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To: GST who wrote (241482)	3/18/2010 9:06:52 PM
From: Skeeter Bug	Read Replies (1) \| Respond to of 306849

>>You don't seem to grasp the dynamics of what happens when you can't finance and can't eliminate a current account deficit -- it breaks your currency.<< that is surely one of the outcomes. i completely realize that is one of the outcomes. i also realize there are other outcomes, too. i also realize that the controllers of the fed will determine which path we go. >>There are no choices as the currency breaks.<< any route they go at this point wil be ugly. >>We are not familiar with this process because it has never been our issue. It has always been the issue of banana Republics -- and now it is our issue.<< we aren't like tha banana republics in the sense that the robbers are primarily invested in our currency so they will get hurt badly if they destroy their currency. in the case of the bananas, the banana currency was trashed while the banksters money was safely denominated in the buck. so there is at least some significant apples to oranges comparisons. like i said before, if the banksters create a new world currency and get into it, the dollar would likely get crushed. >>There is no choice to be made about 'deflation'. Just hearing you say so reminds me that this is foreign territory for many on these threads.<< i think there is a good chance your linear thinking gets exposed in the next several years. if the bankers shut down credit, the money supply and, therefore, commerce collapses. that will cause over all deflation as money goes bust. heck, we've had sever deflation in spite of the fed printing $2 trillion plus and handing it out like candy to bankers - all the while we couldn't meet our debt needs in the open market, hence QE.

To: GST who wrote (241482)	3/19/2010 1:54:56 AM
From: Perspective	Read Replies (2) \| Respond to of 306849

My impression, and I would be happy to be proven wrong, is that the Clownbuck has become a funding currency for a great deal of carry trades right now. Borrowing at what are effectively negative interest rates, speculators the world over have used the weak dollar to lease all manner of risky assets. And, yes, the Fed could have prevented this by not shoving low rates down our throats. When we get our double-dip, those loans will get called in. The only other change at the margin that I think could offset that is if there were wholesale liquidations of U.S. securities accumulated by foreign central banks in past support of their vendor financing. `BC