# Imminent US bubble burst? Your thoughts on this article?



## sofman2000 (23 January 2009)

I was sent this email from wealth daily a us stock company- they say they predicted the first bubble burst also. I just could not add the graphs though.

Interested to see what people think!

This next bubble isn't just going to pop... it's going to explode. 

Take a look at the charts below - do you notice a pattern here? 

Comparing the Bubbles 



It's as plain as the nose on your face. 

There's an enormous bubble in the U.S. right now... and it's on the verge of bursting at any minute. 

When it does - I'm sorry to say - millions of investors who thought their money was safe are going to suffer. 

But at the same time, one group of investors - led by Ian Cooper, will not only avoid this catastrophe... they'll be raking in triple-digit profits along the way. 

You see, Ian - the man who called the sub-prime collapse back in February 2007 - has just issued his latest - and MOST URGENT - warning:

"The U.S. Treasury bubble--very soon--is going to burst wide open." 


Here's how it's going down:

As you know, Ben Bernanke, Henry Paulson and the boys at the Fed and Treasury are flooding the financial system with cash. They're slashing interest rates... and they're bailing out seemingly every big corporation that raises a hand.

It's almost as if Bernanke and Paulson are openly begging for inflation.

Take a look at another chart - this time showing what has happened to the U.S. Money Supply over the last two years... 


The chart makes one fact very clear: The value of the U.S. dollar is about to take a very serious beating.

But hold on - we're just getting started.

This U.S. money supply chart includes only the very beginning of the more than $7.2 trillion worth of federal bailout money our government has committed to.

And it includes none of the proposed $775 billion stimulus package being pushed by President Barack Obama.

The simple fact is: The U.S. Government - at this very moment - is teetering on the brink of bankruptcy. And with each new federal bailout, we move one step closer to the potential downgrading of the U.S. credit rating!



The U.S. Treasury Bubble Is Not Only Real... 
It's on the Verge of Collapsing at Any Time! 

In the past few months, investors have raced away from stocks, corporate bonds and commodities... and while scrambling for safety they've created an enormous bubble in U.S. Treasuries. 

So much so, they drove the 3-month Treasury bill rate to negative territory for the first time since 1929, creating an over-inflated bubble set for failure. 

And for once, it seems, the major media outlets seem to agree...

√ On December 15, the Wall Street Journal proclaimed: "In the wake of popped stock, housing and commodity bubbles, some see a fourth bubble building - in Treasury bonds."
√ On December 12, a Dallas Morning News headline confirmed that "Treasury bonds have reached bubble stage."
√ On December 26, no less an authority than Bill Gross - a man the New York Times calls The Nation's Most Prominent Bond Investor - said that, "Treasuries have some bubble characteristics, certainly the Treasury bill does."


To be sure, here's how crazy the activity's been in the Treasury market: 

On the very same day - December 9, 2008 - in which the rates on 3-month Treasury bills turned negative for the first time... the U.S. still sold $30 billion worth of 4-week T-bills at a zero percent rate. 

Listen - you and I both know... that money is not going to stay parked in U.S. Treasuries forever. 

At some point - most likely within the next few weeks - that money will begin pulling out of Treasuries... and back into equities. 

And when that begins to happen... 


POP! 

Amazingly... millions of U.S. investors either don't see the coming danger - or they simply choose to ignore it. 

But when this bubble bursts - and it's only a matter of time until it does - those very same investors who thought they were investing in a safe, secure investment vehicle are going to be wiped out. 

So here's what's most important to you right now: 

It's absolutely critical that you prepare yourself today for the imminent explosion of the U.S. Treasury Bubble.


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## lucas (23 January 2009)

What do I know? But I would think the US Govt. is so all over this right now that it won't be allowed to happen. The sub-prime crisis caused and is causing pain because no-one was looking. They are looking now - boy are they looking.

It also reads a bit too much like advertising. But hey! What do I know? 0.


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## Buddy (23 January 2009)

I just have this terrible feeling that all this flight of capital to USD is like the rats and mice following the Pied Piper. And the end is inevitable and predictable. Even though "they" are "looking" I suspect that "they" are "looking" at a tragedy unfold of Shakespearian proportions. Ponzi capitalism is dead, or at least wriggling in its death throes. Even though I hold USDs, I am moving them to AUDs but even that may do me no good. They are all fiat systems and being run on excessive credit allowance. Michael Lewis (Liar's Poker) is probably correct in his analysis of Wall St, and Wall St is going to take us all down. And Wall St's mates Greenspan and Bernanke are just compounding the problem.

