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Strategies & Market Trends : The coming US dollar crisis -- Ignore unavailable to you. Want to Upgrade?

To: axial who wrote (19289)	3/30/2009 2:35:49 AM
From: RJA_	1 Recommendation Read Replies (1) \| Respond to of 71454

IMHO: This is not a banking crisis. This is a currency crisis masquerading as a banking crisis. If dollars were gold based (as pre 1933) any doubt whether all these bail outs would happen? No chance. It happens now because its all printed up funny money. I think we are about to have the worst inflation any of us has ever experienced. The dollar will be replaced as a reserve currency. Its really too bad no one in this administration gets it. It does not have to happen, but it will because these very mistaken people are in control. Bernanke, and Geithner. And now, Obama, because it is happening on his watch... and he is enabling it. From a Merkel interview in the financial times: She is robustly unapologetic when discussing the origin of the global financial meltdown. The fault, she says, ultimately lies with misguided efforts in the US, both by the government and the Federal Reserve, to re-start artificially the economy after September 11 by pumping ever-cheaper money into the financial system. “We must look at the causes of this crisis. It happened because we were living beyond our means. After the Asian crisis [of 1997] and after 9/11, governments encouraged risk-taking in order to boost growth. We cannot repeat this mistake. We must anchor growth on firmer ground.” She is sceptical about calls for bigger public deficits and looser monetary policies – the very things that tipped the world economy into the abyss in the first place – as the way out of the crisis. “The crisis did not take place because we were spending too little but because we were spending too much to create growth that was not sustainable. It isn’t just that the banks took over too many risks. Governments allowed them to do so by neglecting to set the necessary [financial market] rules and, for instance in the US, by increasing the money supply too much.” Hence Ms Merkel’s oft-repeated insistence that governments, as they fight the crisis, must also start to think about their “exit strategies” – a return to fiscal discipline, a dismantling of protectionist measures, and mopping up of excess liquidity. ‘We are coming together to make joint decisions, not to compete against each other’ Merkel on working with US The debate about the possible inflationary side-effects of measures taken to tackle the crisis “is something I am taking very seriously”, she said. “As head of the German government, I am most concerned by the debate in Germany, where people are worried about accumulating debt, and about the possible inflationary consequences.” Markets, she added, “expect to see a return to sustainable fiscal policies after the crisis”. Asked about the failure of a government bond auction in the UK this week, she stopped for a long pause, and chose her words with great care: “It shows states cannot borrow forever,” she said. ft.com

To: axial who wrote (19289)	3/30/2009 3:29:32 AM
From: NOW	1 Recommendation Read Replies (1) \| Respond to of 71454

<And I can't see any reason why Obama would "buy in" to the danger unless he too was convinced it was real.> and if you cant see that, then heaven help you

To: axial who wrote (19289)	3/30/2009 11:18:40 AM
From: GST	16 Recommendations Read Replies (2) \| Respond to of 71454

<Nevertheless, you want the banks to fail, the businesses like GM and Chrysler to crash, and the US to walk away from its derivative obligations> I don't want GM and Chrysler to fail -- they have done a spectacular job of that themselves. The answer for both companies is bankruptcy -- wiping out the value of their stock, their debt and their promises to their employees. The only question then is what chance they have to emerge from bankruptcy. If they go bankrupt they have a chance to survive -- otherwise it is highly unlikely. As for the second part of what you said <"US to walk away from its derivative obligations"> the US does not have any derivative obligations. Derivatives are not insured by the US government -- we don't even get to know who owes who what as it stands now. Paying off these gambling debts is no more legitimate, necessary or wise than paying off gambling debts for fat losers in Vegas. And if banks fail we have an extremely effective method of dealing with them -- the FDIC. If you have been around long enough you will remember the last time the FDIC had to act to step in and take over hundreds of financial institutions, wipe out their equity and send some people to jail, It is when you fail to do that that you will have a Japan style decades long economic water torture, with zombie banks run by the same old gang of incompetents and crooks doing nothing to help your economy while putting all their efforts into surviving -- albeit surviving as the living dead -- however dysfunctional that might be for society. We are not on te road to recovery -- we are on the road to endless debt, stagnation and decline. The responsibility of the US government is to the people -- not the corporations and investors. If we need to do things for people by racking up god-awful debts for a time, so be it. But to bail out crooks and incompetents to keep them at the helm of our economic ship and to keep their companies 'alive' -- that is indeed the road to ruin.

To: axial who wrote (19289)	3/30/2009 11:29:52 AM
From: benwood	3 Recommendations Read Replies (1) \| Respond to of 71454

For many politicians, the consequence they so fear is the drying up of campaign contributions and the eventual possible loss of their taxpayer-supported job. For us, the consequence of their dysfunctional behavior is the unfolding crisis which may destroy the foundations of our economy and hurl us into the bin of third world countries. There are so few of them; there are so many of us. What a shame that people can be counted on to behave in this predictable manner.