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Obama's Former Chief Economist Calls For An End To US Dollar Reserve Status

Tyler Durden's picture




 

Authored by Jared Bernstein, originally posted Op-Ed at The NY Times,

There are few truisms about the world economy, but for decades, one has been the role of the United States dollar as the world’s reserve currency. It’s a core principle of American economic policy. After all, who wouldn’t want their currency to be the one that foreign banks and governments want to hold in reserve?

But new research reveals that what was once a privilege is now a burden, undermining job growth, pumping up budget and trade deficits and inflating financial bubbles. To get the American economy on track, the government needs to drop its commitment to maintaining the dollar’s reserve-currency status.

The reasons are best articulated by Kenneth Austin, a Treasury Department economist, in the latest issue of The Journal of Post Keynesian Economics (needless to say, it’s his opinion, not necessarily the department’s). On the assumption that you don’t have the journal on your coffee table, allow me to summarize.

It is widely recognized that various countries, including China, Singapore and South Korea, suppress the value of their currency relative to the dollar to boost their exports to the United States and reduce its exports to them. They buy lots of dollars, which increases the dollar’s value relative to their own currencies, thus making their exports to us cheaper and our exports to them more expensive.

In 2013, America’s trade deficit was about $475 billion. Its deficit with China alone was $318 billion.

Though Mr. Austin doesn’t say it explicitly, his work shows that, far from being a victim of managed trade, the United States is a willing participant through its efforts to keep the dollar as the world’s most prominent reserve currency.

When a country wants to boost its exports by making them cheaper using the aforementioned process, its central bank accumulates currency from countries that issue reserves. To support this process, these countries suppress their consumption and boost their national savings. Since global accounts must balance, when “currency accumulators” save more and consume less than they produce, other countries — “currency issuers,” like the United States — must save less and consume more than they produce (i.e., run trade deficits).

This means that Americans alone do not determine their rates of savings and consumption. Think of an open, global economy as having one huge, aggregated amount of income that must all be consumed, saved or invested. That means individual countries must adjust to one another. If trade-surplus countries suppress their own consumption and use their excess savings to accumulate dollars, trade-deficit countries must absorb those excess savings to finance their excess consumption or investment.

Note that as long as the dollar is the reserve currency, America’s trade deficit can worsen even when we’re not directly in on the trade. Suppose South Korea runs a surplus with Brazil. By storing its surplus export revenues in Treasury bonds, South Korea nudges up the relative value of the dollar against our competitors’ currencies, and our trade deficit increases, even though the original transaction had nothing to do with the United States.

This isn’t just a matter of one academic writing one article. Mr. Austin’s analysis builds off work by the economist Michael Pettis and, notably, by the former Federal Reserve chairman Ben S. Bernanke.

A result of this dance, as seen throughout the tepid recovery from the Great Recession, is insufficient domestic demand in America’s own labor market. Mr. Austin argues convincingly that the correct metric for estimating the cost in jobs is the dollar value of reserve sales to foreign buyers. By his estimation, that amounted to six million jobs in 2008, and these would tend to be the sort of high-wage manufacturing jobs that are most vulnerable to changes in exports.

Dethroning “king dollar” would be easier than people think. America could, for example, enforce rules to prevent other countries from accumulating too much of our currency. In fact, others do just that precisely to avoid exporting jobs. The most recent example is Japan’s intervention to hold down the value of the yen when central banks in Asia and Latin America started buying Japanese debt.

Of course, if fewer people demanded dollars, interest rates - i.e., what America would pay people to hold its debt - might rise, especially if stronger domestic manufacturers demanded more investment. But there’s no clear empirical, negative relationship between interest rates and trade deficits, and in the long run, as Mr. Pettis observes, “Countries with balanced trade or trade surpluses tend to enjoy lower interest rates on average than countries with large current account deficits, which are handicapped by slower growth and higher debt.”

Others worry that higher import prices would increase inflation. But consider the results when we “pay” to keep price growth so low through artificially cheap exports and large trade deficits: weakened manufacturing, wage stagnation (even with low inflation) and deficits and bubbles to offset the imbalanced trade.

But while more balanced trade might raise prices, there’s no reason it should persistently increase the inflation rate. We might settle into a norm of 2 to 3 percent inflation, versus the current 1 to 2 percent. But that’s a price worth paying for more and higher-quality jobs, more stable recoveries and a revitalized manufacturing sector. The privilege of having the world’s reserve currency is one America can no longer afford.

*  *  *

Strawman? De-Dollarization goes Domestic...

*  *  *

Jared Bernstein joined the Center on Budget and Policy Priorities in May 2011 as a Senior Fellow.  From 2009 to 2011, Bernstein was the Chief Economist and Economic Adviser to Vice President Joe Biden, executive director of the White House Task Force on the Middle Class, and a member of President Obama’s economic team.

 

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Mon, 09/08/2014 - 16:52 | 5195111 Magnix
Magnix's picture

I knew that was coming!

Mon, 09/08/2014 - 16:55 | 5195115 Deathrips
Deathrips's picture

Gold Silver Standard!!!!

 

Long Physical!!!

 

and lead too, progressive zio socialists are sore loosers.

 

RIPS

Mon, 09/08/2014 - 16:57 | 5195134 pods
pods's picture

Maybe for next week's installment Mr. Bernstein can talk about how easy it would be to normalize rates?

hahahahhahahhaaha.

This is fodder to make people think they are still in charge.

pods

Mon, 09/08/2014 - 17:02 | 5195154 Winston Churchill
Winston Churchill's picture

Avoid bathtubs,shitgums, and nailguns before next weeks instalment.

The MIC will not be happy, nor the bankers.

Mon, 09/08/2014 - 17:06 | 5195170 knukles
knukles's picture

Another triumph of federalized common core education: "shitgums"
But I spellcketed it!

Mon, 09/08/2014 - 17:19 | 5195215 Pinto Currency
Pinto Currency's picture

 

 

After systematically destroying the USD over several decades, these clowns now call for the destruction of the USD.

Maybe you could have told everyone beforehand.

Mon, 09/08/2014 - 17:21 | 5195224 bwh1214
bwh1214's picture

Oh yeah this article is perfect, just like convincing us higher inflation is a good thing, they are now trying to convince us having the reserve currency should be thrown away as a matter of policy. 

 

I’ve come to the conclusion that there is no way we can stop the insanity of the liberals and Keynesians from its self destruction.  Fighting them will only delay the destruction of the current system.  We need the system to break so we can rebuild.  I am willing to allow them to attempt every social project, high inflation, money printing, dollar dethroning idea.  Hey maybe I’ll be wrong and we will enter a utopian society, year right. 

 

So only after it fails will we have the opportunity to rebuild a free market, private property, individual liberty maintaining society that we know it the most prosperous.  The only issue is that break will leave us vulnerable to a charismatic nut job like Hitler.  So I say we save our strength, stop fighting and allow them to destroy themselves.  Give them enough rope and room to hang themselves, if not they may tangle us up in the rope as they fall.

Mon, 09/08/2014 - 17:23 | 5195240 surfsup
surfsup's picture

Yeah just as USD is cranking...   