Yes, you are probably correct that the bubble is about to burst. Only problem is that the bubble is full of, as Michael Lewis would say "layer upon layer of dog sh*t", and we're all going to get covered in dog sh%t. Long live the Austrians and Von Misces. 

What to do?????  Buy gold??????? Buy a gold lease???? Buy a mine, any old mine, and work hard????


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## shaunQ (23 January 2009)

I know nothing as well, but having worked in the public service, I know to never underestimate Government stupidity.

I have read similar on http://www.marketskeptics.com and it is quite concerning. I'd be interested if anyone out there would like to suggest what the implications to Australia would be.

If hyper-(or extreme)inflation were to occur, Gold is based in US$ - does that mean Gold equities may be safer?

They say, if you are employed with debt it is good as it can lower your debt. Well does that mean that going into debt now may be a good idea??

What would be a safe(r) investment for fixed income/pensioners?


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## amy997 (23 January 2009)

I'm only theorizing here but i'd say the outcomes of a USD collapse for Australia would be very bad. 
The US would no longer be able to trade with us as it does currently which would mean our income as a country would be less and our ability to service foreign debt would become harder. The current account deficit may come back to bite.

Going into debt doesn't sound that smart to me but then i may be wrong.


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## Bushman (23 January 2009)

shaunQ said:


> If hyper-(or extreme)inflation were to occur, Gold is based in US$ - does that mean Gold equities may be safer?




What the truck? The USD has not been pegged to the gold price since the days of Tricky Dicky - hence the unwinding of the asset bubble mania you and I are enjoying at the moment. 

If you want gold, buy physical gold. However equities will give you exposure to the gold price but with an element of equity markets risk and, importantly for gold, treasury risk (hedge books, forward contracts and the like). Anyway there are countless threads on gold with some savvy contributors. Have a look in 'Commodities'.   

PS: there is a thread on this topic in International section that will provide some further details for you guys. I am not sure, however, to post a link?


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## CanOz (23 January 2009)

amy997 said:


> I'm only theorizing here but i'd say the outcomes of a USD collapse for Australia would be very bad.
> The US would no longer be able to trade with us as it does currently which would mean our income as a country would be less and our ability to service foreign debt would become harder. The current account deficit may come back to bite.
> 
> Going into debt doesn't sound that smart to me but then i may be wrong.




A flight away from treasuries will have a massive effect on the POG (already being would up like a rubber band), and that can only be positive for the AUD.



CanOz


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## Aussiejeff (23 January 2009)

CanOz said:


> A flight away from treasuries will have a massive effect on the POG (already being would up like a rubber band), and that can only be positive for the AUD.
> 
> 
> 
> CanOz




But, if everyone then wants our BananaBuck$, it will go through the roof and then our exports will crash?

DOH!

It's all too complicated...


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## CanOz (23 January 2009)

Aussiejeff said:


> exports will crash?




Exports of mineral resources have already crashed haven't they? 

China is slowing quickly as is the rest of Asia, requiring fewer materials now.

Who knows, maybe if all this unravels we'll really see the Amero after all!

CanOz


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## Aussiejeff (23 January 2009)

CanOz said:


> Exports of mineral resources have already crashed haven't they?
> 
> China is slowing quickly as is the rest of Asia, requiring fewer materials now.
> 
> ...




YenYuans?

Or, to save face, should that be YuanYens?


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## Buddy (23 January 2009)

Aussiejeff said:


> YenYuans?
> 
> Or, to save face, should that be YuanYens?




How about Yo-Yo. It goes up and down.


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## shaunQ (23 January 2009)

Bushman said:


> What the truck? The USD has not been pegged to the gold price since the days of Tricky Dicky




I didn't really mean that. I meant about that the gold price we pay, isn't it in US dollars? So if the AU -> US dollar rate changes, doesn't that have a real-effect on the price of gold from our perspective, regardless of the global price of gold.

For instance, gold has been good for people in Aus recently simply because if they purchased at US parity, now they have 1/3 more because of the exchange difference only. Surely, it can go both ways.


