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Subject: US dollar collapse imminent. China wants Yuan bonds. If this rumor is true..we need the Fonz
Le Zookeeper    8/3/2009 3:27:48 AM
If this true, the dollar is dead- Kaput in 2weeks after 1 international bank shutdown.-----Read this clip-> Times have changed in the entire psychology of credit support for the USGovt and USEconomy in a manner that is shocking, if not revolutionary. The creditor nations have begun to discuss new terms of continued support. Foreign creditors are noticing Uncle Sam groveling and in growing desperate and confusion. Behind the curtains, the Chinese have clearly struck some important deals. Rumors are ripe that in a March trip to Beijing, Secy State Hillary cut a deal promising Eminent Domain on US property in return for continued USTreasury Bond support. So maybe a shopping basket of thousands of homes, hundreds of commercial buildings, scads of idle industrial plants, and a few million acres of farmland are soon to be seized by the Chinese in exchange for USTreasury Bond debt. One must wonder. The American people, i.e. USA Inc shareholders, will be the last to know in this criminal syndicate environment, a hatched cloud from the Fascist Business Model. Seemingly on a quarterly basis, something must be handed to the Chinese for continued USTBond support. The USTreasury officials and USFed have lied through their teeth about avoiding direct monetization. If the Chinese have half a brain individually, they can see the back-door monetization with collusion of foreign central banks. The Chinese are in town for the next concession. One can only wonder. Well, the Jackass has a good idea of what comes next. It is just a matter of time. USGOVT YUAN BONDS The concept can be described in very simple terms. The vehicle is devastating in its effects and consequences. What are they exactly? The USGovt might soon issue bonds, except not in US$ denomination, but rather in Yuan currency. Out of the gate (with debt signposts), the USGovt must purchase gigantic swaths of Yuan and pay with USDollars. The result is a quantum decline in the US$ exchange rate relative to everything holding the Yuan together. The Chinese decided in 2005 to tie their Yuan currency to a basket of currencies, led by the US$, the Euro, the Yen, the British Pound, and a small additional group. So the direct purchase of Yuan by the Untied States, the newest upcoming member of the Third World, will have numerous profound effects to lift other currencies. The direct consequences of USGovt Yuan Bonds would be vast, visible, lethal: ¡The USDollar exchange rate would fall with each debt issuance ¡The loan balance in USGovt debt would rise with a declining USDollar ¡The Yuan currency would be further established as a global reserve alternative ¡Continued trade settlement in Yuan terms would be enabled ¡Rise in entire cost structure to the USEconomy from commodity pricing ¡The risk of USTreasury Bond default grows with each passing new issuance The Chinese want protection and assurance against the falling USDollar and even the growing principal risk of USTreasurys. Higher bond yields mean principal bond loss. Both currency and bond loss mean a powerful combined loss. Beijing wants protection and security in exchange for continued debt support. A Yuan-based bond issuance by the USDept Treasury, sold by the USFed would accomplish this to some degree. In a few years time, if the US$ exchange rate is 15% to 30% lower, the loan balance in Yuan terms would be unchanged. The cost to the USGovt grows by that percentage however. If the yield rises, then protection can be locked by means of making the debt securities of shorter maturity, like two to five years. The Chinese have already been shifting their USTBond portfolio from long-term to short-term maturity. This has been the driving factor behind the rising 10-year USTreasury yield and the steeper yield curve. Perversely, the US banks enjoy a benefit. They can amplify their Carry Trade, borrow at the short end, invest in the long end, pocket the 2% to 3% difference, and even store their booty of bonds at the USFed itself. This is one reason the US banks are not lending to Main Street firms and households. They are too busy playing the USTBond Carry Trade under the aegis of the discredited US Federal Reserve. And the topic of Bank Consolidation has not even been raised, whereby the big US banks reverse the carry trade by buying up distressed regional banks. Maybe the Chinese will become involved in that racket as a fringe benefit. Maybe they have been tipped off to purchase stock in the giant pharmaceutical firms who will reap windfall profits as the swine flu is spread by means of faulty vaccines and forced inoculations. BOTTOM UP BUT NEXT TOP DOWN The USGovt Yuan Bond will be a significant blow to the US financial sector from a psychological standpoint, a deep undercut to US supremacy and arrogance. China has not been able to supplant the USDollar from the top down within banking circles. The Yuan Bond will serve as the sword that shatters the highest tables finally, their first phalanx
 
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reefdiver       8/3/2009 12:35:46 PM
Wonder what the effect will be on Walmart....
In other words, what will happen to the Chinese manufactured trade that America is addicted to?
 
