This page has been archived and commenting is disabled.
Obama's Former Chief Economist Calls For An End To US Dollar Reserve Status
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.
»
- 67589 reads
- Printer-friendly version
- Send to friend
- advertisements -
@ Doom and Dust
"...I do wonder what happens when you force a diet on a feeding pig. Both the fodder guy and the pig will be pissed. I'd worry most for the pig."
>>> force a diet on a feeding pig <<<
and it relates to the consumers of the largest market for the world; of the land of abundance...
Hahahaha... a very funny term to depict the situation,,,, ROFL>LOL
but in reality it may be quite precarious situation
If ZH would pull its head out of the sand, it would understand that there is no benefit for the US, TODAY, to allow its currency to be the world's reserve asset. Deficits are shrinking vis a vis the world and countries like China, Japan and Germany are getting a free ride. This is not to say this international system is going to work and function for the US or others in the future. Its busted, just as it was between the World Wars.
Note how every country looking for USD reserve alternatives avoids precious metals. All want a different fiat system. Will the public allow this?
The public has no say in this, even if it did it would doubtless make the wrong decision out of ignorance. The USD will remain supreme as long as the bankers can keep it...American banksters take a cut on every domestic and foreign USD transaction, whether the US is involved or not. They will not give up this priveledge without a fight... and in fact have several long standing beefs going on and some on the front burner. USD bankster supremacy will end if peace is allowed to break out.
Only the savers have any say.
You're dumbass to not see the benefits of having the usd as the GRC.
The problems are the ZOG ABUSE that position that eventually it fires back gradually, and at present it's in the terminal stage of the GRC collapse!
Uh oh, better call MAACO.
Do you believe now that bank lobby wants USD destruction so they could survive and military complex categorically objects to that?
Do you believe me now that this may end up with few bankers assassinated if bank lobby does not surrender in peace?
If Bernstein shows up dead I'll be a believer and can I rejoice at the same time? Scratch that. I do not rejoice upon anyones' death even a bastard like Bernstein.
So this is the reason for today's gold plunge !
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.
Versus the current 1-2% inflation? What the hell are you smoking? Try 8-10%. And America can no longer afford the privilege of having the reserve currency because the government has been proven a fraud since assasinating Kennedy in 1963 and then eliminating the gold standard in August 1971.
The US has printed $5 trillion. This has been used to prop up the world's stock markets and bond markets. I don't think the world is ready for another world reserve currency.
Big bag of gold. That's all I want since I'm a saver. I don't care about no stinking clownbuck currencies with a bean counter stamp of apporoval. Big bricks of silver too.
This is like a Christian General during the Crusades of the Middle Ages calling out that Christianity is an "incovenience", a "problem", "overrrated" just as the Muslim Armies overrrun his defenses......Obama is looking for a way to explain his debacle in the currency and save his legacy (and probably his political neck)!
Jane Psaki for Vice President....she can tweet us to sleep!
The Journal of Post Keynesian Economics
I don't subscribe.
But I do pick up the Janet Yellen swimsuit issue when it comes out on the newsstand.
LOL, Fuck, thanks a lot for the visual, I just ate.
Now you'll have to eat again!
Surely you mean Keynesian Necrophilia.
Jared Bernstein is the worst form of Democrat propagandist.
It is not a currency problem leading to to less employment.
People get more from not working than from taking a lower income job.
US taxpaying workers are having the food stolen from their tables to supply it to those who believe working at any available job is too demeaning for them. Working is demeaning while pillaging the working neighbor is just fine.
Few Americans ever really work through the numbers but fact is if you can get enough from the Government in disability, unemployment, or some other kind of welfare why even jeopardize that income by thinking about taking a job. For all the moaning about how it is not enough and those living on the dole are forced into a life of poverty in fact those that suffer greatly often do so because of poor spending choices rather then the amount they receive. The article below delves into why people often choose to live a life as unemployed in America.
http://brucewilds.blogspot.com/2013/06/living-on-dole.html
I keep hearing and reading that jobs must allow people to have "dignity" to be acceptable. The curent programs have flipped that to "no job is more dignified" than a job that pays something. Let the government pillage the more productive and keep them comfortable in unemployment. Why should they have to do something for someone to help put the food on the table?
Sure, most of those in poverty made poor choices. Not necessarily bad people, just people who made poor choices in many ways. Suffering some consequences from those poor choices teaches lessons that can be passed along to the community. Telling people that the poor choices are not their fault does nothing but encourages the entitlement mentality and government pillaging.
One never learns anything from success. Failure is the only educator, thus, with the constant helping hand no learning takes place. If were to end welfare for the able bodied, our country would rise like a phoenix.
this is kind of a veiled warning to the nonbelievers that the usa might consider not being the reserve currency. and if the dollar loses the reserve status all the dollar connected countries are going to pay. that includes you so you better get on the ukraine bandwagon or we are all going down to davey jones' locker.
The only reason an insider would talk like this is if the decision has been made by the Rothschild banksters to switch things out for an SDR denominated currency.