     Good luck with that call amigo --->

Mon, 09/08/2014 - 17:32 | 5195277 bwh1214
bwh1214's picture

Yeah its only cranking because the ECB is taking the Euro to the woodshed.

Mon, 09/08/2014 - 17:48 | 5195339 Citxmech
Citxmech's picture

Man - the amount of desperate bullshit pouring out of the cracks is becoming epic lately.  It's really starting to gain momentum, isn't it?

Mon, 09/08/2014 - 17:54 | 5195368 linniepar
linniepar's picture

Translated,  the children have gasoline and matches. Maybe they shouldn't be in charge.

Mon, 09/08/2014 - 18:01 | 5195396 Raymond K Hessel
Raymond K Hessel's picture

This is about the IMF and replacing the USD with SDRs (special drawing rights) that are essentially a basket of currencies that will be controlled by other countries.

Nothing changes except the US gets knocked off its superpower status by the man raised by his mother to hate America.

Still talking fiat money.

Mon, 09/08/2014 - 18:18 | 5195436 Tall Tom
Tall Tom's picture

WITH THIS STATEMENT AS EVIDENCE...

 

If anybody has any doubt of Obama's intention to destroy the sovereign United States, at this point, is so far in denial that they are hopelessly deluded and need Mental Health care immediately.

 

Obama and his administration need to be removed from office, charged with treason, and subsequently be convicted.

Mon, 09/08/2014 - 18:22 | 5195477 macholatte
macholatte's picture

 

Unless BO is impeached and thrown out fast, the next 2 years are going to be a nightmare.

 

 

America, how can I destroy thee? Let me count the ways.

-- Barry S

 

Mon, 09/08/2014 - 18:37 | 5195532 Squid-puppets a...
Squid-puppets a-go-go's picture

"new research reveals"

der, most ZHers had this filed under "No shit sherlock" about 2 decades ago

Mon, 09/08/2014 - 18:55 | 5195583 Bad Attitude
Bad Attitude's picture

The difference between two decades ago and now is that we now have an openly Manchurian-Candidate president.

Forward (over the cliff)!

Mon, 09/08/2014 - 19:00 | 5195600 CheapBastard
CheapBastard's picture

Reminds me when gas was 18 cents a gallon. Filled up my whole tank for less then $4.60. Now, gas is almost $4.60 per gallon!

Mon, 09/08/2014 - 20:00 | 5195776 Four chan
Four chan's picture

trial balloon is floated.

Mon, 09/08/2014 - 20:23 | 5195857 remain calm
remain calm's picture

Don't be fooled. This is just the government conditioning the sheeple for the eventuality that is going to be coming our way. Pretty soon LiesMan on CNBC will be touting the benefits to the mental midgets that listen to his propaganda. This is an orchestrated release that gets the ball rolling that makes it appear to be a "not a bad thing"  It's not a trial ballon it will be reality and they need an explanation that stupid people will buy.

Mon, 09/08/2014 - 20:56 | 5195977 Save_America1st
Save_America1st's picture

So this artice immediately reminded me of this Kyle Bass clip about some "senior obama administration official" telling him they were going to kill the dollar.  I don't take Bass for a liar about this...

We Are Going To Kill The Dollar_ Investor Kyle Bass Discloses Discussion With Senior Obama Admin
Mon, 09/08/2014 - 21:26 | 5196059 PT
PT's picture

Well he could have at least killed the dollar before all the manufacturers closed down their factories and left town, and before people forgot how to build stuff ...

Mon, 09/08/2014 - 23:47 | 5196391 Elvis the Pelvis
Elvis the Pelvis's picture

The Yankee dollar isn't going anywhere.  When this bubble collapses, the dollar will gain a shitload of strength.  Anyone who isn't long on the dollar has their head up their ass.

Tue, 09/09/2014 - 04:20 | 5196686 Richard Chesler
Richard Chesler's picture

It is no coincidence that most banana republics start with a monkey president.

More Martha's vineyard vacation for the corrupt puppet please!

 

Mon, 09/08/2014 - 21:27 | 5196066 palmereldritch
palmereldritch's picture

 "...maybe the smartest thing to do is pull it. And they made that decision to pull and then we watched the dollar collapse."

Mon, 09/08/2014 - 23:23 | 5196331 Calling Elvis
Calling Elvis's picture

"...maybe the smartest thing to do is pull it. And they made that decision to pull and then we watched the dollar collapse."

?? are u making reference to 9/11 ???

Tue, 09/09/2014 - 08:24 | 5196943 Bindar Dundat
Bindar Dundat's picture

Stop measuring financial success in the U.S. dollar!  Measure  the S&P 500 in gold for the last 50 years and you will see what I mean.

Mon, 09/08/2014 - 21:36 | 5196079 Bananamerican
Bananamerican's picture

"reminded me of this Kyle Bass clip about some "senior obama administration official" telling him they were going to kill the dollar"

An even better clip of the Obama official himself...

http://youtu.be/vJXU7EVXs2A

Mon, 09/08/2014 - 20:33 | 5195875 RaceToTheBottom
RaceToTheBottom's picture

I did not hear the term Debt Jubilee.  That will be necessary before any wholesale interest rate increases or even changes can be done.

SDR here we come.....

Mon, 09/08/2014 - 22:57 | 5196271 disabledvet
disabledvet's picture

And this is the most important point. The comment by the Administration official only shows the absurdity of the policies that have been pursued will nigh 6-8 years now.

The ASSUMPTION was that this would destroy the dollar...nay, veerily. Instead you now have a SUPER DOLLAR....which if you look at the numbers ("trillions!") seems a semantic impossibility ("no one can pay back a trillion!") yet indeed...that is precisely what is happening, with lower interest rates and a "full time part time labor force."

There have of course been a few "bumps in the road" in this Road to Perdition. What is surprising is what bumps there hasn't been however.

I mean a fourth equity bubble in thirty years? Seriously???

Tue, 09/09/2014 - 01:45 | 5196572 MontgomeryScott
MontgomeryScott's picture

I've been here before; on several threads on ZH. In fact, I have been here for several years. HUNDREDS of posts...

You can look up my history.

I must have sounded like I was on a 'lunatic fringe' or something, trying to show the posting 'people' the irrevocable and now provable conclusion to the madness and destruction that seems to be making the 'conspiracy theory' now appear to be the 'new normal'. I would link Youtube songs and graphic charts and other things... I have seen the comings and goings of Catholic-apparatchicks and Bit-coin apparatchicks. I have argued the fundamentals of the Austrian School and railed against the 'get-rich-quick' schemers of the Kenseyans. My 'battles' are but of little consequence now; and my percieved injuries (several of which are real) in wars past will not be either stated or used for self-aggrandizement.

A 'bump in the road' is taken up by 'SHOCK ABSORBERS'.

TEN THOUSAND YEARS, AND NOTHING IS LEARNED.

https://www.youtube.com/watch?v=jseTa7HUIDU

Exactly WHAT part of 'former Obama Economist calls for an end to U.S. Dollar reserve status' SURPRISES you?

