China To Dump One Trillion In U.s. Reserves!!!!

If the government uses the FED's failed currency as their reson for taking away the federal reserve act, they can then start a new currency which they control, they can back it by gold or silver, or good hope for all it matters. It still remains that atleast the federal reserve will be screwed and the government can not only rid it self of the debt it has to the fed, but start controlling the stability of the country.

 

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Just checking to see If I understand you: You think the FED is the cause of the US economic problems. US population consuming more than it produces, (going ever deeper debt); expensive foreign wars to increase profits of oil industry friends; large tax cuts for the rich; etc. had nothing to do with it. - It is all the FED's fault. Simply declaring the old money "null and void " will fix things, provided there is no longer any “controller of the currency supply” which is independent of politics. - Is that your position?

That is the system we had in Brazil - near election time spending would increase dramatically and there was no “controller of the currency supply” so the inflation got to be 2 or 3 % per day. Fortunately, most employers paid their workers in when they arrived at work and gave them a few hours to go shopping before the afternoon price rises. (It was good for producing for low skill jobs - every store needed at least one full-time price changer.) Is that what you want?

Now that Brazil has a “FED” independent of politics in practice (but not yet officially changed - still a branch of the government) which is using “inflation targeting" (as the US FED mainly does) the inflation rate is about 4% per year (not per day) and has been for last seven years (ever since the switch to this new FED like system) The value of the local currency has doubled (compared to the dollar) The “Brazil risk premium” is now only about 200 basis points, more than 20 year low. (It was once greater than 2400 basis points.) I sure hope no one in Brazil is taking you seriously. - I would not like to return to the system I understand you to be recommending.

 

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Okay, just when is this horrid disaster supposed to take place? I've waited and waited and waited and....... When is China gonna' do this horrible thing to us? And should I hold my breath?

Baron Max

 

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Yes. I think the FED is the cause of the rise and fall of the dollar, it does this to cause panic amongst the government. It also prints money to the government for it to say PAY for the wars it has recently engaged in, for it to pay off other debts so on and so forth. IF the government controlls the dollar, it can print a stable amount and raise the buying power of the dollar, hence deflating the economy..having a private bank print the currency is stupid it should be nullified with any pretext.

See you miss understood. what you have in brazil is NOTHING like the Federal Reserve.
The key lies in your words:

The Federal reserve bank unlike your system is NOT a branch of the government if it were it would be perfect, alas it is a PRIVATE BANK , controlled by PRIVATE SHARE HOLDERS. Worse yet it with the IRS collects income tax from the citizens of the US which it has no legal right to do. It also manipulates the government using it's debt as a pretext. It needs to be destroyed and a system such as in brazil which is part of the government.

 

Odin'Izm:

Does the Federal Reserve work together with the IMF and World Bank?

 

If it were almost any one but you asking about holding your breath I would say NO, but you may start right now, if you like.

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I think it will be a few weeks before the 2008 US elections when the "financial war" starts. The loyal rich trying to buy up dollars to stem the slide and the people / central banks who are stuck with dollars taking advantage of this to get out with less of a loss than if there were no election. Thus, soon after the 2008 elections, the loyal Republicans will also join the seller trying to unload dollars and the “crash phase” should begin.
I.e. two years from now. (Still holding your breath? - Good, but use a clothes pin as when you pass out, reflexes will start the breathing again.)

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China may get hurt some if it works out this way. Their rapidly growing middle class may not in only two years from be able to sell all China can produced. It all depends upon how quickly the US and European Banks, now taking over the very badly run state banks of China can turn their purchased banks into modern customer credit machines. Explain to the Chinese what "credit cards" are, how they can buy more things using next year's salary, etc. With credit as available as it has been in US for decades, the purchasing power of the Chinese middle class should match that of Americans in two years, and easily exceed it in four years - Then China can tell US:

"Go to hell - we have no more need of you capitalist dogs."

Note that they will then be the top capitalist dogs, but this will not limit their ret heroic. Along with how to use credit cards, they will still know that governmental statement need not have any relationship to the truth.