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## Buddy (23 January 2009)

shaunQ said:


> I didn't really mean that. I meant about that the gold price we pay, isn't it in US dollars? So if the AU -> US dollar rate changes, doesn't that have a real-effect on the price of gold from our perspective, regardless of the global price of gold.
> 
> For instance, gold has been good for people in Aus recently simply because if they purchased at US parity, now they have 1/3 more because of the exchange difference only. Surely, it can go both ways.




Yes, that is correct but I think the line or argument goes something like....... if the US economy goes banana shape then the price of gold (in USD terms) will go through the roof. So whilst you may have purchased your gold in AUD at say 0.65, the impact of the price increase in gold will outweigh changes in the exchange rate. I guess though there becomes a point, if say the USD went like the Zimbabwe zong (or whatever it's called), then all bets are off. I'm not sure what happens should that occur. Uncharted territory. But one would think that should fiat currencies tank (especially the USD), then gold would re-establish itself with some sort of intrinsic value.


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## Dowdy (23 January 2009)

Gold price is being manipulated. Dec had an increase of over 120% for demand in physical gold yet the market price stayed flat. So much for supply and demand.

China and USA is doing everything it can to prop up the US dollar. They can only manipulate it for so long til it implodes


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## explod (23 January 2009)

A timely thread all

The following appeared in the Privateer newsletter early in December 08:-



> A notable feature of the two weeks just ended has been a fantastic explosion in the secondary market for US Treasury debt paper.  Up until November 19, the T-Bond futures price had not yet gone above 124.30 - the level it reached the last time that the Fed Funds was 1.00 percent in the twelve months between mid 2003 and 2004.   On December 5, the price had soared to 134.40.   A price rise of this magnitude and swiftness is almost certainly unprecedented.   The "flight to safety" has reached blow-off proportions, with yields at the short end of the curve having reached the ultimate 0.01 percent.




The T-Bonds have since dropped back a bit but as well as the US$ index is an indicator to keep watch.

cheers explod


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## satanoperca (3 January 2011)

Not of a case of if but when.

http://www.theaustralian.com.au/business/news/us-must-raise-debt-ceiling-says-obamas-top-economic-adviser/story-e6frg90o-1225980850732



> The current federal government borrowing limit stands at $US14.3 trillion ($14.02 trillion), a mark that is expected to be reached by April or May.
> 
> Before hitting the limit, Congress must vote to increase the nation's borrowing capacity. Otherwise, the US could be forced to default on its debt obligations and the government could be shut down.




Just keeping adding to the debt, remove the ceiling all together, no need for it, just keep on borrowing.

Obama is out of control.

Cheers


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## wayneL (3 January 2011)

satanoperca said:


> Not of a case of if but when.




One thing I've learnt from the last GFC, is that "they" can (and will) prop things up for a helluva lot longer then "we" think they can.

I'm certain of a "when", but it could be a long time coming.


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## Vicki (3 January 2011)

I've heard Obama might have other radical agendas, to appease the minority progressive special interest groups he's aligned with, by getting the excuse for 'big' government to act in it's own self interest & instigate pos. sweeping changes.

Top-down  bottom-up  inside & out.  radical reform?

How much US currency is held as reserves by other nations?
And what would happen if the US dollar 'tanked'?.....A lot of worthless paper.

I think it's a dangerous game they're play'n, printing more money!

Soon, all they might have [apart from a commy gov.] is just a few Nuclear subs & 'the bomb'?

As a side note: I wouldn't want to be living in some of their cities, full of angry desparate people....Armed to the teeth.


Vicki


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## satanoperca (3 January 2011)

wayneL said:


> I'm certain of a "when", but it could be a long time coming.




Agree, but time is accelerating along with debt, should see a bust in the next 5 years, all makes for interesting times.


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## nukz (3 January 2011)

*World on high alert as China inflation soars*
_January 3, 2011

Ominously, outrage is growing in the People's Republic over rising prices, writes Malcolm Moore.

CHINA could be hit by inflation of 7-8 per cent in the next two months, panicking Beijing's policymakers into dramatically raising interest rates, economists have warned.