The end IS NOW (not 'nigh').

Dude can't even SPELL the word...

 

 

Mon, 09/08/2014 - 20:31 | 5195881 RaceToTheBottom
RaceToTheBottom's picture

Digital Dupe

Mon, 09/08/2014 - 23:04 | 5196289 luckystars
luckystars's picture

They don't need our acceptance or approval anymore.

its a done deal.

At the crash of 08 Greenspan was on TV appearing a big screen TV saying "We need a whole new global financial system and a global central bank."

Mon, 09/08/2014 - 20:12 | 5195810 nmewn
nmewn's picture

Jared Bernstein, Jared Bernstein...of Romer-Bernstein "allow us to throw a trillion dollars into the furnace and we promise you five percent unemployment" infamy?

http://www.aei-ideas.org/2012/10/a-big-version-of-the-infamous-romer-berinstein-jobs-chart-updated-for-september-2012/romerbernsteinseptember2012-3/

That fucking Jared Bernstein!?!?

Mon, 09/08/2014 - 20:27 | 5195874 El Vaquero
El Vaquero's picture

I like how he plays it as though we can just give up the dollars status as the world reserve currency and the worst we'll see is a few percent inflation. 

 

Yeah, right!

 

Remind me what happens when all of those foriegn held dollars that are now useless to others come flooding back home?

 

LOL

Mon, 09/08/2014 - 20:58 | 5195981 Miffed Microbio...
Miffed Microbiologist's picture

Can you imagine the shell shocked faces when those driving Escalades go to fill up? That would have to get some of the soundly sleepings' attention. Gas and food will be in the stratosphere. I wonder how the no inflation claim would be spun then.

Miffed;-)

Mon, 09/08/2014 - 21:06 | 5196006 American Dreams
American Dreams's picture

The Fed buys them with unlimited printing and since we are no longer the reserve currency it wont matter to interest rates because the fed will buy those too.  We would effectively be Japan and last I checked they have fairly low interest rates.  This about being able to bring the wages in the USA down to the rest of the world and make the country subservient to a global no sovereign central banking authority.  See...  www.wocu.com This is the realization of the CFR right in your face, global banking authority, global self appointed government rule.  It has been in the works for a mighty long time, the men pushing it from the top are all old and they are damn sure they want to see their dream fulfilled. 

Know your enemy

AD

Mon, 09/08/2014 - 21:22 | 5196050 El Vaquero
El Vaquero's picture

I was talking about FRNs coming back, not USTs.  The Fed isn't going to print a bunch of FRNs to purchase FRNs flooding back home.

Mon, 09/08/2014 - 21:11 | 5196018 nmewn
nmewn's picture

Its what happens when someone parlays a Masters Degree in Social Work from Hunter College School of Social Work and a Masters Degree in Philosophy with a Ph.D. in Social Welfare into sitting behind a fucking desk at a "progressive" think tank as an "official" into being called...an economist.

Without actually, you know, having any idea what the fuck he's doing.

He was Bidens economic advisor, which should tell everyone everything they need to know, they're both crazier than a sprayed roach.

Tue, 09/09/2014 - 13:30 | 5196743 matrix2012
matrix2012's picture

Just give him a Nobel Prize in Economics, solve the issue if any.

Mon, 09/08/2014 - 21:34 | 5196080 PT
PT's picture

Countries have been moving away from the USD all year and now he says, "Oh, yeah.  We meant to do that."

Sounds like an otherwise charismatic criminal coming quietly after the police catch him, while telling his followers, "Yes.  I was trying to get caught."  At least he chose to come quietly and didn't bother trying to shoot his way out.  But then again, he knew he was going to lose.

Actually, I'm pretty ignorant of this stuff so you guys feel free to tell me if I'm on the wrong path.

Mon, 09/08/2014 - 21:16 | 5196031 MonkeyKnutz
MonkeyKnutz's picture

Posted here by another ZHer, I thought it is worth repeating...
Gas is still $0.25/Gallon..

 

Values Entered:

Quantity: 1 Coin Type: 1932-1964 Washington Quarter Silver Price:   $19.01 / troy ounce

Answer:

Total silver value is $3.44.

 

http://www.coinflation.com/coins/silver_calc.php

Mon, 09/08/2014 - 21:51 | 5196110 TheAnswerIs42
TheAnswerIs42's picture

Yuppers, just changed a quart of oil on the lawn mower, Penzoil 30 SAE, $5.49.

Remember it being $0.55.

Oh wait.

 

Mon, 09/08/2014 - 22:08 | 5196161 nmewn
nmewn's picture

 Yep, if you convert from fiat to real money you never lose the value of your labor.

Like him or loathe him, the truest parsed statement evah: "Inflation is always and everywhere a monetary phenomenon..."...it simply is, whether by shaving a coin or diluting its value with another metal or printing gazzilions in paper (devaluation of currency) is inflation ;-)

Mon, 09/08/2014 - 19:30 | 5195655 WhackoWarner
WhackoWarner's picture

Obama is a sold-out puppet. Always was. No power there.

I think you missed the actual guilty parties.  Treason belongs with the actual puppet masters.  And actually at this point it is crimes against humanity that should be applied liberally in just about every Western country.

Mon, 09/08/2014 - 19:55 | 5195691 Tall Tom
Tall Tom's picture

The whole damned bunch of them are sold out to the puppet masters.

 

This is a sell out to the Globalists and they are having the US surrender its currency, its sovereignity, and adopt the SDR as the World Currency. But damn it. It is STILL TREASONOUS.

 

I realize this, man. To a point you are right. So let me extend your point...

 

THAT DOES NOT MITIGATE OBAMA'S ACTIVE COMPLICITY.

 

In fact I would consider that an AGGRAVATING CIRCUMSTANCE as he was given a stewardship to protect the vital interests of the United States.

 

 

Mon, 09/08/2014 - 20:03 | 5195789 Harbanger
Harbanger's picture

The ultimate puppet masters are the banksters who are buying the world with their fiat.  Those in control are few but the corruption runs deep in our institutions and is multigenerational.  Victims of victims of victims.  Even those who may have benefited in the past and are afraid of reform will be better off when the healing begins.

Mon, 09/08/2014 - 20:17 | 5195838 Tall Tom
Tall Tom's picture

I agree.  Corrupt Banksters.

 

Hope for the best but prepare for the worst.

 

These wounds run deep and the infliction thereof may end up being fatal.

 

There may not be a healing possible.

Mon, 09/08/2014 - 20:19 | 5195844 Herd Redirectio...
Herd Redirection Committee's picture

Masters of leverage.   First borrow mad cash (from your crony pals, using fake collateral, of course).  Then buy a controlling interest in a company.  Leverage said company, and buy  a controlling interest in another company.  Leverage it to the hilt.  Repeat ad nauseam.  Upgrade to include entire governments and nation states, with due time.