Just like GWB is has no trouble holding up the Saudi Royal family, the military dictatorship in Pakistan, and the government US installed in Iraq as models of his plan for making the Middle East democratic.

 

You have more faith in politicians than I do!

I have noticed some tendency for politicians to be concerned with the future, but their "future" rarely extends beyond the next election. The FED's people are mainly well educated economists, professionals, concern with their historical record. They serve for 20 to 40 years. It is true the FED is private, owned by invertors, but I am an investor in 34 companies, just now (not in the FED) and yet have essentially zero chance of having any influence on any them. I rarely even vote my proxies. Management always wins, unless they are divided - in some “proxy war.”

(For example, one I own was badly managed - made great excess of drugs that went out of date, and were then written off. - I was so mad that I sent an email, mentioned this and three other recent instance of poor management - it was never even answered. I still own them as their "pipeline" has some very promising drugs in development. I expect to see, and have seen, considerable share price appreciation because of this, despite very bad management at the business level.)

Point being:
You are naive if you think the professional at the FED care what the investors think, want, etc. or are responsive to them. They are only concerned with their careers and how history will record their period of power.

 

Kind of wish you did hold your breath, but no, please don't.

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China would be dumb to dump one trillion dollars of US treasuries. If the Chinese don't allow the US to borrow so much money, then the US economy will go kaput, because the US can't sustain their high consumption, federal debt, and trade deficit without foreign loans. If the US can't sustain that, the world economy will go through a horrible recession, but the US will feel the worst effects. So the Chinese would be hurting themselves.

Why do that when the Chinese can continue to lend money to the US, while continuously taking in US capital and industry and adopting it as their own?

People assume that if the dollar were to drop or if the yuan would increase in value, the US can start rebuilding all products they used to build (which is now being built in China) immediately. Those people are naive. There is no question that the US can rebuild that stuff, but you don't build a factory within a year. It takes many years to build industry and during that time, the US will go through a horrible recession.

So no matter what happens (i.e. no matter what China does), the US is hurting itself. And if the US is REALLY hurt, the world is hurt as well.

 

Not sure about the IMF but it has a huge stake in World Bank, I won't go too far, If it were just me I would say they control international and domestic banking as a whole, but thats jumping to conclusions...

 

Who said anything about trusting politicians? I wish they all die, but I certainly prefer them to bankers, atleast some bankers. And I don't see how you came to that conclusion. I did'nt say i wanted politicians to run the fed, I said the constitutional right to print currency needs to be with the government; whether its the US Treasury which prints it, or a totally new system, aslong as in the constitution this organization is part of the government...whereby it cant lend money to it's own government, thereby having control over it. "The lender has every power over the borrower"

Then as a stock holder would it strike you as strange; when your company had 80% of it's roll over unaccounted for? just gonne... 60 billion dollars.

I think they don't care about what Inverstors think, I'm saying this:

A PRIVATE BANK CANNOT CONTROL A NATIONAL CURRENCY IT IS WRONG

 

Exerpt from "Money Masters"

Read this or watch the videos if you wish, It's quite interesting.

Link to Text version

Link to Video's watch part one and part two

 

The world will recover.

 

By definition, the government is run by "politicians." Your prefer the "government" to well-educated economists, who do not need to run for re-election, and who can ignore the wishes of the owners of their firm and take only actions that will make their history record appear wise, instead of foolish. You are making no sense:

You can not logically say you want the "government" to control the quantity of money printed, but do not trust "politicians" to do so, hate them, etc. (unless you think there are no people in the government, hence no politicians, only a government by computers or aliens etc.)

Yes, I understand that is your POV. No need to put it in red Caps.

What is needed is a reasonable explanation as to WHY that is your POV.

Stop with the illogical statement: You hate politicians, do not trust them etc., but want the government to control the printing of the money.

 

No I prefer well educated economists who work for the government.

It is my point of view because it is the truth? maybe thats it.

 

If it were true, it could be defended with reasons, argument etc. If you can not, then it is just your opinion.

I will stop asking for you to give reasons, arguments etc for your POV as you only keep reasserting your POV / opinion, which I believe is both wrong and Illogical for the reasons I have already given (in post 113).