Place your head between your legs..

[awake]

...This puppy is about to crash hard.

Global Insiders Warned: U.S. Debt Crisis Could Explode at Anytime (http://www.economicpolicyjournal.com/2011/01/global-insiders-warned-us-debt-crisis.html)


Global insiders are starting to gather in Davos, Switzerland for this week's World Economic Forum. JPMorgan Chase's Jamie "Obama's Favorite Banker" Dimon will be there, as will be Treasury Secretary Geithner.

When attendees arrive and check in, they will be given their badges and a copy of a special Davos magazine, prepared especially for the event. In the magazine will be an article by Robert Rubin. He is an insider's insider. Participants will read the article. Rubin is so wired in that when insiders think of the people who are operating behind a president, it is names like Rubin's that come to mind. Jacob Lew the new director of the Office of Management and Budget is connected to Rubin. The old director of OMB, Peter Orszag, was connected to Rubin. The new head of the National Economic Council, Gene Sperling, is connected to Rubin, as was the previous NEC head, Larry Summers. It goes on. Rubin served as Treasury Secretary under Bill Clinton. He was former co-CEO of Goldman Sachs. He is co-Chairman of the Council on Foreign Relations. Got the idea? Insiders will read what he has written.

The first part of the article is about what the United States needs to do to get the economy going. It is a desperate shot taken at the buzzer from beyond half court. Rubin knows this. He is also a Keynesian, so his recommendations call for more spending that he hopes can be reversed in two or three years, once the economy "gets going". It won't work. The shot will fall short of the rim.

The second part of the article is much more significant. It is the breakdown of what is going wrong in the United States. An abbreviated version of the "Davos Warning" has been printed (http://www.ft.com/cms/s/0/5726fff8-27fd-11e0-8abc-00144feab49a.html#axzz1C2iNxo00) in FT.
Rubin wrote (my emphasis):

The risks of our fiscal position are serious and multiple. And while these risks become more severe over time as our debt position worsens, all of these either have begun to materialise or could do so in the near term, so we should act now.What multiple shapes could the crisis take? Rubin writes to the Davos insiders (My emphasis):

To be specific about the risks, deficits could crowd out private investment, which could choke off a private investment recovery. Moreover, the capacity for public investment is already diminishing, and could be exacerbated by growing entitlement costs and mounting interest payments...

Most dangerously, there is a risk of disruption to our bond and currency markets from the fear of much higher interest rates due to future imbalances or from fear of inflation because of efforts to monetise our debt. The result could be significant deficit premiums on bond market interest rates, seriously impeding private investment and growth or, worse, acute bond market declines that cause an economic crisis. This could also start in the currency markets.

While the likelihood of major market disruptions is greater in the intermediate and longer term, the shorter-term risks are also real. Market psychology can change unexpectedly and dramatically – either on its own or because of some catalyst – when underlying conditions are unsound. Possible catalysts are a debt ceiling confrontation, currency market problems, and state deficits...For emphasis, I remind you this is a former Treasury Secretary of the United States writing. One of President Obama's top outside advisers. So does Rubin think there is an easy solution to the debt problem? He writes:

Growing out of our fiscal morass over time without policy action would require inconceivable rates of growth. Muddling through with unexpectedly favourable developments is extremely unlikely. The strong probability is that either we make the hard decisions so vital to our future, or we will be forced at some point to act more harshly and with less time to thoughtfully set priorities. Our long history of political and economic resilience should augur well. But these decisions are extremely difficult, and the question is whether we have the political will to face up to what we must do. There you have it, from a man as inside as you can get:

...our structural fiscal trajectory is unsustainable with multiple, serious risks (while at the same time, our large cyclical deficits are exacerbating debt levels and interest costs)...Bottom line: The United States is in serious financial and economic trouble. It is only a matter of time before the crisis explodes. Don't take my word for it, just re-read what the former Treasury Secretary has to say. It's all there.

Robert Wenzel

[awake]

The parasites are over whelming the host.

[dannno]

Place your head between your legs..

I've tried to do that, I can't quite make it, unfortunately :(

I think it's an evolutionary trait.

[QueenB4Liberty]

Well, at least we saw it coming.

[Teaser Rate]

Maybe it’s just me, but these frequent warnings of an imminent dollar collapse from gold-standard advocates are starting to sound like doomsday predictions from religious cults.