Mon, 09/08/2014 - 20:43 | 5195927 RaceToTheBottom
RaceToTheBottom's picture

Interesting strategy, but your point is valid. TPTB will always weigh companies higher than individual Joes.....  As was always done

Mon, 09/08/2014 - 20:00 | 5195773 TheReplacement
TheReplacement's picture

If you ponder the long history of the Fed then maybe Obama is actually doing us a favor.  The needs to go.  For that to happen the dollar has to die as either a cause or consequence. 

Voting for people like Paul didn't get it done.  Maybe Obama can.  We just have to manage the fallout and degrade the statists capabilites.  Send me money and I'll figure a strategy.

Mon, 09/08/2014 - 20:11 | 5195812 Tall Tom
Tall Tom's picture

I have a strategy.

 

Opt out.

 

Do not comply with corrupt laws.

 

Limit your purchases to essential items.

 

Avoid Multinational Corporations as much as possible and support your local economy.

 

Buy Gold, Silver, Lead, Potassium Nitrate, and Sugar (Rocket Propelled Grenade Fuel), Glycerin, Sulfuric Acid and Nitric Acid (You do not need to make Nitroglycerin. Just adding the components together without an ice bath will do the trick.)...and pharmaceuticals...especially antibiotics.

 

(Who needs a gun when you can make High Explosives with rockets to deliver the payloads?)

Mon, 09/08/2014 - 20:27 | 5195869 Harbanger
Harbanger's picture

I think a better strategy is to awaken a few good men in the right positions of power (military but not only) so we may bring back individual rights and liberty over the oligarchs who rule us by restoring our Constitution (which BTW is exceptional, bitchez) Hang all the traitors and complicit criminals regardless of color, religion, creed, gender, sexual orientation, or national origin.  Equal opportunity lynchings bitchez.

Mon, 09/08/2014 - 20:40 | 5195910 Tall Tom
Tall Tom's picture

I wish I could buy that. I want to. But I cannot.

 

The American Republic has failed, sir.

 

Even if we were to restore it the same degeneration would happen. Why repeat a failed experiment?

 

THERE ARE NO POLITICAL SOLUTIONS. I will not place my faith into another Government ever again.

 

I am sorry to inform you but there is no hope. (Well...I have little hope for any of this.)

 

I want to tell you different but I cannot as that would be lying. I am sorry.

Mon, 09/08/2014 - 20:55 | 5195953 Harbanger
Harbanger's picture

The Republic has not failed, we have failed to maintain it.  The Idea that a Government works for and answers to it's Citizens, VS. the idea that we are Subjects of, that work for and answer to our Government, is ancient and runs deep in our blood.

Mon, 09/08/2014 - 21:19 | 5196040 American Dreams
American Dreams's picture

I hear you Harb, but when you have more takers than makers its impossible to restore self reliance.  At this point, right here, right now the slate should be washed.  The value of our a maker's labor has been reduced to the value of the government's hand out to the taker so a generational shift away from self reliance has been achieved.  It will not be restored without a removal of entitlement programs, a return to sound money and extreme amount of unrest.

Know your enemy

AD

Mon, 09/08/2014 - 21:54 | 5196116 shovelhead
shovelhead's picture

Maybe "bangin on a hoe" will take on a different meaning?

Mon, 09/08/2014 - 21:07 | 5196009 Miffed Microbio...
Miffed Microbiologist's picture

Harbanger, IMHO these men are awake. Every military man I have contact with has expressed concern and knowledge of the state of things in varying degrees. No, they don't advertise this but share it with those they trust. Most of my military friends are very well armed and prepped by admission. The others by inference. Now, I am not sure about the higher ups and am unsure where their loyalty lies. This may be pivotal in how this plays out.

Miffed;-)

Mon, 09/08/2014 - 22:38 | 5196224 Oliver Klozoff
Oliver Klozoff's picture

I seriously doubt that those who are motivated enough to follow Harbanger's idea would be interested in handing over power to the peeps once they risked ALL in that attempt.

Altruism doesn't exist anymore, if ever.

Tue, 09/09/2014 - 06:22 | 5196747 nmewn
nmewn's picture

Their forefathers risked ALL and did, its not their fault we let it slip away with all our navel gazing, beard scratching and altruistic empowerment of the nanny-state.

Mon, 09/08/2014 - 19:49 | 5195736 Harbanger
Harbanger's picture

"by the man raised by his mother to hate America."

I like that.  You're right about SDR's.

Mon, 09/08/2014 - 20:54 | 5195960 Kirk2NCC1701
Kirk2NCC1701's picture

The SDR has no future since the US vs. Russia war started, as I explained last night (5192709 ).

The SDR is valued in 4 currencies (USD, EUR, JPY, GBP), of which its populations are aging and their nations too deep in debt.  Yeah, like the BRICS or the Developing countries will be rushing in to buy SDR's fiat digital debt.  Just ask Argentina or Iceland.  Or Greece or Spain if they want the SDR.  ROTFLMAO.

I’ll wager you a nice dinner that what WILL happen is that… The USD will get dethroned as King Dollar:  No more GRC for you!  It will get demoted to a Regional Reserve Currency (RRC).  Along with the Real, it will be an RRC for the Americas.

Mon, 09/08/2014 - 21:25 | 5196054 American Dreams
American Dreams's picture

Kirk while you are correct that the SDR has no future you miss the overriding need that the top level guys see in a no soverign global currency.  It will happen, it has been planned for many many years and it will be the www.wocu.com if not something very similar. 

Know your enemy

AD

Mon, 09/08/2014 - 23:12 | 5196307 luckystars
luckystars's picture

Every five years they meet to discuss new currency, that time in in the next year. Add Chinese to that basket.

Tue, 09/09/2014 - 01:46 | 5196573 RaceToTheBottom
RaceToTheBottom's picture

Yep, the mix will change.  That could explain why Russia and China want Gold so much.  To get some legitimacy.

They will come up with the next Fiat, it will always be a Fiat.  

They ALL want a vehicle to have the ability to print more than they should...  It is what they do.

Tue, 09/30/2014 - 02:04 | 5269813 marmotmanor
marmotmanor's picture

Which might be correct but ignores the accumulation of gold by the Brics. They are not buying gold to make jewellery.

On the other hand, could they make gold anymore hated then it is? Sounds like a good time to buy

Mon, 09/08/2014 - 22:21 | 5196192 tarsubil
tarsubil's picture

A quart of half and half just went from $1.75 to $2.89 overnight at my grocery store. Fuck you.

Tue, 09/09/2014 - 04:18 | 5196687 LikeyMikey
LikeyMikey's picture

yeah but it is only cranking agains the Euro and for obvious reasons.....

Printing is printing

Mon, 09/08/2014 - 17:24 | 5195243 IANAE
IANAE's picture

O/T - anyone see the recent news FED's Tarullo says Fed Board will unveil SIFI Surcharge Rule soon... maybe +2% surcharge for short funding

Mon, 09/08/2014 - 17:56 | 5195373 IridiumRebel
IridiumRebel's picture

No, but Scott from the Kardashians is hosting a party in SF this weekend! It'll be CRAY-CRAY! Let me take a selfie!

Mon, 09/08/2014 - 17:25 | 5195246 NotApplicable
NotApplicable's picture

Sorry, but there's no way this shit will break to the common man's benefit.

