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The Cash Crunch: The Short Version...

 
Anonymous Coward
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11/12/2012 09:20 PM
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Re: The Cash Crunch: The Short Version...
 Quoting: Anonymous Coward 27372719


The thing is that I dont see a 100% Gold backing to the currency as it will be a basket. In the U.S. it could be 50% Gold 50% Natural Gas or something like that. Russia could have 50% Gold 25% oil and 25% Natural Gas where China could have 50% Gold 16.6% oil 16.6% NG and 16.6% US Bonds and so on. Did you see the article today regarding the US being the biggest producer of BTU's by 2017 ? It sounded like a shot over the bow to me. They say oil producer but all it is about is natural gas ! Here it is [link to finance.yahoo.com]


I do not want to derail this thread,but your post made me remember something that may be a key element here.
1.A few weeks back the Brits talked about making petro chemicals from air.
2.And the US Navy was doing the same with sea water
3.A group of hi ranking foreign policy and intell types are on record stating that they do not see Israel surviving more that a few more years.(One of our major allies in the M.E.,an area where we have vital interests).

I add these up, and it may be that TPTB are planning for a post-petrodollar era. I have stated before we could be much more energy self sufficient in the US,but the drawback is the death of the petrodollar.Maybe the gold/energy basket is how they plan on overcoming that.And after the need for M.E. oil,the fate of Israel is just not important to the leadership.A caveat to that is that the Arab world would not be able to finance a war with Israel if the above occur.

Not if the new world currency balance would be an even weighting of Gold Backing as in my example above. Notice my weighting of the new currency is 50% Gold for all currencies. The new world reserve currency would be supported by the Gold price and not the oil price as it is now.
Anonymous Coward
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11/12/2012 09:23 PM
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Re: The Cash Crunch: The Short Version...
 Quoting: Anonymous Coward 27372719


The thing is that I dont see a 100% Gold backing to the currency as it will be a basket. In the U.S. it could be 50% Gold 50% Natural Gas or something like that. Russia could have 50% Gold 25% oil and 25% Natural Gas where China could have 50% Gold 16.6% oil 16.6% NG and 16.6% US Bonds and so on. Did you see the article today regarding the US being the biggest producer of BTU's by 2017 ? It sounded like a shot over the bow to me. They say oil producer but all it is about is natural gas ! Here it is [link to finance.yahoo.com]
 Quoting: Anonymous Coward 17694439


I do not want to derail this thread,but your post made me remember something that may be a key element here.
1.A few weeks back the Brits talked about making petro chemicals from air.
2.And the US Navy was doing the same with sea water
3.A group of hi ranking foreign policy and intell types are on record stating that they do not see Israel surviving more that a few more years.(One of our major allies in the M.E.,an area where we have vital interests).

I add these up, and it may be that TPTB are planning for a post-petrodollar era. I have stated before we could be much more energy self sufficient in the US,but the drawback is the death of the petrodollar.Maybe the gold/energy basket is how they plan on overcoming that.And after the need for M.E. oil,the fate of Israel is just not important to the leadership.A caveat to that is that the Arab world would not be able to finance a war with Israel if the above occur.

Not if the new world currency balance would be an even weighting of Gold Backing as in my example above. Notice my weighting of the new currency is 50% Gold for all currencies. The new world reserve currency would be supported by the Gold price and not the oil price as it is now.


Oil could still be priced as it is now but instead of supporting the American Dollar as the reserve Currency it would support the Gold backed international reserve currency price, thus supporting the oil price intern supporting the budgets of the Arab countries.

What do you think ?
Anonymous Coward
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11/12/2012 09:25 PM
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Re: The Cash Crunch: The Short Version...
The routinely banned Dervish
(thru no fault of my own)


No, the reason they are rationing the cash is to slow people from diving into physical holdings of gold and silver hand over fist. Since the QE4ever announcement any one with a half a brain cell is getting out of the dollar and into some type of hard assets like Gold and Silver. By restricting access to cash they slow the transition to hard assets. When cash is traded in for Gold or silver it creates inflation because it used to be parked on the banks balance sheet in a savings account used for collateral reserves or on a piece of ETF script. Now ? in the open market it (dollar) islooking for a home = inflation with nowhere to go except more hard assets.