The prospect of at least four further interest rate rises in the world's second-largest economy is likely to alarm global markets, which tumbled in shock at China's decision to raise rates on Christmas Day._
Source - http://www.theage.com.au/business/world-on-high-alert-as-china-inflation-soars-20110102-19d0l.html

This is very concerning as well


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## wayneL (3 January 2011)

Vicki said:


> As a side note: I wouldn't want to be living in some of their cities, full of angry desparate people....Armed to the teeth.
> 
> 
> Vicki




Are you married to robots? 

:


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## Vicki (3 January 2011)

wayneL said:


> Are you married to robots?
> 
> :




Yes It might appear we agree on something lol.

Might be a distorted view, but I've watched 'Ross Kemp' on gangs, US eppisode, & remember being horriffied at the amount of gun-related crime as well as the shocking amount of fire-arms in the communities...Automatic weapons taboo.

He also spent some time hang'n round emergency rooms in Orange county FL. I think.
Where young offenders are made to look at the consequences of gun violence.
Didn't have to wait long.

I just shudder at the thought, If there was a crisis in the US, & shortage of food or increased desperation etc....And all those guns?

You can get thugs in any country, but not all are pack'n AK47'S & desert eagles.

Vick


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## wayneL (3 January 2011)

Vicki said:


> Yes It might appear we agree on something lol.
> 
> Might be a distorted view, but I've watched 'Ross Kemp' on gangs, US eppisode, & remember being horriffied at the amount of gun-related crime as well as the shocking amount of fire-arms in the communities...Automatic weapons taboo.
> 
> ...




The problem is that in other countries only the thugs have AK47s etc.


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## Smurf1976 (3 January 2011)

wayneL said:


> One thing I've learnt from the last GFC, is that "they" can (and will) prop things up for a helluva lot longer then "we" think they can.
> 
> I'm certain of a "when", but it could be a long time coming.



Agreed.

Something I've learnt with both financial and non-financial systems under stress is this. 

The stress will gradually erode the ability of the system to cope with an external shock. For example, a company gradually runs down its cash reserves or an overloaded water supply system gradually drains the dams.  

Various predictions of the "deadline" to resolve the situation based on the above will be made. They will usually be wrong.

At some point an external shock, such as an interruption to production in the case of a mining company or a drought in the case of the water supply example, will arrive. With cash / water reserves already depleted due to the underlying problems, this shock becomes the visible trigger event for a crisis that was always going to happen, the only question being when.

Had the underlying situation been healthy then the shock would have been just a page or two in the annual report. If the company had $100 million to spare, if the dams were almost full, then nothing drastic would have happened since there was plenty of "buffer" to cope with the problems. But with very little in reserve before the crisis hit, outright failure is inevitable. 

And so it will be with the US situation. Clearly under stress and heading toward an inevitable crisis. At some point there will probably be a "shock" event, the nature and timing of which would be impossible to predict other than to say something will happen sometime. And that shock will be what tips them over the edge...

Possible shocks? Basically anything that seriously rocks the system. Trying to predict the "what" would be futile in my opinion, other than to say one day you'll wake up an it will have happened. That said, as the system is increasingly stressed, the size of the shock required to bring it down decreases with time until the event finally happens.

It's much like how I remember reading about the problems at General Motors back in 2002, likewise some of the US mortgage lending giants. It was inevitable that trouble lay ahead, and 6 years later it finally happened with the GFC. Trouble was inevitable, it just needed a trigger (and sooner or later you can be pretty certain that there will be a trigger for just about anything).


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## Vicki (3 January 2011)

Could one of these triggers perhaps be, a virtual dumping of the US dollar, by concerned foriegn countries?

Vicki


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## Pager (3 January 2011)

So many people and commentators seem to be convinced the US is about to implode and go on about deficits, bubbles, Debt etc etc.

I haven’t a clue personally but what I have noticed over the years is the experts and academics more often go over board with there dire predictions of doom and gloom and things pan out no were near the degree of doom, either that or there completely wrong, i would be more worried if the same people were all milk and honey and saying the US and its economy had never been better


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## Vicki (3 January 2011)

Pager said:


> So many people and commentators seem to be convinced the US is about to implode and go on about deficits, bubbles, Debt etc etc.
> 
> I haven’t a clue personally but what I have noticed over the years is the experts and academics more often go over board with there dire predictions of doom and gloom and things pan out no were near the degree of doom, either that or there completely wrong, i would be more worried if the same people were all milk and honey and saying the US and its economy had never been better





Like some of the US politicians & their paid fo, media cronies?