Remember, Wall St. produced Hitler too!

Mon, 09/08/2014 - 17:34 | 5195281 bwh1214
bwh1214's picture

Hey, ya got to try right?

Mon, 09/08/2014 - 17:39 | 5195308 NotApplicable
NotApplicable's picture

That or die. I just don't like our odds.

Mon, 09/08/2014 - 17:57 | 5195383 whirling tword ...
whirling tword freedom's picture

End of WWI....  440 resolutions were passed and 419 of them were to punish Germany.

Mon, 09/08/2014 - 19:08 | 5195618 sylviasays
sylviasays's picture

"Sorry, but there's no way this shit will break to the common man's benefit.

Remember, Wall St. produced Hitler too!"

Delsuional

So did Wall Street produce Stalin, Mao, and Pol Pot too? 

 

Mon, 09/08/2014 - 20:09 | 5195802 Harbanger
Harbanger's picture

Wall Street is a good strawman for dunces.  They have no idea who is in control.

Mon, 09/08/2014 - 23:14 | 5196313 luckystars
luckystars's picture

Wall St did not produce Hitler, the Jews did.

Their behavior during WWl and after created Hitler.

Tue, 09/09/2014 - 00:03 | 5196422 ILLILLILLI
ILLILLILLI's picture

Most people know very little about history, Lucky. They prefer the comfort of their own delusions...the ones that support their viewpoint.

Tue, 09/09/2014 - 04:18 | 5196688 LikeyMikey
LikeyMikey's picture

WOW are YOU REALLY LOST AND MISINFORMED!!!!!

I sincerely have PITY FOR YOU...

 

nuff said

Tue, 09/09/2014 - 02:53 | 5196416 JRev
JRev's picture

Yes, that Professor Antony Sutton, research fellow at Stanford University's prestigious Hoover Institution, was sure off his rocker.

http://en.wikipedia.org/wiki/Antony_C._Sutton

https://www.youtube.com/watch?v=xSVWXmZB1wc

So was crazy 'ol Carroll Quigley, who headed up the Georgetown history department after teaching at both Harvard and Yale.

http://en.wikipedia.org/wiki/Tragedy_And_Hope

I'd link you to the body of credible, academic works these men, the latter of whom was closer to the true instruments of multinational power than any of us will ever be, have left humanity... but given that they total nearly 4,000 pages of documentation and "boring stuff," I highly doubt you'd be interested, let alone possess the attention span to digest the information.

After all, Ignorance is Strength, and your Strength is Doubleplusgood, Comrade!

Tue, 09/09/2014 - 07:03 | 5196778 matrix2012
matrix2012's picture

JRev, good reminder to all the truly inquiring minds :-)

 

Alternatively, one may try to read the much more concise commentary works...

Read the short book by W. Cleon Skousen titled: "The Naked Capitalist," written as a commentary on a 1300 page tome by Dr. Carroll Quigley (Bill Clinton's mentor!) It will tell you all you need to know about how the current imperium was put on this path of inevitable destruction. When Quigley wrote the book in 1969 he felt safe in publishing it because he thought there was no turning back by then. Quigley died in 1977. From the way things are going, he may very well have been right.

Take a look at the bunch of pdf here.

Meanwhile for those Antony Sutton's refined works, go to the TPB or KAT, plenty there! - - perhaps at one fine day I may pull in all that I've on him and put it somewhere for the sake of ZH readers :-)
Tue, 09/09/2014 - 07:41 | 5196837 Tall Tom
Tall Tom's picture

Hell. Anthony Sutton's book, "War on Gold" (1977), has been my crystal ball for quite awhile. What he predicted for the 1970's happened, and is happening currently in Orders of Magnitude, now.

 

Very smart man.

Mon, 09/08/2014 - 20:05 | 5195793 TheReplacement
TheReplacement's picture

It will be a crisis.  We see it coming even if we aren't the ones behind it.  Now is the time to plan.

I'd suspect we'll see massive inflation as the GRC status is lost and the dollars come home.  There will be a epochal moment where .gov and the Fed make a move the change the setup.  There will be mass chaos as it will probably involve and exchange of currency for a new one and one would guess EBT/Snap and all those things will either break or be painfully wobbly.  Force will be deployed to contain the situation at the least.  That will be the moment as they will all be visiable, pre-occupied and fairly easy avoid.

Never let a crisis go to waste.

Mon, 09/08/2014 - 20:26 | 5195865 Herd Redirectio...
Herd Redirection Committee's picture

Imagine people in Brazil, China, India, Indonesia, Taiwan, Saudia Arabia... All wanting to spend dollars they have held for some reason as SAVINGS!  LOL!

And of course the restrictions will already be in place by then.  Tax on bringing cash into the country.  I don't want to brainstorm too many ideas for them right now.

Mon, 09/08/2014 - 22:00 | 5196133 TheReplacement
TheReplacement's picture

I was thinking more along the lines of, when government breaks down, a way to restore law and order.

Mon, 09/08/2014 - 17:28 | 5195264 NumNutt
NumNutt's picture

So this guy is one of the assholes that took all of us down this dark alley of QE by screaming "Follow !". Now we are supposed to listen to him because he is so wise.... Kind of like an idiot trying to tell you how not to get dog shit on your foot while trying to scrape it off his own.

 

Mon, 09/08/2014 - 20:11 | 5195814 mkkby
mkkby's picture

It's even worse than that.  After decades of exporting all of our jobs to China, let's raise the price of everything so nobody can afford anything.

No more EBT cards, no more MIC, no more social security and medicaire.  Let's see -- the inner city bros will be rioting right along side the seniors and the gov contractors.

The first thing to go up in prices is oil/gas.  Everything else will follow.  Forced end game.

Mon, 09/08/2014 - 20:28 | 5195879 Herd Redirectio...
Herd Redirection Committee's picture

People will have to ride the train, of even pedal a bicycle!!  Can you IMAGINE THE TERROR?!

Tue, 09/09/2014 - 00:07 | 5196434 ILLILLILLI
ILLILLILLI's picture

That sounds great if you use a Marlon Brando voice...

Mon, 09/08/2014 - 20:34 | 5195894 Proofreder
Proofreder's picture

Paid $3.03 /gal yesterday near Richmond, VA for Regular gas.

Where do you see gasoline by Thanksgiving ??  $1.73 or $10 or $17.30 ???

Right now, 3 bucks per gallon -  not too bad, compared to $4+ ... glad I don't live on the Shakey side (sunny CA)

Tue, 09/09/2014 - 10:29 | 5197343 detached.amusement
detached.amusement's picture

come up to ct, $4.20 yesterday for 93 octane

 

so glad malloy was able to steal the election..

Mon, 09/08/2014 - 18:30 | 5195518 Eyeroller
Eyeroller's picture

The Fed culprits in the 2008 crash were the beefed up Community Reinvestment Act and the run-amok Fannie Mae and Freddie Mac. All played a key role in loosening lending standards.

What did we get after it crashed and burned?  Stimulus on steroids with TARP, QE1, 2, and 3.