I used to be a gold bug-still have a significant amount in physical.But you can buy gold with a credit card or your check book,at least where I live.You do not need cash to do that.

If you have cash in your account then its not an issue.
Another factor is that they will not allow hyper inflation.That destroys the wealth of the elite as much as you and I.
Further,if gold prices skyrocket,who can afford to buy it?
When FDRs gold order came thru,they set the price of conversion.What happens if they say gold oz =1700 dollars,and you have to turn it in?

They cannot monetize out of this debt by hording gold.The gold they store would have to be sold to pay off debt-and that gains them nothing.
Anonymous Coward
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11/12/2012 09:25 PM
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Re: The Cash Crunch: The Short Version...
something wrong with the reply fuction ?
Saddletramp (OP)
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11/12/2012 09:34 PM

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Re: The Cash Crunch: The Short Version...
Saddle have you seen this?

[link to www.roadtoroota.com]

New $100 is shown at roll out as a 2009 series bill... Interesting

and this.

[link to www.youtube.com]
 Quoting: N3m3s1s


Yes, I saw that. But my sources at the Dallas Fed tell me that the new $100 Bill will NOT be rolled out as a Series 2009...that Series is out there, but no longer being printed.

My source says be believes, but is not sure, that the new Series $100 will be Series 2013.

I asked him specifically about this being tied to a return to the gold standard, and he said he'd heard some strange rumors, but nothing definitive...
 Quoting: Saddletramp


What do you mean by "that series is out there"? It's not in circulation.
 Quoting: N3m3s1s


The "New" $100 dollar bill is not Series 2009, they've moved it to Series 2013. They are still printing the old version as Series 2009...

They just put Series 2009 on the example bill. There is already a series 2009 in circulation...

Here is the Video from the Fed explaining their reasons for the delay in circulating the New $100...


[link to www.newmoney.gov]

Of course my Fed Source says these reasons are total BULLSHIT!!!
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."
Saddletramp (OP)
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11/12/2012 09:37 PM

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Re: The Cash Crunch: The Short Version...
 Quoting: Anonymous Coward 27372719


The thing is that I dont see a 100% Gold backing to the currency as it will be a basket. In the U.S. it could be 50% Gold 50% Natural Gas or something like that. Russia could have 50% Gold 25% oil and 25% Natural Gas where China could have 50% Gold 16.6% oil 16.6% NG and 16.6% US Bonds and so on. Did you see the article today regarding the US being the biggest producer of BTU's by 2017 ? It sounded like a shot over the bow to me. They say oil producer but all it is about is natural gas ! Here it is [link to finance.yahoo.com]
 Quoting: Anonymous Coward 17694439


I do not want to derail this thread,but your post made me remember something that may be a key element here.
1.A few weeks back the Brits talked about making petro chemicals from air.
2.And the US Navy was doing the same with sea water
3.A group of hi ranking foreign policy and intell types are on record stating that they do not see Israel surviving more that a few more years.(One of our major allies in the M.E.,an area where we have vital interests).

I add these up, and it may be that TPTB are planning for a post-petrodollar era. I have stated before we could be much more energy self sufficient in the US,but the drawback is the death of the petrodollar.Maybe the gold/energy basket is how they plan on overcoming that.And after the need for M.E. oil,the fate of Israel is just not important to the leadership.A caveat to that is that the Arab world would not be able to finance a war with Israel if the above occur.
 Quoting: Anonymous Coward 17694439


Not if the new world currency balance would be an even weighting of Gold Backing as in my example above. Notice my weighting of the new currency is 50% Gold for all currencies. The new world reserve currency would be supported by the Gold price and not the oil price as it is now.


Oil could still be priced as it is now but instead of supporting the American Dollar as the reserve Currency it would support the Gold backed international reserve currency price, thus supporting the oil price intern supporting the budgets of the Arab countries.

What do you think ?