 
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Zhang Fei       8/3/2009 3:09:15 PM
The great thing about a dollar collapse is that maybe Le Zookeeper can return to the paradise that is his home country instead of honoring us with his presence.
 
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YelliChink       8/3/2009 3:09:58 PM

Wonder what the effect will be on Walmart....

In other words, what will happen to the Chinese manufactured trade that America is addicted to?

They will collapse no doubt. They have colossus export surplus, and, what do they do? Sell Chinese government bonds? That doesn't make any sense at all. Commies have monopolized energy, transportation, banking, financial and heavy industry in China, and they are in total control of RMB exchange. Yet, they need to issue bonds in order to pay for expanding government spending? What if the major customer suddenly loses purchasing power?
 
The reason that they screwed up is none other than pure and simple corruption. The scale of corruption in China is so large that it is destined to be unprecedented and  unsurpassable. There is only two ways out: explosion or implosion. Either way would be total FUBAR.
 
The collapse of US dollar as global reserve currency might be a good thing to the US. Short-term pain is unpreventable and must be endured, so that long-term reshaping of US economy can be rationalized. As long as the US dollar remains the world's reserve currency, the US dollar will remain to be the most valuable US product and undermine any other goods and services. With US dollar once again becomes the US-only currency, US companies are forced to utilize more natural and human resources in the US. In other words, more jobs will be moved back to the US by rising oversea costs and exchange loss.
 
 
 
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Le Zookeeper    Zhang Fei   8/3/2009 7:52:55 PM

The great thing about a dollar collapse is that maybe Le Zookeeper can return to the paradise that is his home country instead of honoring us with his presence.
Again u have ur foot in the mouth- contrary to most immigrants I was a rich immigrant who moved to the US solely for the pupose of adventure. I have no complaints against my country of birth . As far as country of adoption US of A it was fun so far-keep this up and its good bye--my money is already gone. Zhang Fei u haven't met immigrants who told u to stick it up have you ?? Well Hello!!!

 
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timon_phocas    Hello Willie Sutton   8/4/2009 8:55:18 AM
Perhaps this is why Summers and Geithner were talking about middle-class tax hikes last weekend. They need close to four trillion more tax dollars to finance their new spending projects. They can't get it by taxing the rich, even if they taxed 100% of all income over a million, they'd only get about 1.3 trillion. Willie Sutton was asked why he robbed banks. His reply was, "That's where they keep the money." If the government wants more money, they'll take it from the middle class, because that;s where the next pool of money is. 
 
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FJV       8/5/2009 11:35:07 AM
Maybe the Chinese will buy Wallmart and nobody notices the difference.
 
 
 
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Zhang Fei       8/5/2009 5:21:30 PM
LZ (aka Herc the Jerk): As far as country of adoption US of A it was fun so far-keep this up and its good bye--my money is already gone.
 
Please tell us when you do in fact leave for the paradise on earth that is your home country. Maybe we can have a US board get together to celebrate your return home.
 
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tigertony       8/5/2009 7:14:46 PM

Perhaps this is why Summers and Geithner were talking about middle-class tax hikes last weekend. They need close to four trillion more tax dollars to finance their new spending projects. They can't get it by taxing the rich, even if they taxed 100% of all income over a million, they'd only get about 1.3 trillion. Willie Sutton was asked why he robbed banks. His reply was, "That's where they keep the money." If the government wants more money, they'll take it from the middle class, because that;s where the next pool of money is. 



   The middle-class need jobs to tax 1st.
 
   This will be the final nail for Mr Obama and  Mr Geithner
 
  

There will be some dips and blips along the way, but the U.S. jobless rate will continue on an overall upward trajectory for much longer than most dare to imagine. Here is why:

1) Despite all the political hype, the ?stimulus jobs? are not materializing. This is not surprising because although the U.S. Government excels at creating various make-work projects and programs, doing so takes years—not months. Moreover, as almost everyone expected, the Great White Stimulus Hope has dissipated into various short-duration, pork-barrel projects with no overarching focus, coherence, or any discernible effect. Does anyone think the next stimulus round will be any more effective?