The Keynesians al a Krugman always make the argument when one of their experiments fail that NOT ENOUGH was done.

 

Tue, 09/09/2014 - 04:24 | 5196690 LikeyMikey
LikeyMikey's picture

Yes..good point and don't forget the FAIR Housing Act that started under Carter, build up by Clinton and supercharged under BUSH!!!

The banks tend to do what the the corrupt govies we elect tell them to do....

Mon, 09/08/2014 - 19:29 | 5195652 booboo
booboo's picture

 "The only issue is that break will leave us vulnerable to a charismatic nut job like Hitler."

 Uh, we have been electing "charismatic nut jobs" ever since Ike, Hitler won because he nailed the coming depression and it's causes, he understood the banksters motives as well as he tired of the League of Nations kicking the germans in the nuts and he turned the german economy around.  Keynes was instrumental at Versailles in dividing up germany and it's assets as well as who would get what from Germany, (seeing a pattern here). History is written by the victors and history is a lot more insightful when you have the courage to understand it from the losing side as well.

 

Tue, 09/09/2014 - 13:15 | 5196598 RaceToTheBottom
RaceToTheBottom's picture

I thought we were always electing people who we would want to have a beer with.

The last thing that we should want is a president who we want to have a beer with.....

Having said that, the president is just a front man used for the benefit of the mouth breathers...

Mon, 09/08/2014 - 19:58 | 5195767 razorthin
razorthin's picture

And that most of us "enjoy" low interest rates.

Mon, 09/08/2014 - 21:00 | 5195993 gabeh73
gabeh73's picture

glad your on my page now....same conclusions I came to when W was elected a 2nd time.

Tue, 09/09/2014 - 08:17 | 5196712 matrix2012
matrix2012's picture

NumNutt: "So this guy is one of the assholes that took all of us down this dark alley of QE by screaming "Follow !"..."

As if a giant vampire squid has been sucking dry the blood of its victim before abandoning it and moving out looking for other ones.

Thu, 09/11/2014 - 21:54 | 5196078 acetinker
acetinker's picture

Shitgums, I remember the article, but nothing else about it.  I remember lol'ing, but never dreamed it'd become part of the ZH lexicon.

However, if I ever see shitgum in any context, I'll know there's a better than even chance that it came from a ZH regular.

Used to be a DJ who called himself The Greaseman.  He had his own lexicon.  You had to know him to understand his rants.

Massive = Takin' a dump

Ten Hut Status = Well, you probably know what that means

Bomb bays = Uranus

Brown Cappin' = Prairie Doggin' = Daylight Pokin' = having to poop really bad

The boys that eat no ham = I'll betcha know that one, too

Carlos, the international terrorist = The boys who eat no ham = Whoever the sitting US President reports to

Maybe we need a lexicon like that.  And to think, it all started with shitgums.

Mon, 09/08/2014 - 17:18 | 5195214 Sudden Debt
Sudden Debt's picture

The American revolution started because the English levied a 2% tax on their goods.
A 2% tax... That was all it took to get a revolution back in the day.

And now, it's only normal to have a 3 to 4% inflation rate plus taxes...

We're all just sheep.

Mon, 09/08/2014 - 17:29 | 5195267 NotApplicable
NotApplicable's picture

Back then they had real money and direct exposure to risk, given there was no facade of a safety net. Today? People have fake money, and no exposure to risk due to the prop we know as financialization of the economy that has zombiefied the world.

By the time it all collapses, it will be too late to do anything about it.

This is just the largest delay "Stupid should hurt!" that humanity has ever witnessed.

Which likely means nukes will fly before it's all said and done.

Mon, 09/08/2014 - 20:32 | 5195892 Radical Marijuana
Radical Marijuana's picture

That is what I think too, NotApplicable!

If it does not get that bad, that fast, then for ordinary Americans losing the global reserve currency status will mean that inflation for them will relatively suddenly go up over 50%. The ruling classes that have deliberately made all this happen have no plans other than more genocidal wars, along with democidal martial law. Welcome to the days of Peak Insanities!

 

Mon, 09/08/2014 - 18:00 | 5195393 whirling tword ...
whirling tword freedom's picture

medicated sheep with EBT cards.. no more need for soup lines... free shit while living on borrowed time and money... with obama phones...

Mon, 09/08/2014 - 18:48 | 5195571 omniversling
omniversling's picture

" After all, who wouldn’t want their currency to be the one that foreign banks and governments want to hold in reserve?"

Not want, have to have, worldwide, to trade commodities. Until recently (BRICS and trade deals country to country in currency OTHER than $GRC). Since Nixon closed the gold window in '71, other countries have to 'earn' their currency of settlement, and the US can just print theirs? Hardly fair. Deal in '73 with House of Saud to guarantee military protection in return for SA only selling oil in $US has required other countries to hold $US.

Along with the privilege of being the GRC, comes responsibility. 'Global Policeman' has become 'Global Thug', and much of the rest of the world is fed up with it.

See Jim Willie ... Shieiss $:

The Split Birth of New Scheiss Dollar

http://news.goldseek.com/GoldenJackass/1392039918.php

John Williams - Shadow Stats, US inflation currently around 9% based on previous metrics: 

John Williams-No Bank Bail-ins-Inflation Instead

https://www.youtube.com/watch?v=clrpVNoPHII&list=UUG-G8LLr38fQUNZU8K0t-E...

http://theeconomiccollapseblog.com/archives/tag/petrodollar   

Astonishing incompetence on the part of the paper fiat ponzi central planners, or part of the gloBAALists plan to crash the system they created on Jekyl Island, prior to 'going gloBAAL' with the RFID cryptodigiprint Single World Currency.

 

Mon, 09/08/2014 - 19:52 | 5195745 Bangalore Equit...
Bangalore Equity Trader's picture

Listen! I don't care what you think, what you say, or what you "MAY" have to contribute.

I'm going to shove my "COCK" down your throat and you're going to enjoy me! Indian style!

Tue, 09/09/2014 - 03:15 | 5196654 Zwelgje
Zwelgje's picture

That post is like a turd floating in the river. 

Tue, 09/09/2014 - 08:45 | 5196996 matrix2012
matrix2012's picture

Bangalore, if you keep on posting like this here, YOU'll become a FUCKTARD then!

Mon, 09/08/2014 - 22:29 | 5196211 acetinker
acetinker's picture

Agreed, but I thought you were in Belgium.  The average American sheep is so inured to the embedded system that s/he can't even consider that they are not "exceptional" in any way, shape or form.  There are quite a few Americans who actually are exceptional, and I'm certain the same is true of Belgians.

However, in all realms, those who are touted as exceptional in media, are actually theives.  I've spent zero time in your country, but if it's like mine, the same will be true.

History is irrelevant to all but the most diligent observers.  Sadly, the history of our time will be written by the theives.  Same as it ever was, I guess.

Those who are truly exceptional toil in the fields and the workshops of the world, no matter their physical location.  They do not depend on 'country'.  They depend on themselves.

Oh, and you may want to consider that the history of the American Revolution was written by theives as well.  Yeah, I know- Founding Fathers and all that, but where did that meme come from?  Is it real?