Vick


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## Vicki (3 January 2011)

Pager said:


> So many people and commentators seem to be convinced the US is about to implode and go on about deficits, bubbles, Debt etc etc.
> 
> I haven’t a clue personally but what I have noticed over the years is the experts and academics more often go over board with there dire predictions of doom and gloom and things pan out no were near the degree of doom, either that or there completely wrong, i would be more worried if the same people were all milk and honey and saying the US and its economy had never been better





Like some of the US politicians & their paid for, media cronies?

Vick


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## Julia (3 January 2011)

Pager said:


> So many people and commentators seem to be convinced the US is about to implode and go on about deficits, bubbles, Debt etc etc.
> 
> I haven’t a clue personally but what I have noticed over the years is the experts and academics more often go over board with there dire predictions of doom and gloom and things pan out no were near the degree of doom,



Well, if that's the case, where were their gloomy predictions pre the GFC?  Didn't they all repeatedly tell the gullible public that all would be well?
I remember clearly the pundits who said the subprime crisis in the US would be contained there.  That the notion it could lead to a global crisis was preposterous.


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## satanoperca (3 January 2011)

Julia said:


> I remember clearly the pundits who said the subprime crisis in the US would be contained there.  That the notion it could lead to a global crisis was preposterous.




*Brilliant* :bananasmi


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## Smurf1976 (3 January 2011)

Julia said:


> Well, if that's the case, where were their gloomy predictions pre the GFC?  Didn't they all repeatedly tell the gullible public that all would be well?
> I remember clearly the pundits who said the subprime crisis in the US would be contained there.  That the notion it could lead to a global crisis was preposterous.



I'm still paying attention to the same commentators I've been paying attention to for years. 

Back in 2002 I didn't know whether to believe them or not when I heard about GM being likely to end up broke and likewise major mortgage lenders, rising gold price etc. I thought the Fannie Mae / Freddie Mac stuff was literally a joke for a while (what a truly ridiculous name for a financial institution!) but sure enough, they ended up in trouble as predicted.

Track record is pretty good so far. Needless to say, I don't bother listening to the mainstream "nothing to worry about" crowd...


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## Pager (4 January 2011)

Julia said:


> Well, if that's the case, where were their gloomy predictions pre the GFC?  Didn't they all repeatedly tell the gullible public that all would be well?
> I remember clearly the pundits who said the subprime crisis in the US would be contained there.  That the notion it could lead to a global crisis was preposterous.




Erm  thats my point, the experts dont really know what will happen


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## satanoperca (4 January 2011)

Pager said:


> Erm  thats my point, the experts dont really know what will happen




I think it is a case of them knowing what will happen but they cannot accurately predict when it will happen, the emphasis is time.

Cheers


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## Pager (4 January 2011)

satanoperca said:


> I think it is a case of them knowing what will happen but they cannot accurately predict when it will happen, the emphasis is time.
> 
> Cheers




Which though 

When they tell the gullible public that all would be well or when they predict an imminent bubble burst.............................


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## satanoperca (4 January 2011)

Pager said:


> Which though
> 
> When they tell the gullible public that all would be well or when they predict an imminent bubble burst.............................




They will always tell the public everything is going to be A OK, dont need to create hysteria.

The are well aware that GFC bear just went back into the cave after being pushed back with the heavy burden of debt. The question is when will the GFC bear come out of hybernation to play again.

Cheers


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## derty (5 January 2011)

Smurf1976 said:


> I'm still paying attention to the same commentators I've been paying attention to for years.



Who do you pay attention to Smurf?


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## qe2infinity (5 January 2011)

Dowdy said:


> Gold price is being manipulated. Dec had an increase of over 120% for demand in physical gold yet the market price stayed flat. So much for supply and demand.
> 
> China and USA is doing everything it can to prop up the US dollar. They can only manipulate it for so long til it implodes




agree with Dowdy, would also like to add that silver was manipulated too, by who else but JPMOrgan...any surprises?

china will keep their currency low to help exporters and eventually reduce their USD holdings...who would like to hold something that continues to fall in value?


