This page has been archived and commenting is disabled.
Is This The Most Important Chart For The Future Of The World's Reserve Currency?
When it comes to the future of the dollar status as the world's reserve currency, the most important chart may be the fact that the US is now so woefully buried in debt that another global military conflict appears inevitable...
... or that it now takes virtually unlimited monetization of the debt shown above to preserve the illusion that the US is not bankrupt, pushing the S&P to record highs in the process...
... or that the marginal impact of every additional dollar in new debt generates increasingly less economic growth?
Indeed, the "most important chart" may very well be any of the above, but in our view the one chart which, both literally and metaphorically, will determine how much longer the USD will reign as the world's reserve, is the following.
»
- 80543 reads
- Printer-friendly version
- Send to friend
- advertisements -
The first chart almost says it all. And it probably reflects a similar pattern for most, if not all, previous empires when their fiat money system tanks and spins irretrievably out of control into a vortex.
However, in this case, one would also expect to see the size of US army rising in preparation for a new war, but it doesn't. So what gives? Will the West's WWIII be fought by privatised boots (not shown in the chart) or drones or ...?
cue fight against ISIS : bombers + local proxy warriors on the ground. Few risks for US lives, good strategic results...
Next wars will consist in :
a- destruction of the main military assets of the opponents
b- local allied occupation force gaining traction once the most militarized opponent has been sufficiently weakened
The war in Afghanistan was of necessity to capture Ben Laden (before become a face-saving exercise), but the war in Irak, and especially its occupation, was a strategic error. Even is the goal was just to foster chaos in middle-east, it would have sufficed to defeat Saddam Hussein and his main troops, and lt the civil war take its toll.
The main problem is the world has stopped using US Fed Reserve Dollars to buy the things they need. The world shackles have been cut.
The magic has stopped. Therefore USA can't conjure up free Dollars to plunder the world. USA imports/shopping will no-longer be free anywhere in the world.
Other Countries have cut-out the Fed Dollar as the mandatory unfair middle-man. The mandatory force that ordered the use of fiat Fed Dollars by every single Country is ceasing.
The main problem now is the huge USA Military might who policed the world (to make sure the Cabal Dollars were used by everyone and stored by Central Banks for loans) is over. The world no-longer wishes to pay for the USA Military might. Somehow the UN seems to have taken-over.
How is this incredible USA Military cost going to be paid for in the future? Who will pay their wages and supply costs? How are the Military perceiving this news?
The Cabal have been caught-out.
Public debt expansion in the past happened BECAUSE of war, not viceversa. The war is now likely, but for other reasons: Japan is bust, China is slowing down and becoming more assertive, Brazil is goin backwards, Putin is a trigger-happy psycho who controls a major military superpower, Middle East is burning and has public finance issues due to low oil prices, Europe has integration troubles that will take decades to solve and the US is living a fake recovery and it's run by the neokeynesians... A global conflict would be a wonderful excuse to brute-force many of the aforementioned problems.
In addition to that, we're getting into more and more capital-intensive industries to generate growth, it's natural to have more capital around. By the way, longer life expectancy means that people are saving more, everyone's chasing returns and therefore returns are getting lower and lower. So more debt at a cheaper rate to finance companies in new, riskier but more rewarding industries (and/or speculation). Forget decent returns for the next few centuries, capital scarcity is a thing of the past... Unless there's capital destruction through war, of course.
Good post until you myopically attacked Putin and mischaracterized him. His overt restraint in the face of Obama's disinformation campaign puts you in the MSM camp either as a shill, a misguided citizen or a dupe. It's doubtful ANY American politician up to this point would have been capable of showing the good sense to keep us out of the next World War, given it was Russia initiating and advocating the overthrow of Canada or Mexico.
This bloke cannot be THAT obviously misinformed to attack Putin and NOT include the multitude of o'bominations we have in offices over here. Any informed, rational individual would have more respect for Putin than the obvious muslo-communist we have in the black house here.
. ....... it must be one of those pesky government PSYOPS bots or guy whose sole purpose is to sway public opinion on sites such as these. The only question I have is if he works for a contractor, an alphabet agency or DoD.
... or that it now takes virtually unlimited monetization of the debt
The single most important point made in this article, the conversion of securities bartered to currency exchanged in the form of T-bills. The outright theft of the assets of the common man by removing his access to participating in the deflation of assets and the inflation of debt.
Military expedititures going down but militarization for domestic preparations going way up. Do armed Dept. of Education, Dept. of Agriculture, USPS, and IRS jackboots count? Is a civil war a "war" war?
Assuming the GDP is anything more than a garbage number. According to the BLS, 60,000 US factories close in a decade or two, tens of millions of high paying middle class jobs shipped overseas, but the GDP still increased. Yah.
Forget Debt as a Percentage of GDP, It's Really Much Worse:
US Debt to Income in 2010: 408%
http://www.forbes.com/sites/jeffreydorfman/2014/07/12/forget-debt-as-a-percent-of-gdp-its-really-much-worse/
That's only counting the actual Army...if you include all the mercs, contractors, and drones, it's higher than '66.
The last chart is incorrect.
Target end strength following the QDR in 1993 was 400,000
The current projected end strength is ABOVE the Army end strength as it existed throughout the 1990's.
......a kinder, gentler armed force.
And may the Farce be with you......
Lousy chart dropping the 0.0 - 0.3 segment. It's so easy to make bar charts look more or less significant by manipulation.
It would have been more honest to simply show the chart starting at zero.
No war no economy....