Maybe someone who believes that the end of the dollar is near can give me a specific date to which the dollar has absolutely no chance to survive to.

[dannno]

Maybe someone who believes that the end of the dollar is near can give me a specific date to which the dollar has absolutely no chance to survive to.

2050


But it will probably be within a year or two.

[oyarde]

Maybe it’s just me, but these frequent warnings of an imminent dollar collapse from gold-standard advocates are starting to sound like doomsday predictions from religious cults.

Maybe someone who believes that the end of the dollar is near can give me a specific date to which the dollar has absolutely no chance to survive to.

Based on CBO numbers , with current spending unchecked .... 2019 .

[HOLLYWOOD]

What do you think these G-8 and G-20 Shin Digs behind closed doors of a fortress and army?

The FED will transfer $200 Trillion and call it even.

If people cannot realize the Central bankers are the evil mothers... they need to go down with the Titanic

[JoshLowry]

Maybe it’s just me, but these frequent warnings of an imminent dollar collapse from gold-standard advocates are starting to sound like doomsday predictions from religious cults.

Maybe someone who believes that the end of the dollar is near can give me a specific date to which the dollar has absolutely no chance to survive to.

You make a good point.

Many here simply want the legalization of competing currencies. Legislation requiring us to use any standard that can be gamed is foolish.

No one has an exact date, but the writing is on the wall.

[HazyHusky420]

Maybe it’s just me, but these frequent warnings of an imminent dollar collapse from gold-standard advocates are starting to sound like doomsday predictions from religious cults.

Maybe someone who believes that the end of the dollar is near can give me a specific date to which the dollar has absolutely no chance to survive to.

Just so it's harder to be wrong I would be vague and say sometime this year. Early next year at the latest.

[Teaser Rate]

You make a good point.

Many here simply want the legalization of competing currencies. Legislation requiring us to use any standard that can be gamed is foolish.

No one has an exact date, but the writing is on the wall.

I'm not really sure what legalizing of competing currencies really means; as far as I'm aware, there is no law against conducting private contracts in Canadian Dollars, Swiss Francs, or Gold or Silver coins. The reason why most people (and not just Americans) use dollars is because they trust its value, not because they are forced to.

If it means eliminating certain taxes on gold and silver, then I wouldn't object. But I doubt such tax cuts will lead to a significant increase in contracts conducted in gold and silver.

It if means eliminating legal tender laws entirely, I wouldn't support it because the costs of the transition wouldn't be worth the results. Just think of how many legal problems would be caused if courts wouldn't be able to assign a uniform standard of payment plaintiffs cannot reject.

[Michigan11]

Based on CBO numbers , with current spending unchecked .... 2019 .

Yeah that is what I have seen as well. We have untill 2019 at the latest unless huge cuts are made, but in reality it's before that if the bond buyers have this information as well, they aren't going to hit the wall. Interesting discussion for sure, in the right context.

[oyarde]

Yeah that is what I have seen as well. We have untill 2019 at the latest unless huge cuts are made, but in reality it's before that if the bond buyers have this information as well, they aren't going to hit the wall. Interesting discussion for sure, in the right context.

Yes at the latest with current spending , maybe 2018 .

[Travlyr]

Maybe it’s just me, but these frequent warnings of an imminent dollar collapse from gold-standard advocates are starting to sound like doomsday predictions from religious cults.I would agree with you if it was Fred Flintstone, Homer Simpson, or Eric Cartman making these doomsday predictions, but when Federal Reserve Chairman Ben Bernanke, United States Secretary of the Treasury, Timothy Geithner, who was previously the president of the Federal Reserve Bank of New York, and Robert Rubin, who served as the United States Secretary of the Treasury during both the first and second Clinton administrations, and he spent 26 years at Goldman Sachs eventually serving as a member of the Board, and Co-Chairman from 1990-1992. His most prominent post-government role was as Director and Senior Counselor of Citigroup, where he performed ongoing advisory and representational roles for the firm. From November to December 2007, he served temporarily as Chairman of Citigroup. When these guy's claim that there are problems with the currency ... it is worth taking note.

Essentially, what these economic heavyweights are telling us is that Ludwig von Mises, Murray Rothbard, and Ron Paul are right. The end of the fiat dollar is coming. When? Your guess would be as good as mine if you simply would take the time to read-up on the origin of the Federal Reserve and fiat money. It is your choice.