I don't think they will be making motor oil, lubricants, chemicals, tires, and everything else they make from Oil, from air, anytime soon...

Last Edited by Saddletramp on 11/12/2012 09:39 PM
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."
Anonymous Coward
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11/12/2012 09:38 PM
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Re: The Cash Crunch: The Short Version...
The routinely banned Dervish
(thru no fault of my own)
 Quoting: Anonymous Coward 27372719


No, the reason they are rationing the cash is to slow people from diving into physical holdings of gold and silver hand over fist. Since the QE4ever announcement any one with a half a brain cell is getting out of the dollar and into some type of hard assets like Gold and Silver. By restricting access to cash they slow the transition to hard assets. When cash is traded in for Gold or silver it creates inflation because it used to be parked on the banks balance sheet in a savings account used for collateral reserves or on a piece of ETF script. Now ? in the open market it (dollar) islooking for a home = inflation with nowhere to go except more hard assets.


I used to be a gold bug-still have a significant amount in physical.But you can buy gold with a credit card or your check book,at least where I live.You do not need cash to do that.

If you have cash in your account then its not an issue.
Another factor is that they will not allow hyper inflation.That destroys the wealth of the elite as much as you and I.
Further,if gold prices skyrocket,who can afford to buy it?
When FDRs gold order came thru,they set the price of conversion.What happens if they say gold oz =1700 dollars,and you have to turn it in? They cannot monetize out of this debt by hording gold.The gold they store would have to be sold to pay off debt-and that gains them nothing.

************************************************************​
************************************************************

Response since the respond function on GLP is not working





A few things about your post. Cash in your account is an reserve asset used for leverage on a banks balance sheet (ask saddletramp)

Just because you have electronic dollars in your bank account doesn't mean that it's still not on that banks balance sheet as a reserve asset for the bank.

Who can afford to buy it ? Exactly great answer !

They may not monetize the debt but money or credits or what ever you want to call them are owed to the FED that has printed this debt into existance. They could forgive the debt owed to them as all they would have to do is unwind a large amount of the CDS (leverage) they have sold by paying in printed dollars. Then have a mini crisis and a reset with the new partially Gold backed reserve script (new world 50% Gold backed reserve currency).

mmmmmmmmmmmmmmmm ?

Goofy Thum
535
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11/12/2012 09:41 PM
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Re: The Cash Crunch: The Short Version...
None of this will happen in this manner.
Saddletramp (OP)
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11/12/2012 09:48 PM

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Re: The Cash Crunch: The Short Version...
None of this will happen in this manner.
 Quoting: 535 1326993


Well enlighten us...
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."
Anonymous Coward
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11/12/2012 09:50 PM
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Re: The Cash Crunch: The Short Version...
None of this will happen in this manner.
 Quoting: 535 1326993


Please dont be so articulate !@ 1rof1

Please add your thoughts to the thread !
Saddletramp (OP)
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11/12/2012 09:55 PM

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Re: The Cash Crunch: The Short Version...
One thing I do know is this. Since they don't trust people enough to tell them what's going on with this currency conversion to a new commodity backed currency, a lot of people will be totally drained financially...

The New World Order...same as the Old World Order...
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."
535
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11/12/2012 10:01 PM
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Re: The Cash Crunch: The Short Version...
None of this will happen in this manner.
 Quoting: 535 1326993


Please dont be so articulate !@ 1rof1

Please add your thoughts to the thread !
 Quoting: Anonymous Coward 17694439


If you were to look back on my old posts, I warned that cash is to be one of the most valuable, if not the most valuable of things.

Essentially, the analysis is somewhat correct.

Simply put:

What happens if the nation state you happen to live in decides that ALL transactions must be conducted in that particular currency?

What happens when "resources" - be they metals, energy, or labour - are fixed in value and the only way to purchase them is in your particular currency?

What happens to the value of paper (when it is legally the only thing of economic barter) when there is a radical shortage of cash?

What do you believe that citizens will clamor for in this situation?

What do you think will happen when electronic paper equivalents are the only way to have access to your assets?