2) The state and local government firing binge is just getting started. With sales, income, and property tax revenues plunging like never before, American states, counties, and cities are gearing up for their first-ever mass layoffs of clerks and bureaucrats, schoolteachers, librarians, dog catchers, and even police and emergency services personnel. State colleges cannot be far behind.

Not even the Great Depression saw it get this bad so early in the game—we are looking at unprecedented grief in a sector employing roughly five percent of the labor force, which has hitherto been almost entirely insulated from the larger economy.

3) Auto-industry layoffs are just warming up. Uncle Sam?s bailout has bought some time, but what about the GM (GMGMQ.PK) and Chrysler factories and hundreds of dealerships already slated for near-term closure, not to mention the collateral damage to hundreds of parts suppliers and other dependant businesses such as catering, security, and building services? The long-expected terminal downsizing of our auto industry has not even begun.

4) Tourism, hospitality, and airline industry downsizing is just around the corner. Go to any vacation spot and you will see half-empty hotels and desperate managers hoping for a turnaround in the economy before they go under. Anything short of a lightning-fast rebound to previous levels of consumer discretionary spending will see many of them close their doors.

On the transportation side, Delta (DAL) has said that it will ?reassess staffing needs?, US Airways (LCC) is asking some personnel to take unpaid vacation, and American Airlines? (UAUA) intention to cut a mere 2.4 percent of its workforce seems a little on the rosy side relative to prior experience. It looks like some serious trimming is just around the corner.

Moreover, how many soon-to-be Pan-Am?s are out there in the airline sector, ready to disappear at any moment? Does anyone believe that this perpetually near-bankrupt industry can avoid mass liquidation in the near future?

5) Precipitous demand destruction in coal, metals, and some other resources is only now leading to mass layoffs in the extractive sector. Coal shipments are already down an astounding ten percent year-on-year and with no sustained manufacturing recovery, will not be rising any time soon. No matter what happens in Washington and on Wall Street over the next few years, our nation will not require nearly as many miners as it did when the hyper-consumption economy was booming and the typical yuppie bought a ne

 
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Nanheyangrouchuan       8/5/2009 8:14:28 PM
This has nothing to do with Obama as policy, McCain would be in a similar situation.
 
The fact is that many countries and MNCs are taking this opportunity to cut the US's achille's tendon, knock us down to 2nd world status and then treat us the same as most of the non-first world countries are treated, perpetual debtors to MNCs, the World Bank and key central banks.
 
Maybe Wall St. planned this out, maybe they just went too far and assumed everything would work itself out.  But the biggest score the for world financial institutions would be to have the US as a perpetual debtor nation and certainly the Chinese, Russians, Arabs and such wouldn't mind.
 
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Nanheyangrouchuan       8/5/2009 8:28:21 PM
This sounds like almost the mother of all nutter conspiracy theories but there is something going around about this on independent media.  Basically the US victory against England upset the natural order of imperial nations led by blue bloods who ran everything, not just in Europe but the Middle East and Asia (Zhang Fei or Yellichink could tell us more about the elite Chinese families supposedly digging up 1000 year old family stashes hid during the Qing and Japanese invasions and the CCP takeover). 
 
The US system was much more merit based than the rest of the world (and still is overall) and our power has decimated the influence of the globes ancient power broker families. 
 
After the revolutionary war, no one still took the US seriously as a global power so no one made a move against us until we trounced Spain and took over their entire global holdings.  WW1 burned Europe and Asia alike, the Japanese, not lead by royalty in a substantial way also upset the order just in Asia.
 
The Great Depression was supposed to knock the US back down a notch or two but FDR did the unexpected and resorted to temporary socialism.  Nazi Germany was the result of global financing trying to take hold of Germany, but they severely underestimated Hitler and Goebbels.  Again Europe and Asian blue bloods paid the price.
 
Now this may be the next chance for the world to knock down the US and re-establish the pre-Victorian order of blue blood families and the rest of the world as serfs.  And the US has stupidly made itself a debtor nation to a rising power named China, which is rooted in that pre-Victorian system.
 
 Is crushing taxation and massively reduced services the way to avoid that?  The only way?
 
 
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