*preparing for castigation*

Tue, 09/09/2014 - 04:42 | 5196696 Sudden Debt
Sudden Debt's picture

Belgium is a 95% copy of America. If you'd walk here, you'd feel right at home.

The only difference is that our cops are just for show and everybody's a pacifist.

For the rest, half of the country is on some kind of wellfare programm, taxes are the highest in the world.

Today we had in the newspapers that Belgium is number one in the "redistrubuation of wealth..."

I don't really see that as a compliment... I call that communisme.

 

Tue, 09/09/2014 - 01:01 | 5196525 herohedge
herohedge's picture

C'mon sheeple! Declare yur sovrinty, grab ur AR and take charge of Murica! Fuck yeah. Stop livin in the matrix and start fightin the globalists! Don't get ur vaccine shots! Have you built ur bug out bunker yet?

Mon, 09/08/2014 - 18:26 | 5195497 tjeffersonsghost
tjeffersonsghost's picture

Avoid skyscrapers as well...

Mon, 09/08/2014 - 17:03 | 5195157 knukles
knukles's picture

Inflate away

The Cloward Piven Strategy In Action For YOU

Mon, 09/08/2014 - 17:21 | 5195227 NoDebt
NoDebt's picture

Damned right, Knuk.  I'm sure inflation would stop at a nice orderly 2-3%.  Sure it would.  No way a country with only $17T in debt would ever experience runaway inflation like, say, Venezuela, the day after actively destroying it's reserve currency status.  

Fucking brilliant plan, isn't it?

Mon, 09/08/2014 - 20:50 | 5195951 Herd Redirectio...
Herd Redirection Committee's picture

In Soviet Amerika, Cloward Piven strategy target you!

Mon, 09/08/2014 - 17:06 | 5195165 Landotfree
Landotfree's picture

Whether or not the dollar is the medium of exchange is mostly irrelavant, you can eliminate the USD from being the reserve currency.... hit the reset button,hey sounds great until you are told you are the one being liquidated... a virtual straight line from peak, to collapse... to liquidation of the walking unfunded liabilities.  

"Dethroning “king dollar” would be easier than people think."

Of course it's easy, that part is always easy... it's the liquidation of their friends and family which is the not so fun part or the hard part... well, that is coming either way.  There is no backup system, its peak, fail to expand, collapse, liquidate.... 3-6 decades later rinse and repeat... unless Nukes are used.... total extinction is on the table this cycle.

"If you vote for me all of your wildest dreams will come true." -Pedro (Napleon Dynamite) 2004.

"Everyone has a plan until they are hit" - Mike Tyson

 

Mon, 09/08/2014 - 17:23 | 5195236 NoDebt
NoDebt's picture

Exactly.

And this guy used to be in the White House not long ago.  You wonder why there's no recovery happening.  Maybe this is part of the reason why.  This dude is out on Pluto somewhere.

Mon, 09/08/2014 - 17:36 | 5195298 knukles
knukles's picture

That's cold.  Pluto's not even a planet, anymore.

Mon, 09/08/2014 - 18:03 | 5195403 Raymond K Hessel
Raymond K Hessel's picture

Check out this website.

 

It contains a compelling argument regarding replacing the USD with IMF's SDR.

http://philosophyofmetrics.com/2014/01/21/sdrs-and-the-new-bretton-woods...

Mon, 09/08/2014 - 18:21 | 5195481 Tall Tom
Tall Tom's picture

Unless you support a decline in the standard of living of the American people THERE IS NO FUCKING COMPELLING ARGUMENT FOR IT.

 

Can you get it right? Or are you as hopelessly deluded as the rest of Liberal America?

Mon, 09/08/2014 - 21:04 | 5195973 Raymond K Hessel
Raymond K Hessel's picture

Fucktard, I'm probably more Libertarian than you.

I meant that it builds a strong case about the why's behind the IMF, SDRs, maybe even why some sovereign govs are constantly attacking the IMF heads with criminal charges.

Not that I think replacing the USD and our sovereignty is a good thing.  It's compelling that his hypothesis seems to jive with this recent article.

But I'm willing to call a truce.  I think we're on the same side of the issue.

Tue, 09/09/2014 - 08:04 | 5196875 Tall Tom
Tall Tom's picture

I think that perhaps you misused the adverb, "compelling". There is an inference of Force using that word. Voluntary action is much preferable.

 

Perhaps the phrase, "supportive of the premise" may have been a better choice?

 

I will give you the benefit of the doubt...fellow fucktard.

Mon, 09/08/2014 - 20:43 | 5195923 Womb Service
Womb Service's picture

I've checked this guy out. He thinks Gold is manipulated...upwards. He is also very confused with his terminology, often getting "real" and "nominal" completely ass backwards. Epic fail.

Tue, 09/09/2014 - 08:24 | 5196941 Tall Tom
Tall Tom's picture

Well...I believe that price manipulation of Gold has happened in both directions. While there is currently a bias to price declines, at times it has proven advantageous to realize price gains. It is called the good old "Pump and Dump" as it removes liquidity from others.

 

My personal desire is for a 100% totally manipulated Gold Price Market where the price NEVER CHANGES. Yeah. I want a realization of a Gold Standard.

 

As for his terminology??? Perhaps his understanding is weak. See my response to him above.

 

Maybe he is truly seeking and just needs to learn. Maybe I have been too harsh.

Tue, 09/09/2014 - 09:01 | 5197048 matrix2012
matrix2012's picture

Indeed it's a 10-part short essay about the coming NEW Bretton Woods

http://philosophyofmetrics.com/category/sdrs-and-the-new-bretton-woods-2/

Mon, 09/08/2014 - 17:52 | 5195359 Bastiat
Bastiat's picture

When is Pedro running, anyway?  His cousin would be great at Homeland Security.

Mon, 09/08/2014 - 18:02 | 5195398 whirling tword ...
whirling tword freedom's picture

It is very hard to get someone to understand a simple concept when their check depends on them not understanding it.

Mon, 09/08/2014 - 18:31 | 5195516 Landotfree
Landotfree's picture

Yup, if everyone knew the Truth... the checks would stop flowing and the liquidation would begin... eventually the liquidation will start once humans hit max potential.... usually 60-80 years... the fat lady starting warming up in 2008.  

Tue, 09/09/2014 - 03:22 | 5196658 Zwelgje
Zwelgje's picture

"There is no plan B."        

Mon, 09/08/2014 - 17:22 | 5195195 hobopants
hobopants's picture

Well if Interest rates start to rise we'll simply hit them with airstrikes, duh.

Mon, 09/08/2014 - 17:54 | 5195366 Payne
Payne's picture

The writer want to assume that we have the choice vs the rest of the world realizing the deception.

Mon, 09/08/2014 - 18:34 | 5195529 Antifaschistische
Antifaschistische's picture

yah, so.....is the short story, this dude thinks America would be better off if other countries didn't want its currency?

Are you kidding?   We get loads of "stuff" from all over the world because people/countries/whatever want US Dollars.  Mainly so they can buy gas.   So they can make more "stuff" to send to America to get more dollars to buy gas.

