Max Keiser On The Death Of The US Dollar, Middle Class And Overall Economy

Tyler Durden's picture

Lots of speculation today about the upcoming death of the U.S. currency, middle class, and by implication, its entire economy, as gold hits all time highs. Max Keiser joins the fray: "This is just another step to the US economy collapsing, and the US, as a major power, collapsing." One thing is certain: Listen, and understand. The Chairman is out there. He can't be
bargained with. He can't be reasoned with. He doesn't feel pity, or
remorse, or fear. And He absolutely will not stop, ever, until the dollar is dead.

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naiverealist's picture

Ditching the US dollar for purchasing oil (gold/food/commodities) is a significant issue.  The financial war has started.

Anonymous's picture

more accurately; the resource wars have begun in earnest.

Anonymous's picture

The financial war began when a bunch of chinese students LOLed at Timmay(!) when he visited China earlier this year.

Careless Whisper's picture

That incident will go down in history.

Anonymous's picture

Did April Fool's Day come early today?

Russian TV interviewing a Pee Wee Herman former
stockbroker in Paris spouting global contacts and predicting a new global currency with 50% gold and 50% devaluation of the dollar. Right.

Now there's a bit of entertainment propaganda to rival Michael Moore.

Past RT hits: Michael Jackson really alive in CIA plot, Russian Cosmonauts on the dark side of the moon in
Ipswich Hanger and the Russian Father of All Bombs.

Makes us pine for 83 year old Mao swimming 10 miles upstream in the Yangtze River or Kim Jong il celebrating 4 sequential holes in one per round of golf with endless
live lobster, Hennessey and kidnapped call girls.

PW asserting the crash of 2008 was deliberately set by
bankers wanting bigger bonuses has to be the best RT reportage yet.

Let's never let facts and reason get in the way of a
wild story, eh?

The word PW was groping for was seigniorage,
not coinage. And the USA has plenty of that for a good reason.

Decrying the military industrial complex is
nothing new, going back to Washington's Farewell
Address, picked up by Ike and the SDS.

Military dominance is the reason America still has the
largest gold reserves of any country, as well as the largest credit of any country.

Okay, China is gaining and may surpass Japan next year,
but collapsing USA GDP is still three times China's.

China isn't getting too far without the USA as the Bushes and Clintons demonstrated for R&R.

We saw this story before in 1989 with Japan taking over the world starting with Pebble Beach and Rockefeller Center.

Who owns them now?
(Pan to millions of Japanese Seniors quietly collecting their 1% postal bond coupons.)

Consider $8 518 274 000 000 world fiat currency reserves divided by 113 476 336 ounces of IMF gold reserves and we have $75 066.5231 an ounce gold.

Pretty exciting stuff until we remember most Arab, Chinese, Japanese and Russian surplus reserves are still held in dollars and euros for a good reason. No one else has the
gold, heft and size, although many have penis envy.

The dollar still prices half of all world trade,
twice Euro trade. Surplus nations are hardly in a rush
to bite their talking noses off to spite their
financial fannies.

The French still march to their own drummer. Are they Robert Fisk's real rumour source for the latest
New World Order Bilderberg conspiracy infowars fantasy?

Chinese backing for the new SDR is still 60% dollars
with the rest fiat currencies. No gold.

The Chinese renminbi yuan is pegged to the dollar because the USA is still its largest global market despite creative news stories and a deflating lingering inflation hangover.

We may not be going any time real soon to a 50% gold world
currency which devalues the dollar 50%, despite $1043 gold prints quite shy of the $2300 real gold high in 1980.

Newsflash to neoKeynesians:
We devalued the dollar 83% the last 8 years and it
did not work to balance budget and trade deficits.

Killing the dollar now will not do any better and may invite
even more anti-American sentiment by those caught with dollars. (Not Europeans, who no longer take them.)

Now we may actually bankrupt banks, cut government benefits, default bad debts and raise taxes the old fashioned way that has always worked in the real world.

Indeed, Middle Eastern representatives of the world's largest petroleum reserves said today they did not even dream this and will continue to price oil in dollars.

RasPutin, China and Japan said similar. Guess that leaves Brazil and India.

Of course Fisk covered himself by saying there would be official denials. Right. Some are not even dignifying the
nonsense with a comment.

For anyone who can pass the math captcha here, which
does not accept correct 3 digit answers, this may look more like desperate 70.70 dollar shorts trying to cover.

George Soros?

We're itching to buy EDZ above 6.57 and GLL above 11.75 with trailing buy stops...