When the dollar finally collapses, they will not permit people to repudiate their debts with inflation. They will lord those debts over us until we die or start shooting back.
An American, not US subject.
Rats jumping ship.
Swim rats, swim... (all the way out to sea).
“Strawman? De-Dollarization goes Domestic”
Strawman? Yes, the same slick double-talking brains that brought us here are going to take us to a higher level. Ha. Ha
De-Dollarization goes Domestic? Yes as planned. The de-dollarization began by destroying the tether of gold and silver as a measure of value that backed the American Dollar. There could not be more dollars in circulation than there was gold or silver backing in the vault. Gold and silver were the only reason that the dollar became the worlds currency benchmark. The multinational fascist bankster UN Empire began, there was no limit to their greed in leveraging the un-backed debt dollar. Criminal central banksters needed to grow! Damn it!
The world total financial assets are about 187 trillion dollars, yet the derivatives market alone is somewhere near 1,200 trillion dollars. I know that is insanely off-balance and can not survive.
So long, USA wealth and prosperity, we are now a third world nation and hello to the gold and silver backed currency of the BRIC nations. Mission accomplished you treasonous psycho's!
This is Obama's domestic economic policy in a nut shell. Complete and utter destruction of the US and the reserve currency. Taking the US down at the same time to just another ex world super power. Mission accomplished. Can we now charge the guy with treason?
Why waste time & money on a trial, just send the obama to ISIS without the secret service, so he can apologize in person for America's history, injustices against them, etc, etc and make peace. Then we will all have a very entertaining YouTube video from ISIS to look forward to seeing. Send all his supporters too, it will be worth the travel expense.
Can't charge a man who isn't a citizen with treason. Sorry.
Who knows, after seeing that scar on the back of his head, it's anyones guess whose brain (or what species of cortex) is in there.
That's where Michelle sticks her hand to operate the puppet directly.
(Bilderberg Meeting, 2008, VA)
"Hitlery, we could make you president. However, you could end up in prison. Bath House here is not a US citizen. If he gets caught, they can only deport him. You'll have to be SOS and run after Barry is out of office, if there is anything left to be president of."
I only wish I could just keep green posting you ... this is the nut shell with the golden goods.
+100 greens!
I don't get this.
No, our trade deficit does not change, though the value of our deficit in some other currencies may change. I also don't grok this "Triffin" thang. We're not selling gold today, and there is little evidence that foreign dollars are coming back to the US to buy much of anything. I think these theories and claims are obsolete.
The US has gotten away with monetary and fiscal murder for a generation now ONLY because being a reserve currency has PAID us at least ten trillion dollars. So is the suggestion now that we would be better off paying it back?
Here's the secret... they don't want the money back. They need 3% a year and big notation on their books that America owes them billions.
America buys weapons and protects their trade partners.
Everyone is happy
They get 3% tax-free and we have 3% inflation so that nets out zero.
Then we have another 3% dilution by the Fed. So they lose a little on every deal (and do not make it up on volume!), but they accept the 3% levy for the protection.
So why does this dufus think we can do better?
Being the world reserve currency has for years allowed us to trade worthless paper for goods and services. We have in effect exported our inflation away. Paying on all those IOUs would be painful to say the least.
The games central bankers are playing in supporting their and other currencies has reached a dangerous level, we may be in the "red zone". Currencies are important chips in the commerce of government and the business of running a country. History has shown that in the past both leaders and governments have fallen with the demise of their coin.
If people lose faith in the system it could just come crashing down around our ears. At a time when billions of dollars can be traded in just the blink of an eye imagine how fast things could go to hell. More on this subject in the article below.
http://brucewilds.blogspot.com/2013/01/currencies-games-in-danger-zone.h...
Please allow me to state the obvious, Mr. Bernstein, just in case no one else has. IF OTHER COUNTRIES NO LONGER HAVE TO BUY OUR CURRENCY TO SURPRESS THE VALUE OF THEIR OWN, WHY WOULD ANY OTHER COUNTRY BUY OUR BONDS WHEN WE ARE UP TO OUR ASSES IN DEBT? Ah, the chickens will be returning to the roost soon, I think.
The real problem is once countries sell stuff to the US they hold USD they don't want to convert to their currency and no one wants them to buy theirs. The US bond market is how they all dealt with the problem. This meant that US does not have to tax its people as hard as spending dictates. If it stops you will pay more in taxes, this prevents inflation because people will have less in their pockets. The bond market knows this and gold will fall because real inflation ( the kind the FED needs to eliminate the debt ) just is not in the cards.
Sour grapes?
The income tax payers call for an end to obama.
Wouldn't they be better served repealing the 16th amendment (that is, if it was really ever ratified)?
Inflation never has and never will create jobs.The money printing is the definition not the false dream it is creating through higher prices.Every inflationary cycle always ends in a huge bust that results in massive unemployment.The Fed has believed that it can control inflation.It can't.Once the Genie is out of the bottle,he becomes uncontrollable.That will only delay the outcome this time around.The world is at a dangerous point.All central banks have printed paper fiat debt to all time new records and it is not working.Paper currency is just junk. We were bust in 2007-08,now we're in life support and the U.S. Government is merely pulling another Japan situation.They can delay for a very long time by printing paper but it will no longer work.The world's monetary system is bust.Even James Rickards says it won't last long now.The new monetary reset is coming soon.