I'm not really sure what legalizing of competing currencies really means; as far as I'm aware, there is no law against conducting private contracts in Canadian Dollars, Swiss Francs, or Gold or Silver coins. The reason why most people (and not just Americans) use dollars is because they trust its value, not because they are forced to.

Competing currencies would be allowing anybody to print money just like anybody can make shoes. Currently, competing currencies are a crime. Why? Bernard von NotHaus was not a threat to the citizens; he was a threat to the central banker's monopoly on creating money. Should he be in jail? I don't see any reason for this nonsense.



http://www.youtube.com/watch?v=MK4aj8g2M9I

[Vessol]

Wait, the elites are now saying that the crash is imminent? ...

...

*puts head between knees*

[torchbearer]

I'm not really sure what legalizing of competing currencies really means; as far as I'm aware, there is no law against conducting private contracts in Canadian Dollars, Swiss Francs, or Gold or Silver coins. The reason why most people (and not just Americans) use dollars is because they trust its value, not because they are forced to.

If it means eliminating certain taxes on gold and silver, then I wouldn't object. But I doubt such tax cuts will lead to a significant increase in contracts conducted in gold and silver.

It if means eliminating legal tender laws entirely, I wouldn't support it because the costs of the transition wouldn't be worth the results. Just think of how many legal problems would be caused if courts wouldn't be able to assign a uniform standard of payment plaintiffs cannot reject.

If we make a contract, in which i agreed to pay you gold for a service.
You render a service, and i pay you in FRNs. You cannot deny the payment of that debt in the fake money.

[Kludge]

Competing currencies would be allowing anybody to print money just like anybody can make shoes. Currently, competing currencies are a crime. Why? Bernard von NotHaus was not a threat to the citizens; he was a threat to the central banker's monopoly on creating money. Should he be in jail? I don't see any reason for this nonsense.

Actually, in the Liberty Dollar case, he pretty clearly committed fraud. He claimed his coins could be used normally as money, which would have been fine, but he claimed they were worth the arbitrary face value he was selling them for, not the melt value, and went so far as to denote his coins on the front in USD value. It was very misleading, especially when they started getting small businesses to accept the coins at face value.

[torchbearer]

Actually, in the Liberty Dollar case, he pretty clearly committed fraud. He claimed his coins could be used normally as money, which would have been fine, but he claimed they were worth the arbitrary face value he was selling them for, not the melt value, and went so far as to denote his coins on the front in USD value. It was very misleading, especially when they started getting small businesses to accept the coins at face value.

Only in the matrix is paper money real and PM money is fake.

[Nic]

I don't have the time to look it up, but aren't there several municipalities in the U.S. using their own currency?

[buck000]

Maybe it’s just me, but these frequent warnings of an imminent dollar collapse from gold-standard advocates are starting to sound like doomsday predictions from religious cults.

Maybe someone who believes that the end of the dollar is near can give me a specific date to which the dollar has absolutely no chance to survive to.

I share your concern about gold bugs, but the idea of "fiscal trajectory" makes me think of this:

http://www.iconoclast-investor.com/wp-content/uploads/2010/11/National-Debt-1115.jpg

Seems like something's gotta give...!

[dannno]

I don't have the time to look it up, but aren't there several municipalities in the U.S. using their own currency?

Not bloody likely :confused:

[oyarde]

Not bloody likely :confused:

I dunno , I think I read an article a year or two ago about a town where you could buy a coupn for $10 valued at $20 or something from a list of participating merchants .......

[Kludge]

I don't have the time to look it up, but aren't there several municipalities in the U.S. using their own currency?