The Deacon's picture

Agreed, i disregard the whole broadcast b/c it was on RT.  I'd prefer to hear it from say Robert Hormats from Goldman Sachs.  That Kaiser dude broadcast on al Jazeera before!  He must be a liar.


I get my REAL news from CNBC.  Credible American mainstream media.  Have they ever led us astray?


What a world we live in1

shadowboxer's picture about ditching oil instead, definitely the FED,  maybe the FED first because we might need oil to transition.

 Stanley Meyer had an oil alternative in the 70's:

 Blacklight power is in the midst of developing revolutionary electrical generation plants:

...if we'd put some incentives and manpower behind these types of ideas instead of trying to figure how to socialize and control the world thru ponzi healthcare/bank bailout scams, everyone would be a lot better off except the ones in control of the ponzi/bank scams that have pervaded society for far too long.

 Let's get on with it people.  We have a constitution that allows the peoples government to issue a script.  We have a way out of this slavery:

 ...think locally, act globally, be part of the solution - do ya get it?


cocoablini's picture

It started when China demanded their gold back-in physical from London-that started the race to gold

Michael's picture

For the record,

I'm not a gloom and doomer on the climate where the planet is going to go up in a ball of flames due to man-made global warming.

I'm just a gloom and doomer on the economy where the country is going to go down in a ball of flames due to the man-made Idiocracy.

Stuart's picture

LOl.   Tell us what you really think Max.  

Yossarian's picture

Do we forget that The Fed bailed out all of these Fiat currency sponsoring central banks around the world via swap lines?  Does Russia realize how bankrupt they'd be if The Fed allowed the natural deflation to occur and the oil price to fall to $20?  Does China realize that they match every printed dollar we send to them with printed RMB?  Is anyone aware of the dubious collateral (worse than Treasuries and Agencies) taken on by the ECB in their liquidity programs?  The welfare state obligations and deteriorating demographics in both Europe and Japan?  Why should similar products cost so much more in Europe than in the US?  Is it due to Europe's superior growth prospects?  Unlikely.  The $ is not a referendum on $ vs. other fiat currencies. it's a referendum on fiat currencies. 

Assetman's picture

The Chinese should really appreciate the Fed's efforts/willingness to swap Tresuries for worthless MBS with the Chinese central bank.   Ooops!  The Fed doesn't want Joe Public to know about these Foreign central bank swap arrangements.  My bad.

I'm sure the Chinese are already expressing that "thanks" by exchanging their Treasury newfound holdings for gold.   That's what you get when you trash your currency on a global basis, I guess.

chumbawamba's picture

Sure, but I can't help noticing the nationalistic overtones of your comment, akin to "all you loser countries would be nothing without the US", to which I reply that the US would be nothing without these other countries.  Don't knock the crackheads when we're the ones supplying the crack.

I am Chumbawamba.

SDRII's picture

The fed sabved the world: lol

the fed didn't bail out anyone - they bailed out themselves in a short temism that is embamatic of their approach to the economy.

Yossarian's picture

I hate The Fed- they are destroying the US and the world economy.  But their policies are mimicked throughout the world so not sure why it should be so under-valued when compared to currencies with similarly shaky economic, demographic, and fiscal foundations.  Against gold, oil, etc. I understand.   

Anonymous's picture

"The $ is not a referendum on $ vs. other fiat currencies. it's a referendum on fiat currencies."

Thats how I see it too. If the USD goes, so does EVERY other fiat currency. It will simply mean fait currencies only work in theory, not in reality - point prooven by history.

I live in the EURO zone, but I am sure the EUR wont make it, if the USD dies....

As an aside: The german word for money is "Geld" - that is very close the word "Gold" hmm.... ;)

chumbawamba's picture

When the dollar tanks, the Euro has six months of viability before it, too, succumbs.  This is wild speculation, so ignore me.  But make sure you convert your Euros to gold within six months after the death of the not-so-almighty dollar.

I am Chumbawamba.

Anonymous's picture

Sir, what is your point?

Stuart's picture

The move away from the dollar is common sense and as predictable as the sun rising somewhere on this world tomorrow.  The debt levels are simply untenable at these levels and they're still growing at break neck speeds.  Give me a break to those who are shocked at this.  You've either had your heads buried up your arses or been on another planet. 

Anonymous's picture

otherwise known as "keynsians".

chumbawamba's picture

Hey, Max should write dictionary entries.  His verbal description of The Bird was pretty good.

I am Chumbawamba.

Anonymous's picture

he is too kind to bernquacke....but i'll let it stand for now....