Did I miss it, or did this article say "nothing" about government borrowing?
Governments spend. They have just a few sources of revenue. In the beginning their revenue source was tariffs ... and that led to civil war. Now their revenue source is income tax (and to a lesser but growing extent, looking the other way in their regulation duties ... then coming back and slapping huge fines ... typically 10% of the bad actors ill-gotten-gains).
But even that isn't enough to feed our giant governments. So they borrow. But it's a silly game. They borrow from the Fed and give Fed Treasury bills in return for "money" the Fed makes up. The Fed creates accounting entries ... and a little bit what we call cash (printed by the Dept. of Treasury ... not the Fed) ... and pays government employees, contractors, suppliers, and dependents with that.
That's a trade. They've made trading promises (created money). But they never complete their trades (return the money when their trade is complete). They just roll over their trading promises ... and that is DEFAULT.
There's a governing relation for the management of any medium of exchange (MOE): INFLATION = DEFAULT - INTEREST. Almost all government spending is sourced by DEFAULTs. What taxes and other legitimate income they have goes to INTEREST payments.
And it's still not enough ... so they employ lots of people to fudge the numbers. One of the numbers they fudge is INFLATION.
It is obvious that we have INFLATION and it is obvious why we have INFLATION ... it's because of government DEFAULTS.
INFLATION has historically been about 4% per year compounded for the last 100 years. It is now higher than that (and reported by the government as lower than that). So INFLATION is the predominant source of government spending.
If you're the world's reserve currency, you can get the "whole world" to contribute to your irresponsibility. If you're just another country, you have to go bankrupt every 10 years or so ... by devaluing your currency and starting over.
It's a really ugly (and unnecessary) game from the citizens point of view.
It would be quite easy to do and is what we should have done if QE was for the economy and not for the banks. We should have used all the printed QE $ to buy gold directly. It would have forced China and all others to also buy gold (revaluing all financial assets in real asset terms) or allow their currencies to appreciate vis a vis the USD.
Still can/should do it. It is the most stable path to restoring global balance began the real and financial economies.
Not going to happen.
What a pussy. Call or an end to the foreign owned Federal Reserve. That's the fucking problem.
The problem is that not fully formed humans, children, want mommy government, but then cry like the children they are when government treats them like shit.
For 99% of the people, the image looking back at them from their bathroom mirror is the problem.
Tell that to Bernstein, the author of the article, and also one of "Them".
Leadership weights.
Servitude drowns.
It's all about benefits.
Ya tell me.
OK ... where's the punchline ?
Who listens to Obama advisors???
when the fuck did this happen?????
- Ned
Spin monkey, spin! Bernstein is a goon.
Help Mr. Wizard, I don't want to be the worlds reserve currency anymore! Ok Tuttor.....
"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"
So Bernstein was a quarter-weight in the economics realm of the political-economic zone in the administration? Joe-Bite-Me had no clue as to his "qualifications", and prob was his mouth-piece.
Usually, i don't try the ad joe bitemenium comments, but this really sucks.
- Ned
There can be no superpower in a one world government.
They are making sure America sinks.
They will also end the federal reserve and replace with a global bank.
You are absolutely right. We have gone to war before to maintain the world reserve status. Now, give it up!!
The loss of this status will be a disaster for the American Middle Class, so it must be an elitist trial balloon or a prelude to the NWO ... and knowing the current DC leadership, it is probably both.
(By the way the FED is a global bank)
and so what if its is a disaster for the american middle class, so what if usa goes the way of spain and argentina(once the richest countries in the world) and their daughters end up prostitutes, maids for the lucky few. the hubris of man kind is thinking it cant happen to them.
He is making a virtue of a necessity. Unless you think the US can go to war with Russia and China simultaneously to maintain the status of the US$, days of the US$ as the world reserve currency are over. Either the US agrees to create a currency in which they share control with the BRIC nations or they are completely left on the sidelines while the BRICS announces its own currency that leaves all the Western currencies in the dust. I believe the former plan is in execution and a case to justify it domestically is being made.
Take your pick: losing reserve currency status thanks to Putin
losing reserve currency status even without Putin
"From 2009 to 2011, Bernstein was the Chief Economist and Economic Adviser to Vice President Joe Biden"
What could this possibly mean? Did he explain to Joe how many bannanas and oranges are on the table? Did he help Joe count his crayons?
sorry about the double post
He was prolly introducing Hunter Biden to the Board of Directors for Ukraine's larges natural gas producer to save the high "demand side" prices on natural gas from Texas firms (which there were so many puts played against)....
"Putin bad"....maybe his team orchestrated the Pussy riot "attack" on him.
You know, because Putin has a corporate friendly policy and Russian citizens can send their kids to school in the UK and the U.S. now.
