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Is The Credibility Bubble Bursting?
Submitted by John Rubino via Dollar Collapse blog,
In a fiat currency system, perception is, by definition, everything. Paper money has no intrinsic value. So the people saving it and accepting it in exchange aren’t expressing faith in the money itself but in the competence and honesty — and power — of the institutions managing it. Let that faith erode and those slips of colored paper and ephemeral computer bits revert to their intrinsic value.
And on the credibility front, the trends aren’t encouraging. Consider the coverage of this weekend’s Washington DC meetings of the International Monetary Fund and World Bank, two global financial institutions that the US dominates. From the New York Times:
At global economic gathering, concerns that US is ceding its leadership role
This article is available only to subscribers, but a similar one from India’s Business Standard makes many of the same points:
US primacy seen ebbing at global meet
As world leaders converge here for their semiannual trek to the capital of what is still the world’s most powerful economy, concern is rising in many quarters that the United States is retreating from global economic leadership just when it is needed most.
The spring meetings of the International Monetary Fund and World Bank have filled Washington with motorcades and traffic jams and loaded the schedules of President Obama and Treasury Secretary Jacob J Lew. But they have also highlighted what some in Washington and around the world see as a United States government so bitterly divided that it is on the verge of ceding the global economic stage it built at the end of World War II and has largely directed ever since.
“It’s almost handing over legitimacy to the rising powers,” Arvind Subramanian, the chief economic adviser to the government of India, said of the United States in an interview. “People can’t be too public about these things, but I would argue this is the single most important issue of these spring meetings.”
Other officials attending the meetings this week, speaking on the condition of anonymity, agreed that the role of the United States around the world was at the top of their concerns.
Washington’s retreat is not so much by intent, Mr. Subramanian said, but a result of dysfunction and a lack of resources to project economic power the way it once did. Because of tight budgets and competing financial demands, the United States is less able to maintain its economic power, and because of political infighting, it has been unable to formally share it either.
Experts say that is giving rise to a more chaotic global shift, especially toward China, which even Obama administration officials worry is extending its economic influence in Asia and elsewhere without following the higher standards for environmental protection, worker rights and business transparency that have become the norms among Western institutions.
And check out this exchange on CNBC’s Fast Money traders roundtable:
Suddenly it’s okay, even on CNBC, to question not just Fed policy but the character of its chairmen.
What’s important here isn’t the sentiment but the source. Peter Schiff or Gerald Celente can point out America’s moral and technical dysfunction all day long, but by now they’re mostly just preaching to the choir. The New York Times and CNBC, however, are virtual branches of the US government, trading in access to the folks running the big institutions and profiting from the latter’s machinations. If the government loses them, it loses everything.
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When you're desperate for that next fix and it's 4:30 in the morning, does it really matter how trustworthy the dealer is?
My first FU at ZH!
He's a guy without a conscience.
Welcome brother. But for the record, the appropriate expression is...
FUCK YOU BERNANKE!!!!!!
thanks for the tip.
I'm new at it.
and for the record, that's not me complaining, but simply passing on the feelings of all the kids he's shared in the responsibility for killing, maiming and poisining with DU.
All caps and the extra exclamation marks make all thee difference. And on Ben Shalom, I'm with you bro. I came into my prime earning years just as Housing Bubble 1.0 was popping. I had been disciplined and saved and right as I was trying to time the market (narrowly missed out on an auction sale in 2012) this asshole went full retard with the QE. Purposefully locked out end buyers from foreclosures so they could put a floor under prices and rents.
For the first time in my life, I began to know really... Violent thoughts. - Antonio Salieri
".......without following the higher standards for environmental protection, worker rights and business transparency that have become the norms among Western institutions".
Yeah, right! It seems like the Financial Comedy media are the same all over the world.
Another example:
"(Other officials)... agreed that the role of the United States around the world was at the top of their concerns".
Might perhaps more accurately have been written as "The United States ia no longer there to salvage the Global mess that the Financial Oppression it created when now most needed".
In a depressed economy, which I believe we are definitely sliding into more & more each day, nobody wins, and that's a fact jack....
(Everyone is broke & it ain't no joke)
And just for good measure:
FUCK YOU YELLEN!!!!!
There speaks a man who never had his smack cut with strychnine.
It's after 0430 somewhere
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do... www.globe-report.com
Anybody who thinks "The Fed" chairman who gets paid $250,000 a year has ANY say in how TRILLIONS of dollars are being spent is buying into a very large fairy tale.
>Dollar stinky
>Few years left
Doing my part. I buy roughly equal dollar amounts of gold and silver each month.
Somewhere, there is a tipping point.
The alternative:
As BRICS are in the processes to decouple economies from the Western neoliberal monetary monopoly, they could bring back the gold standard as a base for their transactions, which is much more steady than the paper money unstable financial bubbles. They are ready, because they are emerging economies with billions of potential consumer tanks and can attract other countries too being victims of the international financial mafia, like Argentina and Greece.
Actually fiat money has intrinsic value in the sense that the Private Central Banks who issue money on behalf of supposedly sovereign governments can tax the future labor of the people.
So the "money" [debt] is an iou that is payable on the back of your future labor. Go figure.
Problem is, the debt is too large to ever be repaid and it works out to something like a billion years of future labor and rising.