Sqworl's picture

Dollar Armageddon is not coming over a pricing unit, nor did the US invade Iraq for that reason. The story is nothing meaningless hype.

The remaing basket case of currencies out there will not work.

Anonymous's picture

the market is gunning higher on lower dollar because that is good for exporters?

Hmm, but what about all those people who have dollar assets? They will not be very happy at all will they? And maybe they are pulling out and won't want to buy any more treasuries.... pathetic interest compared to Australia for example and you don't lose money because the dollar keeps collapsing so you lose money all ways if you buy US stuff

Ivanovich's picture

The guy is a bit of a loon, no?

Gordon_Gekko's picture

Well, if you mean in a brilliant sort of way, sure. Anyways compared to Obama, Ben, Timmy, Larry et. al. he's f--king Einstein.

agrotera's picture

Not even a bit! Max Keiser is a truthteller, and the corrupt powers that dominate our government and run all policy (the private federal reserve and their agents and their bought representative, senators, and presidents, legislate to legalize criminality) try to discredit the truth by saying it is conspiracy theories and those who speak the truth are loons.....time to wise up.

Sqworl's picture

Me also thinks, this is another spec job on Oil and Gold...SUCKERS!!!!  RALLY THIS..

palper's picture

Robert Fisk is a full on nutter. Go read his articles over the past 10 years.

As for the oil/dollar I would suggest go read Mish today. He explains these things are nothing to get worked up about.

Project Mayhem's picture

imo Mish is a f*cking idiot.  I don't think I've ever read anyone so completely naive and foolish about the world as Mish.  In fact that's precisely what I quit reading his blog.


That said, gold is in contango , not backwardation (there is positive carry),  so this is unlikely to be 'it', unless we have systemic failure and currency crisis, which is of course possible considering the entire system is insolvent and built upon a foundation of fraud, lies and deceit.


The key here is to watch the right metrics, such as gold, gold basis, USDX, s&p , etc.


By the way I just checked Fisk's past articles, and I see nothing so far that suggests to me he is a 'nutter'  (unless you consider sharp criticism of the war in Afghanistan to be evidence of insanity).

SWRichmond's picture

imo Mish is a f*cking idiot.  I don't think I've ever read anyone so completely naive and foolish about the world as Mish.  In fact that's precisely what I quit reading his blog.

Me too, PM.  Naive is the perfect word.  My criticism of Mish has always been his incredible inability to think outside the box.

Anonymous's picture

Agreed, except to say that Denninger is worse than Mish. Listened to Jim Sinclair on King World this morning. He said that if you think that Bernanthnerbama etal are idiots, you're the fucking idiot.

Describes Denninger's blog perfectly. I mean, at some point you have to wake up to the fact that it doesn't really matter if it's theiving or not. Nobody's getting busted. Nobody's gonna get busted until AFTER TSHTF and then we'll get a show trial or two.

Gordon_Gekko's picture

If you have read even ONE of Denninger's posts, you have read 'em all. 'nuf said.

Anonymous's picture

Denninger, he does not like gold.

chumbawamba's picture

Exactly.  The theme is always, "I'm Karl Denninger!  I am angry!  I have a sea bass shoved up my ass!"  And then he farts the burrito he had for lunch all over his chair.

I am Chumbawamba.

Marge N Call's picture

Is there a video feed of that?

ghostfaceinvestah's picture

Yeah, you can agonize over right and wrong all day, and God bless those who do, but ultimately you need to take a realistic view on human nature (reading some history books helps), and realize everyone is primarily interested in protecting their own.  Would deflation be the right remedy for this problem?  Absolutely, we should have some asset deflation.  But it doesn't help the owners of the Fed, who control the nation's currency.  So they will try to take the easy way out, by destroying the dollar.

Gordon_Gekko's picture

Me too. I deleted him from my Google Reader a while ago. Moron.

ghostfaceinvestah's picture

Add me to the list of non-Mish readers.  His analysis is decent, his conclusions are terrible.


Edit: look at the YTD returns on the following "assets" and tell me the USD is the place to be:

DXY: -6%

DJIA: 11%

Gold: 18%

WTI: 64%

Holding USD, which the deflationists would recommend, has been a nightmare YTD.

Gordon_Gekko's picture

Hey ghostface, did you take a position in Gold?

ghostfaceinvestah's picture

Yes, I did, I didn't see you around when I was mentioning it a couple weeks ago, but I moved a good chunk of my oil money into gold, got in at just under 1000 fiatcos.  Oil was a good short term play as a bet against the dollar, but ultimately I felt it best to be in real money.