What do you believe will take place when those that attempt to trade in anything other than "legal tender" are barred from electronic access to assets?

The coming times are exciting, necessary, and already set in stone. Nothing can be done about this. It is too late.

I must admit - you are the first to catch this situation. I am impressed. Best of luck.
Saddletramp (OP)
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11/12/2012 10:17 PM

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Re: The Cash Crunch: The Short Version...
None of this will happen in this manner.
 Quoting: 535 1326993


Please dont be so articulate !@ 1rof1

Please add your thoughts to the thread !
 Quoting: Anonymous Coward 17694439


If you were to look back on my old posts, I warned that cash is to be one of the most valuable, if not the most valuable of things.

Essentially, the analysis is somewhat correct.

Simply put:

What happens if the nation state you happen to live in decides that ALL transactions must be conducted in that particular currency?

What happens when "resources" - be they metals, energy, or labour - are fixed in value and the only way to purchase them is in your particular currency?

What happens to the value of paper (when it is legally the only thing of economic barter) when there is a radical shortage of cash?

What do you believe that citizens will clamor for in this situation?

What do you think will happen when electronic paper equivalents are the only way to have access to your assets?

What do you believe will take place when those that attempt to trade in anything other than "legal tender" are barred from electronic access to assets?

The coming times are exciting, necessary, and already set in stone. Nothing can be done about this. It is too late.

I must admit - you are the first to catch this situation. I am impressed. Best of luck.
 Quoting: 535 1326993


Alright, according to your theory, they will be quickly moving away from paper currency in the system. I can agree with that but for the fact they are printing huge amounts, just not putting it into circulation.

My suspicion has been they are holding this currency back so that you will have to exchange your old currency at pennies on the new commodity based dollar...

But I left this suspicion out of my initial theory because I don't have any explicit proof of this...

So what say you to the reasoning behind this suspicion of mine???
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."
Bluebird

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11/12/2012 10:23 PM

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Re: The Cash Crunch: The Short Version...
Tramp, are you thinking devaluation of the dollar on a scale similar to Latin American countries where they just mark off the last zero?

And I agree that the radicals in this administration are pushing the Cloward-Piven method for total financial collapse.
One of the most important aspects of conspiracy theories is being able to discern when there isn't one.

Oh yeah, like you'd understand anyway.

Where are we going and why am I in this handbasket?. . .J. Handy
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11/12/2012 10:23 PM
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Re: The Cash Crunch: The Short Version...
Saddletramp (OP)
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11/12/2012 10:29 PM

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Re: The Cash Crunch: The Short Version...
Tramp, are you thinking devaluation of the dollar on a scale similar to Latin American countries where they just mark off the last zero?

And I agree that the radicals in this administration are pushing the Cloward-Piven method for total financial collapse.
 Quoting: Bluebird


Precisely, my "suspicion" is that they are orchestrating a collapse for sometime in the first half of 2013, and that they are stockpiling all of this currency printed after 2010-11 in reserve for the introduction of a Basket of Commodities based currency. They will then buy out your old currency with the new currency for pennies on the dollar...

This is just the type of thing they did in the Great Depression...

And Agrentina...

Time, it seems, is not a linear phenomenon. It is cyclical after all...

Last Edited by Saddletramp on 11/12/2012 10:32 PM
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."
Bluebird

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11/12/2012 10:39 PM

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Re: The Cash Crunch: The Short Version...
Tramp, are you thinking devaluation of the dollar on a scale similar to Latin American countries where they just mark off the last zero?

And I agree that the radicals in this administration are pushing the Cloward-Piven method for total financial collapse.
 Quoting: Bluebird


Precisely, my "suspicion" is that they are orchestrating a collapse for sometime in the first half of 2013, and that they are stockpiling all of this currency printed after 2010-11 in reserve for the introduction of a Basket of Commodities based currency. They will then buy out your old currency with the new currency for pennies on the dollar...

This is just the type of thing they did in the Great Depression...

And Agrentina...