The USA with QE seem to be doing a good job of killing King dollar, but allowing someone close to the White House state a weak dollar policy makes me speechless. When I worked with Argentina firm, all Argentinians would go shopping before returning to take advantage of USA low prices. American consumption is about to change and I can not wait.
my guess is an event will come which puts a plug on the USAs ability to do QE or some combined event along with further QE will trigger a systemic collapse.
Shitstorm alert!
Is Austin a naive dummy or a loose cannon? I doubt it - he's been swimming with the sharks too long for that.
Is this a trial balloon of some kind, from some part of the ruling elite? Or is it an act of conscience, like what Snowden did?
The reaction, as loud voices are raised demanding (and getting) his removal, will reveal something about what's going on behind the curtain. Their game collapsing, are the gods on Olympus turning on each other? (And could it be otherwise?)
Obama will forseeably be sickening in his disavowals and condemnation of this heresy, but it is coming out of his circle and that may give a hint of who he really is, exactly which part of the ruling elite he represents. A sock puppet, sure, but exactly whose sock puppet?
Dare we hope for ... The Revolt of the Sock Puppets?
With countries around the world holding all those dollars in reserve that they suddenly don't want/need anymore, they will come flooding back home triggering massive hyperinflation. There could be no other outcome.
Global currency
What does it take to achieve such a prominent position as the one held by Mr. Bernstein?
A Harvard degree and a lobotomy no doubt.
No, we don't want all these wars just to maintain mighty dollar reserve currency status.
Wait a minute ... oh yes, we do. We love the status of our dollar in the world.
We don't want all this ISIS fearmongering. Who cares about ISIS.
Wait, we don't want ODroner not to do anyting either. He must do something.
We want ... we want... Wait.. what do we want?
I don't know about you guys and girls but I want and am going to have a cold beer or two. This site is getting too confusing for me.
*GULP*, well, we have officially been given the warning could be a couple years before it sets off. Kyle Bass did say the plan was to "kill the dollar" Oh and guess what alot of US companies will be hedged accordingly because they arent really american as much as international. Coca Cola shares might be priced in dollars but they have ceased long ago being an american company. and that is my exit strategy really, buying stocks of multinational companies and silver and companies that have to business involves producing/refining tangible products like wood/steel etc.
The elites sucked dry the dollar. Now they are going global with the SDR. In a few years the IMF and the BIS will take over any economical sovereignty. Some form of Crypto-currency ( maybe bitcoin ) anchored to the SDR will make possible to the government to know in real time and ALL THE TIME where every penny is, meaning that taxation will be supreme.
Except, the SDR would be the preferred option for the existing western (US/Euro) power structure. These same folks have fleeced the rest of the world. However, the IMF and BIS SDR plan (although it would preserve the US/Euro power structure) may not be the first choice of China, Russia, the BRICS, India, Suadi Arabia, etc.
What is interesting to me in this situation is that the US/Euro powerstructure seeems to really be pushing for the IMF BIS SDR plan NOW while they still retain power. They must be feeling the window slipping away to drive the structure of the next arrangement.....
Looks like we didn't need to kill Hussein and gadaffi after all. Oh well.
Chief Economist? Is that like Head Witchdoctor?
Fuck Kenneth Austin & his horse !
First off I think the piece is a bit misleading in saying " the government needs to drop its commitment to maintaining the dollar’s reserve-currency status." because current FED policy is not at all directed at keeping the dollar’s reserve-currency status. If they wanted that they wouldn't print like crazy to weaken the dollar in an attempt to inflate away the debt. They would keep the dollar strong while they are doing exactly the opposite.
Secondly the U.S. doesn't decide about dollar's world reserve currency, the world does. There are more dollars outside the U.S. than in. If a majority of countries decide to no longer use the dollar that will be the end. Although we are not at that point yet countries are worried about the dollars they hold and what the FED is doing with the value of these dollars. That's exactly the reason why many countries are thinking about a plan B in which the dollar is used less and less.
No other country can be blamed for this other than the U.S. itself by devaluing the dollar trough massive QE printing which in their view must be done to keep the debt payments under control. They can't let rates rise or the debt payments would drastically rise and become impossible to pay. The FED is caught between a rock and a hard place.
So this call for and end to dollar's world reserve status is just ludicrous also because it would devalue the dollar even more but maybe he likes that reading his call for a 2% to 3% inflation norm. I predict an overnight 40% to 50% devaluation of the dollar once this system collapses and dollar's status is at it's end.
Its A Wonderful Life
All this is well and good. Meanwhile you have Leo Wanta (Special Envoy To President Reagan) who under unique authorization, accumulated $30 TRILLION dollars in Principal, Capital Gains and Interest for the American Citizens and Taxpayers. These were currency gains and other investment activities accumulated during the elimination of the SOVIET BLOCK COUNTRIES and subsequently. The accumulated amount of which, partially under the heading of AmeriTrust and several other trading entities, can be verified. The MONEY was accumulated under a specific Presidential directive, for the benefit of U.S. Citizens/Taxpayers under Executive Order. How money was taken under authorization of future Administrations/individuals needs to be checked-out fully. It's important enough that he's under threat currently.
