuden are working for? That's what I want to know.

Thu, 10/28/2010 - 21:04 | 684921 tony bonn
tony bonn's picture

very good...

"Though Gold is real wealth it does not grow wealth, but rather stores it or protects it from the debasement of paper ‘trading’ instruments. "

not entirely so. see antal fekete on the real bills doctrine. gold is far more important than a store of wealth.

Thu, 10/28/2010 - 21:17 | 684932 TheGreatPonzi
TheGreatPonzi's picture

"Though Gold is real wealth it does not grow wealth, but rather stores it or protects it from the debasement of paper ‘trading’ instruments. "

When everybody around you gets poorer while you don't, you get richer. Gold does not indeed produce above-average returns in normal inflationist times, but solely stores value ; though, in the case of hyperinflation, it makes you richer relatively to other people.

Thu, 10/28/2010 - 21:21 | 684938 gwar5
gwar5's picture

Debasement of the USD and defacto default is just our way of saying to the world, "we still love you", and is a lot more polite than just saying "we're not going to pay you back".

I was saying in 2009, the democrat congress is spending money like someone who is intentionally maxing out all the credit cards in a frenzy like someone who is just about the file for bankruptcy. Wuzz right.

Thu, 10/28/2010 - 22:04 | 685004 JimboJammer
JimboJammer's picture

95 %  of  americans  in totally  IN  The  DARK   on  this  banking

crisis /  gov.  debt.   I  go  to  parties  and  bring  this  up....

nobody  is  up  on  it....  The  Average  American  has only 1 oz.

of  Silver  and  no  Gold ...  just  cash  in  the  bank...

Thu, 10/28/2010 - 22:04 | 685005 JimboJammer
JimboJammer's picture

95 %  of  americans  in totally  IN  The  DARK   on  this  banking

crisis /  gov.  debt.   I  go  to  parties  and  bring  this  up....

nobody  is  up  on  it....  The  Average  American  has only 1 oz.

of  Silver  and  no  Gold ...  just  cash  in  the  bank...

Thu, 10/28/2010 - 22:05 | 685007 JimboJammer
JimboJammer's picture

95 percent   of  americans  in totally  IN  The  DARK   on  this  banking

crisis /  gov.  debt.   I  go  to  parties  and  bring  this  up....

nobody  is  up  on  it....  The  Average  American  has only 1 oz.

of  Silver  and  no  Gold ...  just  cash  in  the  bank...

Thu, 10/28/2010 - 22:07 | 685012 JimboJammer
JimboJammer's picture

95 percent   of  americans  in totally  IN  The  DARK   on  this  banking

crisis /  gov.  debt.   I  go  to  parties  and  bring  this  up....

nobody  is  up  on  it....  The  Average  American  has only 1 oz.

of  Silver  and  no  Gold ...  just  cash  in  the  bank...

Thu, 10/28/2010 - 22:07 | 685013 JimboJammer
JimboJammer's picture

95 percent   of  americans  in totally  IN  The  DARK   on  this  banking

crisis /  gov.  debt.   I  go  to  parties  and  bring  this  up....

nobody  is  up  on  it....  The  Average  American  has only 1 oz.

of  Silver  and  no  Gold ...  just  cash  in  the  bank...

Thu, 10/28/2010 - 22:07 | 685014 JimboJammer
JimboJammer's picture

95 percent   of  americans  in totally  IN  The  DARK   on  this  banking

crisis /  gov.  debt.   I  go  to  parties  and  bring  this  up....

nobody  is  up  on  it....  The  Average  American  has only 1 oz.

of  Silver  and  no  Gold ...  just  cash  in  the  bank...

Do NOT follow this link or you will be banned from the site!