Time, it seems, is not a linear phenomenon. It is cyclical after all...
 Quoting: Saddletramp


OK, just making sure we are on the same page, as usual.

Good thread, BTW.

hf
One of the most important aspects of conspiracy theories is being able to discern when there isn't one.

Oh yeah, like you'd understand anyway.

Where are we going and why am I in this handbasket?. . .J. Handy
Saddletramp (OP)
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11/12/2012 10:45 PM

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Re: The Cash Crunch: The Short Version...

 Quoting: Anonymous Coward 17694439


Thanks for the video...best description of Basel II, mark to market accounting, and it's effects I've seen.

The Corbett Report is awesome...
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."
Saddletramp (OP)
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11/12/2012 11:08 PM

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Re: The Cash Crunch: The Short Version...
It takes a criminal genius to build a systems like this. First, in the great depression you soak everyone who turns in their one ounce gold eagles for a $20 sawbuck for a one time forty percent hit when they revalue the gold at $34 dollars per ounce, but you tell them, don't worry, your paper is still backed by gold.

Then in 1972 Nixon takes the dollar off of the gold standard, but maintains the supremecy of the currency through the Petro-Dollar system. Meanwhile, a few years later we move from deflation prior to the removal of the gold standard, to double digit inflation after the removal of the gold standard. Soaking the people for even more of their money...

Now you tell people they're going to have to turn in their fiat currency for a commodity backed currency, and that they'll have to pay (a guess here) two hundred dollars of the old fiat currency for one hundred dollars of the new basket of commodities based currency...

Or, they'll just cut the amount in your bank account in half, meanwhile, the commodities (that they own physically) will double in value...soaking the people once again...

This is Keynesianism refined to a criminal art form...

Last Edited by Saddletramp on 11/12/2012 11:10 PM
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."
littlemiracles

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11/12/2012 11:13 PM
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Re: The Cash Crunch: The Short Version...
It takes a criminal genius to build a systems like this. First, in the great depression you soak everyone who turns in their one ounce gold eagles for a $20 sawbuck for a one time forty percent hit when they revalue the gold at $34 dollars per ounce, but you tell them, don't worry, your paper is still backed by gold.

Then in 1972 Nixon takes the dollar off of the gold standard, but maintains the supremecy of the currency through the Petro-Dollar system. Meanwhile, a few years later we move from deflation prior to the removal of the gold standard, to double digit inflation after the removal of the gold standard. Soaking the people for even more of their money...

Now you tell people they're going to have to turn in their fiat currency for a commodity backed currency, and that they'll have to pay (a guess here) two hundred dollars of the old fiat currency for one hundred dollars of the new basket of commodities based currency...

Or, they'll just cut the amount in your bank account in half, meanwhile, the commodities (that they own physically) will double in value...soaking the people once again...

This is Keynesianism refined to a criminal art form...
 Quoting: Saddletramp


So, what can we do to protect ourselves if this scenario were to play out?
Anonymous Coward
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11/12/2012 11:18 PM
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Re: The Cash Crunch: The Short Version...
This video will pull everything together for you saddletramp/
Interesting and educational as hell on how monetary policy came into being through the BIS. It's long but worth every minute !

Saddletramp (OP)
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11/12/2012 11:34 PM

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Re: The Cash Crunch: The Short Version...
It takes a criminal genius to build a systems like this. First, in the great depression you soak everyone who turns in their one ounce gold eagles for a $20 sawbuck for a one time forty percent hit when they revalue the gold at $34 dollars per ounce, but you tell them, don't worry, your paper is still backed by gold.

Then in 1972 Nixon takes the dollar off of the gold standard, but maintains the supremecy of the currency through the Petro-Dollar system. Meanwhile, a few years later we move from deflation prior to the removal of the gold standard, to double digit inflation after the removal of the gold standard. Soaking the people for even more of their money...

Now you tell people they're going to have to turn in their fiat currency for a commodity backed currency, and that they'll have to pay (a guess here) two hundred dollars of the old fiat currency for one hundred dollars of the new basket of commodities based currency...