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## Mofra (5 January 2011)

Pager said:


> I haven’t a clue personally but what I have noticed over the years is the experts and academics more often go over board with there dire predictions of doom and gloom and things pan out no were near the degree of doom, either that or there completely wrong, i would be more worried if the same people were all milk and honey and saying the US and its economy had never been better



In modern society, there are a million voices making many predictions, and those that tend to get the exposure are those that will catch the most attention - this invariably leads to the most shocking predictions gaining the most traction.

The hard part is shying away from the economic shock jocks and finiding those that can put forward a reasoned opinion without needing to resort to cute catchphrases.


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## explod (5 January 2011)

qe2infinity said:


> agree with Dowdy, would also like to add that silver was manipulated too, by who else but JPMOrgan...any surprises?
> 
> china will keep their currency low to help exporters and eventually reduce their USD holdings...who would like to hold something that continues to fall in value?




In recent times it has been the US Federal reserve providing the backing for JPMorgan to do the rigging.   And you can easily guess, to hold up the dollar.

Trying to find an economist that is truly independent, not selling something or having his/her own axe to grind and who is very well educated in the field (of economics) is very difficult.

I have subscribed to a number but the standout, and I am in no way connected to him is Jack Buckler and his newsletter "The Privateer"  all of his statements and conclusions are backed up by actual figures, more often than not from Government or an organisations own figures.  Actual quotes are given references that can be easily verified.   The bigger picture of world economics is not that difficult if we can get onto the correct guidance.

It is worth looking out for and noting that almost no mainstream financial commentators will qualify anything that they assert.


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## FxTrader (7 January 2011)

Mofra said:


> In modern society, there are a million voices making many predictions, and those that tend to get the exposure are those that will catch the most attention - this invariably leads to the most shocking predictions gaining the most traction



Here's another shocking prediction for you from Charles Hugh Smith (oftwominds.com)... 

Why the World Is Financially Doomed in Four Charts   (January 6, 2011)

The global economy is doomed to implosion, and here are four charts which explain why.

Though the complexities may appear endless, the global economy's coming implosion is really fairly easy to understand: here are four charts which do the heavy lifting. It boils down to these basics:

1. When money is dear and difficult to borrow, then productivity and capital accumulation are encouraged, speculation, malinvestment and debt-based consumption are discouraged.

2. When money is "free" (zero-interest rate policy) and liquidity is unlimited, then the opposite conditions hold: speculation in risk assets, malinvestment and debt-based consumption are all encouraged, and productivity and capital accumulation are heavily discouraged.

3. When debts exceed the value of the underlying assets, the only way out of the Tyranny of Debt is to write off the debt on both the borrower and lender's balance sheets, wiping out their capital via liquidation and bankruptcy.

4. The "extend and pretend" policy pursued by all major nations is simply transferring the impaired debt from private hands to the taxpayers (public debt), crippling the economy with higher taxes and higher debt service.

5. The Central State's "extend and pretend" policy requires heavy borrowing every year to prop up the status quo, pushing the Central State (or equivalent, i.e. the Eurozone) into an inescapable double-bind: either continue increasing public debt and cripple the economy with high taxes and high public-debt servicing costs, or let the financial status quo of "profits are private, losses are public" implode.

The first path leads to default, as the Tyranny of Debt cannot be masked for long, while the second path wipes out the Financial Power Elite which feeds the politicians.

Here are the charts. Note how the speculative economy created the illusion of rising wealth for the bottom 90%, an illusion stripped away by the Default Economy.

In essence, the Financial Power Elites profited immensely from creating this illusory wealth which gave the bottom 90% the false sensation that their declining earnings and purchasing power were being offset by the "magic" of asset bubbles.

Then, when the bubble popped, the Financial Power Elites transferred the impaired assets to the taxpayers, a process which is still underway. The politicos of both parties are complicit; behind the simulacra of toothless "reforms," this process proceeds in myriad ways (Bank of America transferring toxic debt to Fannie/Freddie, etc.) Behind the smokescreen of conjuring a "wealth effect" to foster more consumption, the Fed's purchase of Treasuries (QE2) serves this transfer-of-debt-to-the-public process.






This same process is playing out throughout the global economy: Greece, Ireland, the U.S., and eventually, in China when its monumental property bubble pops.


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