I guess I have a bit of an advantage as I see daily the continued destruction in the mortgage market.  With the Fed MBS purchases, FTHB tax credit, FNM/FRE bailout, FHA, Treasury MBS purchases, etc., we have easily thrown 2T fiatcos at the problem, and prices are barely stabilizing with a huge backlog of REOs waiting to hit the market. ZB is going to need to print 2-3X more to continue the charade.  Serious delinquencies are rising at a fast clip despite all that effort.  It is becoming a vicious cycle - increased delinquencies leading to further declines leading to more delinquencies - 2T fiatcos slowed that problem a bit, but more fiatcos are needed to slow a further decline.

I see gold hitting 2000 as priced in fiatcos by this time next year.  If I am off, it will only be on the upside - it could hit 3000 fiatcos, or higher.

the only way that won't happen is if Zimbabwe Ben throws in the towel and decides that maintaining the USD illusion is more important than papering over the failed economy.  I can't see that happening, he is an idiot.  I fully expect a massive mortgage debt forgiveness at some point soon, , and when it happens, the dollar will be crushed relative to real money (gold).

Arco's picture

There's no question that the "continued destruction in the mortgage market" is going to have a much more lasting and cataclysmic effect on the US economy than before—I agree. What amazes me though, is that this time the signs are so much more visible, and the lessons we supposedly learned should be relatively fresh in our minds. It should be extremely clear I think that the policy is to inflate our way out of the mortgage debt—elevated inflation of over 4% for a decade or so.

That said, unlike many on this blog, I don’t see the dollar losing reserve currency status. For one, a reserve currency requires that that currency’s country have a military...  which contradicts directly with what Max suggests, that because the US has a military we then should lose the reserve currency status…

cougar_w's picture

Max's comment about Russia and China not wishing to fund US imperialist ambitions was well said.

They (and others) would like to see the last Cold-war-era superpower brought down to the same level as everyone else. And it wouldn't hurt their own regional ambitions (esp Chinese access to oil resources, incl in Canada) to have the US military somewhat starved and on a shorter leash. Buying our (US) crap Treasuries with good money is a way to keep us on top, and failing to do so is an easy way to bitch-slap us without actually making any provocative move that some US demagogue could use to political advantage.

On that point, they would NOT be happy if US politics turned violently militant and nationalistic; at least Mussolini didn't have nuclear weapons at hand when he made war in Africa. And we won't even bring Adolf Hitler into it on the assumption that unalloyed madness is only really possible once in a thousand years. Right?


Gordon_Gekko's picture

I remember you mentioning it, but never knew if you actually did it. Good for you. As for me, I had been waiting for this type of move all year and went ALL IN (many times over) at $950 before the triangular consolidation broke out. I don't even plan to take any profits at all until at least $1500.

ghostfaceinvestah's picture

I know you have been long for a while, and I knew you were right, but I figured I had some time, and going into Oil (and other fiatcos for that matter) was a matter of expediency.

I was blown away on March 18th, I knew Bernanke was an idiot, I just didn't believe he was that big of an idiot.  The easiest move for me was into oil and the CAD and AUD.  I closed the other fiatcos a while back for a nice gain (in US fiatcos - not sure I consider it a "gain" per se, more a maintenance of wealth) but kept the oil until recently, still have some, but I knew the money printing would create the illusion of recovery and stability for a while, so there was no hurry for me to move into gold.

As of a few weeks ago I figured I need to get in before I miss a big move.

Like I said, I see mortgage stats all day, and once I started to see August results, I knew we were fucked.  Summer is the selling season in RRE, and the delinquency results were horrid.  Not just an increase in delinquencies, but an increase at the same pace as previous months, despite 2T in fiatcos thrown at the problem.  And of course now we have talk of more fiatcos being thrown at the problem in the form of an expanded and increased home buyer tax credit.

As for the time to switch from gold back into fiatcos, again, you need to watch what ZB does in the mortgage market.  If he keeps his promise and exits the MBS market in March, and ends some of these other stupid programs like TALF, then fiatcos might regain some value.

But if, like I suspect, he keeps buying, then hold your gold.

And don't worry about him lying about his agency MBS activities - everyone in the market knows who is buying what, so the trail of his buyers is easy to detect.

Gordon_Gekko's picture

Great timing with the oil. I missed the move in oil and was rewarded with sideways action in Gold all summer (I won't buy stocks just on principle, except Gold stocks of course). I guess I'm gonna keep whatever I acquired below $1k till the futures markets implode upon themselves as, IMHO, we are unlikely to fall below that level ever again. It will be my very own personal ATM machine.