Or, they'll just cut the amount in your bank account in half, meanwhile, the commodities (that they own physically) will double in value...soaking the people once again...

This is Keynesianism refined to a criminal art form...
 Quoting: Saddletramp


So, what can we do to protect ourselves if this scenario were to play out?
 Quoting: littlemiracles


Hard assets and physical commodities of all types would be the only safe place for currency in this situation. Real Estate, Cattle, Gold, Silver, Oil, Fuel, Food...

Paper assets would be immediately slashed in half...
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."
Saddletramp (OP)
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11/12/2012 11:39 PM

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Re: The Cash Crunch: The Short Version...
The key to this entire situation is how quickly they can unwind their positions in the CDS and CDO derivative markets...

That is something to watch...a real clue to the future...

Think back to the big loses J.P. Morgan/Chase, Morgan Stanley, and Bank of America have suffered in the derivative markets over the last three or four months, then the announcement of QE3 to bail out those banks...

It all makes sense now...

Last Edited by Saddletramp on 11/13/2012 12:05 AM
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."
Saddletramp (OP)
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11/12/2012 11:45 PM

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Re: The Cash Crunch: The Short Version...
Thomas Jefferson tried to warn us! Some have tried to claim this quote was not Jefferson's, but according to all the historians of the time, it was indeed his quote...

"If the American people ever allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered..." ~ Thomas Jefferson!
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."
ADEND

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11/12/2012 11:52 PM
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Re: The Cash Crunch: The Short Version...
I can see a coming devaluation where all coins and small bills retain full value to eliminate the need to reissue these and all electronic funds and large bills are revalued.

Another scenerio could be wiping out the black market cash liquidity by giving a very short window for all old bills to be changed for new and tracking who has them in possession.
Saddletramp (OP)
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Re: The Cash Crunch: The Short Version...
This video will pull everything together for you saddletramp/
Interesting and educational as hell on how monetary policy came into being through the BIS. It's long but worth every minute !


 Quoting: Anonymous Coward 17694439


I will watch it. I had seen the Corbett Report video before, and have been aware of the BIS and their power over financial policy for a long time. And while I've had suspicions about their motivations and their ultimate solutions to the problems inherent in the Keynesian economic system, I hadn't dared believe they would actually deflate the currency to save it...

To be honest for the longest time I fell in with the hyperinflation crowd, and I thought they would just keep printing and monetizing the debt load forever or until it got totally out of control...

But I see now that they would rather deflate (and take advantage of that deflation by using their inflated currency to buy hard assets and commodities) than lose control...

Last Edited by Saddletramp on 11/13/2012 12:03 AM
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."
Saddletramp (OP)
We Don't Rent Pigs...

User ID: 1052341
United States
11/12/2012 11:59 PM

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Re: The Cash Crunch: The Short Version...
I can see a coming devaluation where all coins and small bills retain full value to eliminate the need to reissue these and all electronic funds and large bills are revalued.

Another scenerio could be wiping out the black market cash liquidity by giving a very short window for all old bills to be changed for new and tracking who has them in possession.
 Quoting: ADEND


Oh there will definitely be a short window on this, and when it's announced, even if you try to buy hard assets or commodities with the old paper money at that point, it will be too late, commodities will explode in value overnight...

I do still believe a crash, or hyperinflation situation will precede this move. Problem, Reaction, Solution...the Hegealian Dialectic...

Mainly as a way to sell this to the public!

Ordo ab Chao...

Last Edited by Saddletramp on 11/13/2012 12:01 AM
"And how can a man die better than facing fearful odds, for the ashes of his fathers, and the temples of his Gods..." ~ Horatius

"Because he told the truth, and once you've heard the truth, everything else is just cheap whiskey..."
Anonymous Coward
User ID: 21926154
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11/13/2012 12:05 AM
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Re: The Cash Crunch: The Short Version...
Point number 2 fits right in with this;


 Quoting: Outland


Wow. I love this! Finally, someone telling it like it is! Standing up even to the Paullites. How come I've never met a woman like this? A woman with a brain. Priceless.
Anonymous Coward
User ID: 17694439
United States
11/13/2012 12:07 AM
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Re: The Cash Crunch: The Short Version...
The key to this entire situation is how quickly they can unwind their positions in the CDS and CDO derivative markets...