Whats more, Leo Wanta is determined to repatriate this money into the U.S. Monetary System and PAY TAXES ON IT , in order to reduce our debt and initiate a coast to coast high speed rail system.... to the tune of many $Trillions of dollars. There are some in the U.S., Politicians, that don't want this to happen. They want us deeply in DEBT. And DON'T want to give anyone credit for getting us out the the economic MESS they have created.
This amount (Capital Gain Assets and Interest) could nearly wipe out the face value of "On The Books U.S. DEBT" In the last few days it appears that some Highly, Politically connected individuals in TN have attempted to shake-him-down for anywhere between $5 and $30 Billion, in order to allow him access to money previously authorized by the highest courts in the U.S. Either pay this sum in bribes and get access OR bad things may happen.
This may seem far fetched but it isn't. What he is saying should be provable and verifiable.
A sum of this extraordinary amount would most certainly change the dynamics of what is presented here. President Reagen set up this facility to generate extraordinary CAPITAL GAIN for the United States in order to free us from the burdens of taxes and accumulating usurious debt.
Along the way, since the late 1980's various politicians have or have attempted to steal this money or ms-appropriate it for nefarious purposes.
The facts need to be ferreted out by independent research on the 'Net. The sums involved are enormous and would change our way of life, if handled correctly. Maybe that's why it's meeting much resistance. Anything good can't be allowed for the general population. If so we need to overcome this.
There are those that would like to deny these Capital Gains and interest in order to keep under the SEVERE DEBT YOKE. In the 1990's when asked about Bill Clinton buying back the 30 yr U.S. Treasuries Greenspan said "Paying off the National Debt May Not Be Good". As the Chairman of the FED, paying off the National DEBT may NOT be good. but of course they're NOT the government or the citizens but PRIVATE BANKERS whose interests conflict with ours. Our welfare conflicts with the FED, in case you haven't noticed. And of course there's the VIG, we can't forget that.
There is every reason to find out exactly where this stands and protect every aspect of these TRADES since if verifiable, it could change everything.
Leo Wanta? Really?
Is this your first week on the interwebs?
Money is imaginary.
Dream a less psychotic dream, you will feel better.
The BRICS already beat you to it chump, or perhaps you're just trying to front run Germany? France? Saudi Arabia???????
I'm going out on a limb here, but I'm guessing Mr. Bernstein's currency of choice to replace the US dollar would be...
The New Israeli Sheikal?
Progressive communist fuckin asshole. Piss off. This was the progressive plan all along. Destroy the country.
The author is crazier than a shit house rat. Worked for Joe Biden for God's sake. Lets move along to someone credible.
Is this the equivalent of "Well i didnt want to play with you anyway"?
Or perhaps the USD is going to go around telling everyone that they dumped Reserve Status or that it was mutual when we all know she kicked USD to the curb for the more attractive Yuan.
How the fuck is this guy an economist?
Born to a Jewish-American family,[4] Bernstein graduated with a Bachelors Degree in Fine Arts from the Manhattan School of Music where he studied double bass with Orin O'Brien. He earned a Masters Degree in Social Work from the Hunter College School of Social Work, and, from Columbia University, he received a Masters Degree in Philosophy and a Ph.D. in Social Welfare.
You left off: Asshole Buddy to many wall street executives.
That would explain it.
In reply to a man I am: Economics is not a science, it is a philosophy. Economics is merely the allocation and distribution of resource. The Nietzsche philosophy of “Beyond Good and Evil” is the philosophy of the elite banksters in their allocation and distribution of resource.
In short, economics my ass, the criminals are stealing us blind with their Ponce scheme.
Charles Ponzi was a philosopher ?
That argument didn't work in court either.
In reply to proofreder: Are you naive enough to think that criminals do not have a philosophy or is it that you do not understand what having a philosophy means?You speak gibberish.
The perfect guy to give away America
This guy has NO MATH in his background whatsoever. NO MATH and he helps set economic policy. Fuck him and fuck Biden.
America doesn't have a choice.
First I want to congradulate Zerohedge for being headlined on the Facebook minifeed of Fox Business today.
https://www.facebook.com/video.php?v=10152671122565238&set=vb.1279543523...
Two: Yahoo is embracing the "alarmist" BEAR crowd. Why? Because we're right.
THe Chicago Fed Reserve blathered about some arbitrary "just in time" liquidity, which prolly happens with securities lending between bailed out institutions. Prolly enabled by REPO105... from Financial Market utilities.
I wonder if we can buy $5/puts on all companies affected by this right before their missing liquidity screws A LOT of machine buyers and a few fools.
http://www.chicagofed.org/webpages/publications/policy_discussion_papers...
My idea of "just in time Liquidity" is called a stop loss market order, or a sell limit order.
And the citation that over 70% of the market's volume consists of high frequency trading platform algorithmic non-human "churning".
http://www.chicagofed.org/digital_assets/publications/chicago_fed_letter...
A full round of fist bumps is in order. Followed by an transgender LGBT group hug.
"In other words... our plan is working"
Long live Cloward/Piven!