Yes, this has been increasingly common and is done as a form of protectionism. Obviously, they still aren't legal currency, so not all stores must accept them and USDs are still always an alternative way to pay debt. http://www.usatoday.com/money/economy/2009-04-05-scrip_N.htm

[Travlyr]

Actually, in the Liberty Dollar case, he pretty clearly committed fraud. He claimed his coins could be used normally as money, which would have been fine, but he claimed they were worth the arbitrary face value he was selling them for, not the melt value, and went so far as to denote his coins on the front in USD value. It was very misleading, especially when they started getting small businesses to accept the coins at face value.
Looks like drummed up charges. First they said it was okay, then they stole everything he had.
The promoter of the Liberty Dollar asserts that Claudia Dickens, spokeswoman for the U.S. Treasury Department's Bureau of Engraving and Printing, had previously said American Liberty Currency is legitimate. Dickens was quoted as having said "There's nothing illegal about this", after the Treasury Department's legal team reviewed the currency. "As long as it doesn't say 'legal tender' there's nothing wrong with it."
https://secure.wikimedia.org/wikipedia/en/wiki/Liberty_Dollar

[oyarde]

Looks like drummed up charges. First they said it was okay, then they stole everything he had.
https://secure.wikimedia.org/wikipedia/en/wiki/Liberty_Dollar

Everyone is good at something ... theft being what they excel at .

[Travlyr]

Everyone is good at something ... theft being what they excel at .

No doubt!

[Teaser Rate]

I would agree with you if it was Fred Flintstone, Homer Simpson, or Eric Cartman making these doomsday predictions, but when Federal Reserve Chairman Ben Bernanke, United States Secretary of the Treasury, Timothy Geithner, who was previously the president of the Federal Reserve Bank of New York, and Robert Rubin, who served as the United States Secretary of the Treasury during both the first and second Clinton administrations, and he spent 26 years at Goldman Sachs eventually serving as a member of the Board, and Co-Chairman from 1990-1992. His most prominent post-government role was as Director and Senior Counselor of Citigroup, where he performed ongoing advisory and representational roles for the firm. From November to December 2007, he served temporarily as Chairman of Citigroup. When these guy's claim that there are problems with the currency ... it is worth taking note.

Essentially, what these economic heavyweights are telling us is that Ludwig von Mises, Murray Rothbard, and Ron Paul are right. The end of the fiat dollar is coming. When? Your guess would be as good as mine if you simply would take the time to read-up on the origin of the Federal Reserve and fiat money. It is your choice.

If you re-read my post, it should be clear that my main objection wasn’t with the idea of a possible dollar collapse, but with the notion that it’s imminent.

To be clear, I don’t think the government can continue to run trillion dollar deficits for much longer without eventually debasing the currency or defaulting on its obligations. I don’t think any serious economist disagrees with that assessment, not even Paul Krugman.

The national debt is a bit like an iceberg which we’re on track to collide with, and different people have different estimations of how long we have left to shift course to avoid hitting it. My main issue with the alarmists who claim that it’s already too late is to save the dollar is that they send the wrong message; instead of advocating that we turn the ship around, they’re telling people to run to the lifeboats.

They also happen to be wrong every time they make predictions and give big-government defenders fodder to attack conservatives/libertarians who are concerned about the debt. See Paul Krugman's smug response (http://krugman.blogs.nytimes.com/2010/03/18/crying-fire-fire-in-noahs-flood-2/) to Peter Schiff's failed prophecies of doom.


Competing currencies would be allowing anybody to print money just like anybody can make shoes. Currently, competing currencies are a crime. Why? Bernard von NotHaus was not a threat to the citizens; he was a threat to the central banker's monopoly on creating money. Should he be in jail? I don't see any reason for this nonsense.



http://www.youtube.com/watch?v=MK4aj8g2M9I

I have no opposition to individuals printing their own currency; however, I doubt that changing that law would make a significant change in the use of the US dollar. My major disagreement with most competing currency proponents is that I don’t want to abolish the US dollar. I think that providing a stable currency is one of the few things the government should continue to do, if people want to start using gold coins or Monopoly money instead, then they should be free to do so.


If we make a contract, in which i agreed to pay you gold for a service.
You render a service, and i pay you in FRNs. You cannot deny the payment of that debt in the fake money.

Imagine a scenario where I accidentally drive my car into your house/store and after suing me in civil court, the judge orders me to pay you $20,000; should you be able to refuse that payment because you don’t consider it to be a legitimate store of value?


I share your concern about gold bugs, but the idea of "fiscal trajectory" makes me think of this:

http://www.iconoclast-investor.com/wp-content/uploads/2010/11/National-Debt-1115.jpg

Seems like something's gotta give...!

I don’t disagree with your sentiment, but I’d like to point out that your chart is misleading. The one below is paints a much more accurate picture.

http://img600.imageshack.us/img600/373/gdpy.png