That is something to watch...a real clue to the future...
 Quoting: Saddletramp


agreed and here is why:

I wrote this description of the worlds biggest financial problem so people could understand "in laymens terms" why we are fucked ! I use the dollar in the description of Credit Default swaps for a basis as they could be denominated in any currency.

Understand that the dollar is the defacto “Reserve currency – Petrodollar” that the world uses to transact business. As that dollar becomes more encumbered with "leverage" it's ability to be a store of value has less conviction and faith. The "only" value that a fiat paper currency can retain "is" that conviction and faith.

So, let's look at the reason all faith will be lost in that currency at some point in the future. Since the creation of the FED in 1913 the currency (Dollar) value has been controlled through inflation/deflation. In 1944 the U.S. Dollar through the Brenton Woods agreement was granted “exclusive reserve currency status”.(that status meant that any country wanting to buy oil, food or commodities would have to buy dollars “first” and then they could go into the world market to make their purchase “on” the world market (with those reserve currency notes) also it meant that "If" any country lost faith or trust (through debasement or any other reason) in that currency they could go to "any" central bank in the world and trade that paper currency for physical Gold of equal value.
(Good as Gold) In 1971 Nixon suspended Brenton Woods and took us off the Gold Standard telling other nations that they could not "now" exchange the dollar for Gold as previously promised.

Here is the key to it's downfall:

The U.S. dollar (debt) from 1971 through around 1995 was able to be removed from a balance sheet with little implication through accounting techniques claiming (debt) as a loss and could be written off through tax levy offsets called accumulated loss carry forwards and that was the end of it.

Here (around 1995) comes Blythe Masters from JP morgan and she creates what is called a "Credit Default Swap" This is essentially an insurance policy on a default to pay back a debt or loan. So, lets say for shins and giggles Greece is lent 1 trillion dollars by another country. They promise to pay that money back at a set interest rate over time. The CDS (Credit Default Swap) enables financial institutions to purchase a put (Default insurance or a bet against the underlying asset)(loaned debt never being paid back). This would be OK if only "ONE PUT" was taken out against the chance of that debt not being paid back. The problem "of the whole planet situation right now" is that this debt can be "leveraged" by 100 "PUTS" or in laymens terms (for each dollar that was lent to Greece there are $100 betting against "each" one of the dollars, that it will default and not be paid back) So, now you have 100 Trillion Dollars leveraged against the default of a 1 Trillion dollar loan. So, now Greece cannot payback the loan (debt) triggering the CDS and now everyone that bought a "PUT" want's to get paid on their bet. The next problem is that those financial institutions that sold those "PUTS" are only required to have a 6% reserve (Money held in escrow to pay claims) So, in reality those institutions only have .06 cents per dollar to pay those claims and not the “whole” dollar "required or needed" to pay and honor those claims.

This is why all of these bailouts are created so "NO ONE" is allowed to fail "Triggering" these Credit Default Swaps. The original debt is maintained through interest payments from "newly created" debt (bailouts) because the money to pay those (Claims) does not exist.........Yet.
So, you say why can't they just unwind them.
Answer, is that you can't because everyone that purchased these "PUTS" – “CDO’s” wants’ to get paid because they are classified as an asset on "their" balance sheets.

There are 1.5 Quadrillion of "known" CDS's that have been sold. The un-known amount is still a secret. That’s 1,500 Trillion

The unwind would have to consist of a partial payment and a "loss carry forward" credit that could be written off through tax levy offsets.