"Forward, Comrades!"
Barry: Bill, I've done everything you suggested.
Bill Ayers: It's working great, my friend. Soon, the US will reside in the dustbin of history.
Barry: I hate America.
Bill: I hate it more.
Barry: Not more than me!
Bill: Yes I do! I was blowing up cops when you were just a young sexual victim of Frank Davis.
Barry: Well, you don't have to get personal.
Bill: Sorry. Hey! I have a US flag in my pocket! Let's go out back and burn it!
Barry: Cool!
Interesting.
So, while the rest of the world led by Russia and China and the BRICS in general are in the process of de-dollarizing and initiating bi-lateral, tri-lateral, multi-lateral and regional currency (non-US Dollar) swap agreements, and while the percentage of global reserves represented by US Dollars continues to fall, and while the percentage of global transactional value conducted in US Dollars also falls, the new progressive spin on the situation is now emerging.......
One small (sarc) omission from Mr. Bernstein's article is the fact that the FED now holds more US Treasury securities than any country on the planet inlcuding the number 2 holder, China. And, this amount is perpetually growing....
Mr. Bernstein seems to fail to grasp (or chooses to conspicuously ignore) that the US having global reserve currency status has uniquely allowed the US FED to print unlimited quantities of US Dollars and monetize copious amounts of US Dollar debt. No other country can do this. While Mr. Bernstein's "analysis" is based on a closed loop of global income, global savings, global production, global consumption, etc., nowhere does Mr. Bernstein address or discuss the FED's monetization of several trillion US Dollars worth of US Treasuries.... Thus, the global financial system is not a neat closed loop. Rather, it might be a neat closed loop for every other country on the planet except the US, but the US enjoys (currently) the unique ability to print and monetize unlimited amounts of US Dollars.
So, now it begins....the progressive neo-Keynesian spin....we've been doing the world a favor to our own detriment by providing the world's reserve currency for the last 7 decades (taking one for the team)....we've lost jobs and generated both trade and budget deficits as a result (unsung heroes)....our inflation rate is too low for job growth (hamstrung by the constraints of our leadership role)....so, now is the time give up our reserve currency status (for the sake of the US).....
Inflation rates won't be 2-3% if the US loses reserve currency status...especially with the existing overhang of US dollars and the interest rates won't be low either....
But hey, fear not, we've got this under control....
Tyler, thank you for putting the article here.
I rate it five stars for knowing such content is now carried out in one of the Wall Street's largest media... and The New York Times (NYT) is one of the most reputable one among the many guns they have.
Such affirmation may mean nothing for ZH readers yet it still carries some weight toward the sheep people.
Well, some thing big is really coming... get ready and have fun
I will appreciate more if some one discusses in more great details what's the consequence for the holder to abandon the global reserve currency status beside the simple notions of higher inflation and increased bond interests?
For example, the consequences of dropping out the status of GRC on:
Largely ridiculous oversimplication and rambling nonsense from someone who would even pass a master's in economics. He has a few valid general points but the US won't give up the dollar as reserve currency until it loses a large-sized military conflict and/or its key economic allies who banks are highly interwined (Japan or EU) collapse financially.
I have no doubt the US will pursue policies that pursue draconian policies if necessary to keep the dollar reserve currency. It comes to the US having roughly ~5% of the global populaton and using 25-35% of its resources depending upon what category you are measuring. If the dollar loses the reserve currency, that ends in near short-term fashion with likely high negative results.
Primary reasons the US trade deficit have exploded aren't the dollar global reserve trade status either. They are the structure of the global trade agreements starting with GATT/NAFTA since the early 90s/end of the Cold War and allow greater access to the US market as a foreign policy tool (see the '85 Plaza Accords).
Almost nobody left in the GOP or Democrat party who legimiately defends American interests anymore. Just various whores for different large-moneyed interests.
it's not like i said farewell, adios, alvedazane like others before me have done....
but- i did have to sign in again just to ask, since i musta missed it the first time around....
but- this time i went a googlin', and i'm still lost-
WHAT THE FUCK IS A SHITGUMS! AND/OR WHAT THE FUCK DID IT DOO TO THE ECONOMY!!!!
google provides little answer-
https://www.google.com/search?q=shitgums&rlz=1C1RNCM_enUS336US593&oq=shi...
even shitgums zerohedge doesn't really help-
https://www.google.com/search?q=shitgums&rlz=1C1RNCM_enUS336US593&oq=shi...
(and i admit equally in the dark when it comes to "blobbering up".....)
but i used to come here for answers to some deep inquiries..... this place is hedge.2 now and it ain't worth doo-doo.
Unlax, Dude - it's just SHOTGUN misspelled.
Never attribute to conspiracy what can be explained by sheer incompetence and stupidity.
oh yeah. thnx dude. i need a proofreader. any help with the blubberring up?
Never trust anyone who gives you some truth, but also lies to you.
Remember this Oldie but Goldie from a year or so back?
US Official to Kyle Bass: "We are going to Kill the Dollar."