If they STOP working for $2 a day, so they can get 2 US DOLLARs then we're going to have some real fun with the transition to America's $15 per/hour minimum wage crew.   It would be the perfect storm.

As for me....I have assets in US Dollars simply because I live in America and get paid in US Dollars.   I should WANT the USD to be a reserve currency.  I also completely understand why the rest of the world would NOT want that.   Enjoy it while it lasts.

Mon, 09/08/2014 - 19:32 | 5195661 Kirk2NCC1701
Kirk2NCC1701's picture

Jared Bernstein.  It's about time that Club Members started speaking the truth.

But, if you get to "truthy" too often, it may be a good idea to keep the brakes on your car in top shape, to avoid long walks along piers, bridges, tall buidlings or hobbies with nailguns.  ;-)

Tue, 09/09/2014 - 09:57 | 5197218 matrix2012
matrix2012's picture

Yup, he should care much about being "HASTINGIZED"

Mon, 09/08/2014 - 20:16 | 5195831 20834A
20834A's picture

Propaganda to make it all seem good, because they know it will happen anyway. I laughed.

Tue, 09/09/2014 - 05:01 | 5196703 irishlink
irishlink's picture

When I read the headline I thought head games. The dollar reserve status is already history so they plant a lovely story from someone important enough to make it look like a desired beneficial and welcome outcome for the USA

Mon, 09/08/2014 - 17:02 | 5195159 seek
seek's picture

There will never be a gold/silver standard with the current TPTB. Indeed it would actually work against the desired outcome.

But this is a huge tell, though, when you've got supposedly influential people from the inner circle supporting this. Ultimately I don't think they really support it, it's just they know it's going to happen anyway so they want it to look like it was their own idea to do it.

Don't forget, that "inconsequential" 3% inflation cuts the dollar's purchasing power in half in just 23 years, and the first dollar saved by someone entering the workforce at 18 will be worth 25 cents on retirement. And there's no escaping that with investing when we're in ZIRP4EVA mode.

Stuff like this should be a wake up call. We're already chained to a bed, naked, and this guy just opened a bottle of lube.

Mon, 09/08/2014 - 17:07 | 5195182 Chupacabra-322
Chupacabra-322's picture

Lube? They won't be using any lube. They're going to go Raw Dog on our asses.

Mon, 09/08/2014 - 17:25 | 5195248 Bay of Pigs
Bay of Pigs's picture

Bend over America, you are getting DRIVEN to Cleveland!

(always thought that would be a nice title to a book)

Mon, 09/08/2014 - 18:04 | 5195409 whirling tword ...
whirling tword freedom's picture

I sort of feel like I've been asked to find a pineapple....

Mon, 09/08/2014 - 20:52 | 5195963 El Crusty
El Crusty's picture

they will be doing worse than raw dogging us. they will give it to us traditional Muay Thai style- wrap it in hemp rope, dip it in resin and roll it around in broken glass.

after its over they will say " you bleed like Mylee- good fuck!"

the only difference is Tong Po wont be the one taunting you, it will be some old guy in a back room of the federal reserve building

Mon, 09/08/2014 - 17:10 | 5195187 Landotfree
Landotfree's picture

Whether or not there is a gold/silver standard is mostly irrelevant to the problem, it is only a symptom of the problem.   The Romans used silver, so! What happened there, oh they attached interest to their medium of exchange.... Rome went from a few million to less than 50,000 population.   

"Stuff like this should be a wake up call."

Haha.  If humans were able to figure out the problem, the system would collapse this instant, the system continues to somewhat function for the time being as the majority of hairless monkeys are not awake.... that is good for you, at least for now.  Eventually the hairless monkeys will be thrown out of bed.... the end result is always been known.  

Mon, 09/08/2014 - 17:24 | 5195242 F0ster
F0ster's picture

The Global Reserve should be GOLD. End of story.

Mon, 09/08/2014 - 19:54 | 5195752 SuperVinci
SuperVinci's picture

Global Reserve Asset...fyp?

Mon, 09/08/2014 - 20:53 | 5195962 SILVERGEDDON
SILVERGEDDON's picture

Gold / silver standard makes too much common sense, and is not easy to manipulate - never gonna happen.

Electronic mystery money world wide ? Oh, fuck, yeah - a conrollist / bankster / Orwellian government wet dream come true.

Easy to manipulate, easy to print electrons, easy to track.

That is the M.O. for the Elite freaks.

Until the pile of fake paper bullshit collapses.

And, the barter / gold / silver / copper / lead standard is the only one left standing.

Mon, 09/08/2014 - 22:05 | 5196149 dirtscratcher
dirtscratcher's picture

Okay, forgive me if this sounds naive, coming from an economic newbie, but:

Wouldn't the relative value of our currency be determined more by gold if we were on a gold standard at a given percentage (say maybe 40%), and thus forign soveriegns would have little influence?

And if our trade deficit is determined by consumption, doesn't that mean that we (American citizens) detremine our trade deficit by our collective purchases, deciding to buy more foriegn goods than we sell to foreigners? And isn't this a good thing being as how cheaper labor means that we are in effect performing a "labor arbitrage" ? 

And isn't it true that it's not the trade deficit that's killing us (though I'm sure it's a factor) but the budget deficit, as our oligarchy spends us into oblivion?

And isn't it true that all of the above is made possible by the Federal Reserve and it's tentacles (primary dealers, bought-and-paid-for politicians, and feckless citizens sucking at the public teat whether that be the teat of corporate graft or the teat for the Free Shit Army)

Doesn't this mean that our current situation is not caused by reserve currency status and that a properly managed reserve currency is not he bogeyman to be feared, Triffins dilemna notwithstanding?

Tue, 09/09/2014 - 02:39 | 5196629 barre-de-rire
barre-de-rire's picture

you cant revert to PM, too much fiat money flow. you cannot cover with physical...

Mon, 09/08/2014 - 17:01 | 5195148 freewolf7
freewolf7's picture

Ha, to look like we're losing reserve currency status on purpose. The sheep will eat this up.

Mon, 09/08/2014 - 17:06 | 5195175 Dixie Rect
Dixie Rect's picture

"Ha, to look like we're losing reserve currency status on purpose. The sheep will eat this up."

Nailed it!

Mon, 09/08/2014 - 17:21 | 5195226 NotApplicable
NotApplicable's picture

I'm reminded of Sheriff Bart holding the gun to his head in "Blazing Saddles."

 

Mon, 09/08/2014 - 18:41 | 5195551 Eyeroller
Eyeroller's picture

"Somebody help that poor man!"

Mon, 09/08/2014 - 20:16 | 5195836 Herd Redirectio...
Herd Redirection Committee's picture

"Somebody better call somebody"  *as heard in recent video, of black teens beating white store clerks unconscious

When police stopped persecuting white collar crime, because it was "too complex", this shit started (or more accurately, this shit re-started).  Fractional reserves.  Fiat currency.  Usury. Cronyism.  TBTF.  The marriage of Corp and State.  Fascism.  The rule of the lawyer, and the central banker, as the new priest class.

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