No, the word "intrinsic" means the value does not depend on something outside of the coin itself. Fiat currency has no intrinsic value. The government that issues it may not be in power to extract labor from its slaves to pay it off. There is a value, it has associated political risk, and it is not intrinsic.
normal people could give a flying fuck,
deal with that limitation.
"Ceding power" suggests that there is anything the US can do about it. It can't.
Lose confidence in our Jewish masters to print money? No fuckin way.
Credibility of ZH?..
Lol.
Oh calm the frig down ..it was a joke.
The rolling off the table trajectory of "full faith & credit" in debt money is directly traceable to those who presumed the people would accept the destruction of their wages & savings, the very value of their labor and do nothing out of patriotism.
Foolish inflationist mortals ;-)
If I were the ex-ChairSatan I would be in hiding by now.
there is a battle for the heart and soul of the usa. on the one side there are the neocon dual citizens set on making th usa their bitch in a quest to dominate the world. just recently the opposition has gained traction and the threat of the neocons was greatly diminished by the iran deal. the neocons will not sit quietly watching their relevance disappear. they will do something and it will involve killing many americans with blame pointed at iran. they are simpletons in their transparency. there are enough people now who know the evil of nutandyahoo and israel conspiring with their usa agents in congress and the bureaucracy, and the banks, that another false flag will likely be blamed upon them immediately by enough people that the mission may backfire in their face. the usa can't lead the world until it fixes itself.
in the meantime, we have, as american citizens, an ally in putin who is willing to do what the american people are unwilling to do so far, end the neocon madness.
Oh yeah, CNBC is going to blow this whole thing wide open, LMAO! It's more theater for the dumb Goy so that he can decide to tune in again and get the "truth".
Is Credibility Bubble Bursting?
Just take all available verifiable and quantifiable data and
divide by
the fact that you can never underestimate the intelligence of the masses.
Answer: Bubbles? I love bubbles! Who doesn`t love bubbles?
Do not love the bubble, that is impossible, rather try to realize the truth...
There is no bubble.
It is not the bubble that pops, it is only the masses that pop.
And when the levee breaks, well, there will be hell to pay.... (Tip: Invest in pitchforks now...)
I'm not sure that pitchforks wotk that well when the levee breaks.
Sandbags, maybe, or a backhoe. But I do get your point.
I look forward to the day when we get a real man in the White House like Hitlary Clinton to fix everything. Don't worry, CNBS and the Times will fall right back in line covering up the lie. Every once in a blue moon they let the truth shine through in order to seem legitimate, but make no mistake they will do or say whatever it takes to protect the system.
this doesn't read like someone decrying usa naked imperialism but rather someone trying to goad the banksters into giving him a no down no doc loan.
Article makes no sense to me. We are losing leadership just because we are fighting and do not have a jack off Krugman stimulus.
US economy is a fraud, but less so than Europe, China or Japan.
Credible or not, bubbles always burst and this one will burst with incredible ferocity. The largest debt bubble in U.S. history is bursting and an analysis of bubbles makes the process undeniable....
http://www.globaldeflationnews.com/anatomy-of-a-bubble-how-the-federal-r...
FUCK YOU BERNANKE!!!!!!!
If anyone could build a DeathStar it is Citadel!
FU BB!
When AU is 2400, then we'll talk about credibility problems. Until then, this is all just talking head pablam.
"...higher standards for environmental protection, worker rights and business transparency..." Really?
According to the street? Greenspan????? Bernanke: ???
Mmmk. I've seen less chaos and confusion on a Geraldo Rivera episode. What a Kabuki joke.
And people use this venue as a means for investing their productive efforts?
Wow.
All currencies are fiat or by decree.
Yield rates have been dropping for 34 years...Why?
The net consumers of yield have been imploding the net producers of yield down towards the absolute 0 point to supply power to the demand for power by the explosion of net consumers up towards the absolute 1 point.
When the singularity is reached...there will be a polarity shift...
Kiss the Internet goodbye and everything else you all take for granted
It isn't that mysterious really. The media you mention are controlled by the usual suspects, hence are mouthpieces for the Banksters. Therefore they are not beholden to the government but in fact are the stick and carrot used to put pressure on government policies and keep them herded as well as keeping the flock under control too. Thus when as now the US government is not acting according to the requirements of the real masters, they can be punished and pulled into line or as the case may be, when the USA is due for the coup de grace the media will be the one to administer it. Given the US econonmy is just about sucked dry of real wealth, the time for it to be put down and out of its misery is upon us. I suspect that the Whitehoiuse is dragging its feet a bit in starting a war with Russia so the media gloves are off and as said, the time for the US to be put down like a rabid dog or an old hound at the end of it's useful life has arrived too. The same banksters who have until now been the real masters of the USA have already set up shop in China and are more or less done with you. That countries like the UK and others including my Australia have signed onto the new Chinese dominated bank is in fact just the banksetrs opening up a pathway to allow them to most easily siphon of the last of our wealth in the West and transfer it to their new digs in the East. I'm in the East right now and here in the hotel I'm at are lots of people who msake my case clearly. The Chinese delegation currently in Pakistan headed by Xi Jinping has a following of Western business interests and bankers that you would have to see to believe. I know because I just came from a little get together here at the hotel with some of them.