Saw Bernstein on Kudlow many tmes and thought he had no concept of finances. Just lib blather. Larry Kudlow was disappointing because although at first he saw the moral hazards of tarp and stimulus he eventually caved and started shouting PRINT BEN PRINT!!
This is like a kid saying nah I never wanted all that free ice cream the shop keeper was giving me --- after the shop keeper stopped giving him the free ice cream
The US knows the writing is on the wall --- the USD is DEAD. They are simply prepping the masses
Better get in line. Seems ZH has been sold. Op-ed from the NY Times?
I thought the US main export product was dollars. Just print some currency and we will trade against freezers, cars, iphones and so on. That must have been really tough for you guys!
The U-S doesn't have to worry about the dollar losing prime status. That is already a mathematical and historical certainty. The US gov't already knows the dollar is dogshit, which is why gold is being suppressed. The U-S is more bankrupt than any other nation and everyone knows it. The current gov't in charge is hellbent on destroying this nation, and everyone knows it. The U-S and the dollar and this nation's prestige are in the toilet, and everyone knows it. This article seems to be a pre-emptive explanation for the sheeple when everything finally blows up.
I wouldn't call a nation with 20 aircraft carriers bankrupt.
The U-S bought those aircraft carriers with money borrowed, meaning wealth stolen, from generations 100 years into the future. I'd call that bankrupt. Commie socialist libs would call that prosperity.
A high dosage of global trade flows to support his argument. What about investment flows that are not just consequences of trade flows.
Look more like the fear emanating from the BS that BRICS are not buying and they can act with alacrity in dumping dollars. It has long been the establishment induced sell that dollar dumping will hurt them more than it hurt us. True only to the extent that when you are assured that some discipline in place to retain value for dollar holders.
A highly possible scenario is that a detente reached with China to hold the dollar with favored collaterals and testing the dumping with a proxy like the Euro. There is no eternal enemy just Business.
So, if at the end of WWII -- at the beginning of the Age of Exports -- the US had eschewed the role of reserve currency for the dollar, everything would be mashed potatoes and gravy for us now.
"Of all sad words of tongue or pen...."
special promo end of world - collapse - obozo chazing : 10% discount on the ruger 10/22 if you take a 5000 ammo pack
yipika yeeee mother fucker
It's easy to talk about the cold when you're close to the fire.
would you notice that by doin so, they look like the oracles...
between us, i agree this is very pathetic, BUT, might it be the start of the change...?
This certainly looks like some paint being put upon a crack in the façade. Whether this represents a crack itself or even the one preceding the breaking of the dam I honestly have no idea. We'll see.
The Empire is built on global slavery and theft that are enforced by both USD and unclear weaponry. End of the Empire voluntarily by Washington? I don't believe what they say. In fact, what they mean is precisely the opposite of what they say, all the time.
his reasoning is like getting rid of the golden goose because its shit stinks.
There is a better way:
http://www.reddit.com/r/todayilearned/comments/2fv558/til_by_distributin...
This article is nothing more than "a tale told by an idiot full of sound and fury signifying nothing" attempting to blame the dollar's reserve status on totally inept macro economic policy. Soon we'll blame the full moon for the flood in Phoenix. Bankers and the Fed have destroyed the value of the dollar for the next 3 generations this is just pure deflection . . . and bullshit.
there are very few things the federal government is supposed to do .... ONE OF THEM IS TO PROVIDE A STRONG CURRENCY.... The libtards have things so upside down it is incredible. Few of the other things: DEFEND THE BORDER, A STRONG MILITARY (not to be used to fight ebola in africa), ENFORCE THE LAWS ACROSS THE BOARD (not selectively)...
So do us all a favor and read the CONSTITUTION... and great job on the MIDDLE CLASS...
This guy is NOT an "economist." He majored in music and social work. The idea that this guy should be listened to regarding economic matters is absurd. But then, what about the Keynesians isn't?
While global reserve status does prop up the dollar and reduce our exports, our organized crime Jesuit rulers depend on the Fiat status of the dollar to secretly enrich themselves and stay in power. The Fiat dollar status enables our Jesuit rulers to counterfeit our currency. And because of the dollar global reserve status we can hide the bodies (counterfeited money) out in the global economy. This way we can export the inflation and not have to suffer it at home.
This is why we concocted Pearl Harbor in order to replace the reserve British pound in 1944 with the dollar in order to set up a global counterfeiting ring by our Jesuit organized crime rulers. Roosevelt made a back room deal with Churchill to gain reserve status for the dollar at Bretton Woods. The dollar reserve and Petrodollar status enables our Jesuit rulers to manipulate interest rates, Treasury bonds, gold price, stock market and control the world economy.
While reserve dollar status has a minor inflating effect on our export prices, The reason we cannot manufacture and export products any longer is because our labor and big government regulatory costs make us uncompetitive. And that gets back to the Jesuit poisoning agenda to control us that makes our medical and nanny-state regulatory costs excessive and uncompetitive.
