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To: GST who wrote (241472)	3/18/2010 7:09:37 PM
From: Skeeter Bug	Read Replies (2) \| Respond to of 306849

>>We import capital --<< export treasuries? yes, the bankers make a ton of money in that process. they then use some of that money to pay off politicians to get $23.7 trillion bailouts and back stops. i know, chump change. >>but the capital available to import does not exist in the quantities we require -- the Fed cannot change this reality any more than we can suddenly create a zillion more barrels of oil out of thin air.<< but they make a mother load of money in the process. these "controllers," if you will, might even want to establish themselves in the middle east in order to deal with the stress of which you speak. check. >>When you can no longer finance your current account deficit, or close the current account deficit, you have run out of options, save one -- print and pray.<< no, there are other options. for example, deflationary depression, set up police state structure, zeroing out some or all of the debt and, potentially, going to war. whatever fiscal action we take, though, will be determined by the private people who control the fed - and they will make billions front running the trade. >>The fed has no other cards to play -- it does not control anything that can change this basic reality.<< you act as though this would surprise them. by its very definition, a debt based monetary system like ours is DESTINED to eventually fail. it isn't "if," rather, it is "when." they knew this in 1913 when they set it up. -lol- if you observe what is going on now, the banks were saved by the governments and the banks have now turned on the governments that have saved them and they will bankrupt the governments. this would not be possible without the intervention of the federal reserve system. >>Despite all of its supposed power, when and where it really counts it is powerless.<< they are powerless to prevent the destruction, but even you will eventually see that they have the IMMENSE POWER to direct the destructive forces away from the banks and onto the nation states. the difference between national solvency and bankruptcy and chaos... without fed intervention, the banks would be bust and the nation state would be saved. with the fed, the banks will be saved and the nation state destroyed. again, they have other tools to reap the destruction allotted to them onto the people of nation states.

To: GST who wrote (241472)	3/18/2010 8:19:07 PM
From: arun gera	Read Replies (1) \| Respond to of 306849

GST, Isn't the US system designed to send dollars (the reserve currency) out to countries with favored trade status? Americans did not mind the favored trade relationships with european countries. Why not China? What about the Triffin dilemma: en.wikipedia.org Onset during Bretton Woods Era Thanks to money flowing out of the country through the Marshall Plan, US defense-spending and Americans buying foreign goods, the number of U.S. dollars in circulation soon exceeded the amount of gold backing them up. By the early 1960s, an ounce of gold could be exchanged for $40 in London, even though the price in the U.S. was $35. This difference showed that investors knew the dollar was overvalued and that time was running out. There was a solution to the Triffin dilemma for the U.S.: reduce the number of dollars in circulation by cutting the deficit and raising interest rates to attract dollars back into the country. Both these tactics, however, would drag the U.S. economy into recession, a prospect new President John F. Kennedy found intolerable, although he did sign an executive order allowing the US Treasury "to issue silver certificates against any silver bullion, silver, or standard silver dollars in the Treasury." This would create competition to the Federal Reserve Notes (dollars) that were overvalued. To maintain the Bretton Woods system and exert control over the exchange rate of gold, the US entered into the London Gold Pool in 1961 which sustained the system until 1967 when runs on gold and the devaluation of the pound sterling caused rapid deterioration of the system. [edit] The Nixon Shock In August 1971, President Richard Nixon acknowledged the demise of Bretton Woods system. He announced that the dollar could no longer be exchanged for gold, which soon became known as the Nixon shock. The "gold window" was closed. In order to maintain the Bretton Woods system the US had to: a) run a balance of payments current account deficit to provide liquidity for the conversion of gold into US dollars. With more US dollars in the system the citizens began to speculate, thinking that the US Dollar was overvalued. This meant that the US had less gold as people starting converting the US dollars to gold and taking it offshore. With less gold in the country there was even more speculation that the US Dollar was overvalued. b) run a balance of payments current account surplus to maintain confidence in the US Dollar. Obviously, the US was faced with a dilemma because it is not possible to run a balance of payments current account deficit and surplus at the same time. [edit] Implication in 2008 meltdown In the wake of the Financial crisis of 2007-2008, the governor of the People's Bank of China explicitly named the Triffin Dilemma as the root cause of the economic disorder, in a speech titled Reform the International Monetary System. Zhou Xiaochuan's speech of 29 March 2009 proposed strengthening existing global currency controls, through the IMF. [1] [2] This would involve a gradual move away from the US dollar as a reserve currency, and towards the use of SDRs (IMF Special Drawing Rights) as a global reserve currency. Dr Zhou argued that part of the reason for the original Bretton Woods system breaking down was the refusal to adopt Keynes's Bancor which would have been a special international currency to be used instead of the dollar. American economists such as Brad Delong have agreed that on almost every point where Keynes was overruled by the Americans during the Bretton Woods negotiations, he was later proved correct by events.[3] Dr Zhou's proposal attracted much international attention; [4] in a November 2009 article published in Foreign Affairs magazine, economist C. Fred Bergsten argued that Dr Zhou's suggestion or a similar change to the International Monetary System would be in the United States' best interests as well as the rest of the world's.[5] While Dr Zhou's proposal has not yet been adopted, leaders meeting in April at the 2009 G-20 London summit did agree to allow $250 Billion of SDRs to be created by the IMF, to be distributed to all IMF members according to each countries voting rights.