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

To: axial who wrote (20893)	6/19/2009 5:56:30 PM
From: GST	1 Recommendation Read Replies (1) \| Respond to of 71456

<Money won't have an inflationary effect until it enters the economy. That requires re-establishment of normal flows. A hundred trillion USD that never gets out of the vault is not inflationary.> We don't have any 'money' -- we have debts to foreigners. Everything we do requires borrowing from somebody who actually has 'money' -- every war, every social program, every car, every house. The problem is that we are unable to pay them back with 'money'. And they do not want to lend us any more of their 'money' so that we can pay for our current operating deficits with their 'money' -- much less lend us their 'money' to pay interest on what we already owe them. We don't have 'money in the vault'. We can't borrow money. We can't pay our bills. We are flat broke. We are in bankruptcy court -- with no viable plan for reorganization. Our future creditors will set our prices, and they don't discount prices for deadbeat debtors. Those are the 'facts'. Prices will not be determined by fictitious 'money' in our fictitious 'banks'. Prices will be set by people who will think twice before lending us a dime, and they will think twice before they sell us anything at any price -- because we are deadbeats. They don't want our business any more. We are their poor cousins -- the ones with teeth missing and a poor education living in a mobile home with rent to own furniture and a recent bankruptcy blackening their credit rating. There is no 'normal' to which we can return. Things have not been normal for a long long time. Now we face the consequences -- and the consequences of being flat broke are going to be with us for a very long time. But no matter how poor we become -- the days when we could count on cheap this and cheap that from our 'friends' overseas are gone. We, the United States of America, are bankrupt. Now we will pay. We will pay the price that all those who go bankrupt pay -- we will lose our access to credit. We will lose our ability to negotiate prices. We will lose control of our assets. Our assets will be confiscated and sold and we will see a sharp drop in our level of consumption. We have lost our bargaining power and now we will pay through the nose. Absolutely none of this suggest that our price levels will be determined by what we do with our 'money in the vault'.