To be specific, the fluoride, vaccines, GMO food, aspertame, pesticides and many more poisons that our hidden Jesuit rulers are poisoning the public with in order to disable our health in order to control us are driving the obesity, diabetis, heart disease and other afflictions that make our medical costs far excessive to be competitive. Toxic injury produces low IQ, anxiety, depression, lethargy and a blind allegiance to the establishment. This also results in a public demand for expensive big government regulation to keep us all safe.
In the meantime, the Chinese use mostly cheap herbal medicine and they just banned toxic GMO foods in their chicken, cattle and people food. They don't poison their people with toxic fluoridated water, vaccines, aspertame and others. They get it. Americans are an extinct species since they allowed their country to be taken over by a foreign organized crime cabal posing as a religious order in 1913 with the Fed Act.
It should be pointed out that Jared has his PHD in Social Welfare from Columbia. His anti business and share the wealth view of the world is well know.
Jared Bernstein books are available on Amazon for $1.89, but toliet paper is cheaper.....
How The U.S. Dollar Reserve Currency Dies… Slowly At First, Then All At Once
By any objective measure Reserve Currencies — particularly the US dollar — are dying.
The question most analysts get when discussing the reality of the US and world economic/financial situations is, if things are so dire, why doesn’t it feel like it? (***see dire links below )
If all the facts stated about $6 trillion annual (GAAP basis) US budget deficits or US government total debt and obligations in excess of $90 trillion are true, why does the system still “function”???
Social Security recipients receive checks, the military is still paid, the garbage gets picked up, and stores still have stocked shelves. Life seems hectic but generally “normal”. So, is there a problem at all and if so, when and how will it go from theoretical to reality?
[...]
IMPLICATIONS
The minority of Americans with assets see their value rise but the majority will get much poorer…those dependent on wages and social programs (generally younger, with families, retirees living on SS, etc.) absent assets are made dramatically poorer (wages stagnant while costs rise…rent, food, insurance, school, fuel, etc.). The economy suffers as consumers lose ground and inequality runs rampant. How it plays out from there is impossible to know as supply and demand implications are met with 2nd derivative government reactions and on and on and on. Beyond that, it’s all just plain guesses with little historical precedence to guide us.
Of course there are many steps and actions that could be taken to acknowledge our challenges and collectively address them through shared sacrifice and a long term restructuring of our economy. But the 4+ decade trend of fraudulent accounting, financialization, and, well, like a hundred other trends that need be reversed seem unlikely to be voluntarily addressed. Prepare for the solution to be involuntarily applied in a time and manner not of our choosing.
Read the rest here.
(Reuters) - Russia and China pledged on Tuesday to settle more bilateral trade in rouble and yuan and to enhance cooperation between banks, Russia's First Deputy Prime Minister Igor Shuvalov said, as Moscow seeks to cushion the effects of Western economic sanctions.
Shuvalov told reporters in Beijing that he had agreed an economic cooperation pact with China's Vice Premier Zhang Gaoli that included boosting use of the rouble and yuan for trade transactions.
The pact also lets Russian banks set up accounts with Chinese banks, and makes provisions for Russian companies to seek loans from Chinese firms.
"We are not going to break old contracts, most of which were denominated in dollars," Shuvalov said through an interpreter.
"But, we're going to encourage companies from the two countries to settle more in localcurrencies, to avoid using a currency from a third country."
http://www.reuters.com/article/2014/09/09/us-china-russia-idUSKBN0H40X02...
The author of this article will soon sufer a tragic deadly accidental fall from a high window (similar to these mid level bankers) in 3...2...1...
Willful and intentional debauching of the currency? Can anyone say high and treasonous felony crime?
How about progressive policy in action=high and treasonous crime?
Can we get some arrests here please? We are waaaaaaaaaaaaaay past impeachment.
The FEDGOV has gone rogue, lawless and is illegitimate. It must be stopped now.
Grimaldus
Aside from being a career bureaucrat:
Bernstein graduated with a Bachelors Degree in Fine Arts from the Manhattan School of Music where he studied double bass with Orin O'Brien. He earned a Masters Degree in Social Work from the Hunter College School of Social Work, and, from Columbia University, he received a Masters Degree in Philosophy and a Ph.D. in Social Welfare.
What the fudge makes him a credible commenter on the dismal science.
What a hack, ignorant, presumptuous article......
"...what was once a privilege is now a burden..."
or in the more common vernacular, "....nobody could have seen this coming..."
;suck it Jared.
dollar reserve currency, that doesn't even come up at fed. meetings, brics is first, ecb is second, imf is third. and japan is forth.
until americans, and the rest of the worlds population under stands bis, imf, ecb, the fed, and all central banks operating in your country are owned privately by the .000000000001%.
the fed., a catchy name, 98% of americans thinks it's an american govt. enity, it's not, it's a privatly owned bank.
when the fed. meets, it's not 100% of whats best for america.
the bis who is in reality of higher authority than the fed., you talk about buying politicians, the bis is buying america through the fed..
their end game is a global currency with them in complete control.
the bis has given the job of bleeding americans, americas corp.'s, and all other businesses of their assets, plain and simple.
the bis has given the job of bleeding the eu, to the ecb.