I would like to add that no one has mentioned the CDS (Credit Default Swap) as a backstop to deflation. If all countries balance sheets go into default, through deflation this will be the trigger to honor the CDS and the massive wave of money that is not even printed yet will drive hyperinflation. Remember that only a 3%-6% reserve is required to sell a dollars worth of CDS coverage. So only .06 cents of that Dollar exists to pay them. Also 99.9% of these deflationists miss the problem of accumulated loss carry forwards sitting on Corporations balance sheets. With "C" corps and LLC's they are on the financial statements and the "S" corps accumulated loss carry forwards are sitting on the CEO's and ownerships K-1 tax forms. These accumulated loss carry forwards are worth over .33 on the dollar and can be purchased for a few pennies. The trade and available aquisition of these accumulated loss carry forwards will assure that big business and the financial institutions never pay taxes for decades to come. So all this talk of raising taxes to increase revenues to sell seats in the gobermant are hogwash and the "real" tax increases will fall to the poor and middle class that cannot afford to buy these accumulated loss carry forwards to offset their income and profits.
535
User ID: 1326993
United States
11/13/2012 12:11 AM
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Re: The Cash Crunch: The Short Version...
None of this will happen in this manner.
 Quoting: 535 1326993


Please dont be so articulate !@ 1rof1

Please add your thoughts to the thread !
 Quoting: Anonymous Coward 17694439


If you were to look back on my old posts, I warned that cash is to be one of the most valuable, if not the most valuable of things.

Essentially, the analysis is somewhat correct.

Simply put:

What happens if the nation state you happen to live in decides that ALL transactions must be conducted in that particular currency?

What happens when "resources" - be they metals, energy, or labour - are fixed in value and the only way to purchase them is in your particular currency?

What happens to the value of paper (when it is legally the only thing of economic barter) when there is a radical shortage of cash?

What do you believe that citizens will clamor for in this situation?

What do you think will happen when electronic paper equivalents are the only way to have access to your assets?

What do you believe will take place when those that attempt to trade in anything other than "legal tender" are barred from electronic access to assets?

The coming times are exciting, necessary, and already set in stone. Nothing can be done about this. It is too late.

I must admit - you are the first to catch this situation. I am impressed. Best of luck.
 Quoting: 535 1326993


Alright, according to your theory, they will be quickly moving away from paper currency in the system. I can agree with that but for the fact they are printing huge amounts, just not putting it into circulation.

My suspicion has been they are holding this currency back so that you will have to exchange your old currency at pennies on the new commodity based dollar...

But I left this suspicion out of my initial theory because I don't have any explicit proof of this...

So what say you to the reasoning behind this suspicion of mine???
 Quoting: Saddletramp


This is not theory.

The currency will eventually be released, but as you well know, in a fractional reserve banking system - this is a minimal amount - regardless of country.

There must be enough paper currency so that the transition can be hidden. This will not happen in plain sight.

Citizens must demand the change. It is the only way.

When there is little paper money to be had, but electronic currency available in unlimited amounts, this will become the de-facto medium of trade. There will temporarily be an increase on the street value of paper currency.

Slowly, those that trade in cash will be singled out by their own neighbors and government officials. Purchases made in cash (for any amount) will be suspicious and confiscation of paper currency found in concentrated amounts will become the new reality. The normal excuses of hording, drugs, or tax evasion will be used to identify a core of individuals that do not fall into line.

There will be no exchange of any kind - at least not in a "paper to paper" sense. The exchange is to be subtle and gradual.

Once the physical amount of cash in minimized for daily transactions, a methodical constriction of higher value paper will take place. Obviously, the final goal is to remove the paper from the system.

The true and final exchange will be citizens refusing to use paper due to stigma, convenience, and various new laws. They will do the work themselves. At that point, all liquid assets and debts can be modified. This level of monetary policy and power will be unprecedented - it will finally allow for the bulk of national economies to be fully managed via created inflation and deflation as necessary.

In turn, this will usher in systems of control that otherwise could not be achieved politically. Tax evasion through the black market enforcement can more easily be identified by automation. The same can be said of drugs, gambling, and firearms.

It is though this transfer away from paper to an even greater (and eventually, total) reliance on technological systems that extreme control can be achieved with a minimum amount of resources.

Automatic enforcement is the goal. It does not matter if it is a traffic ticket for running a red light or drugs. The automation and integration of these (and all other) discrete subsystems is the overriding reason for this.

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