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The Dollar Crash of '07 by Mike Whitney Originally Posted by Chalmers Johnson Whatever future developments may prove to be, my best guess is that the
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Default The Dollar Crash of '07
Quote:
The Dollar Crash of '07 by Mike Whitney
Quote:
Originally Posted by Chalmers Johnson
“Whatever future developments may prove to be, my best guess is that the US will continue to maintain a façade of Constitutional government and drift along until financial bankruptcy overtakes it.” Chalmers Johnson, “Empire V. Democracy: Why Nemesis is at our Door”
Quote:
Originally Posted by Mike Whitney
Every time a US Dollar is traded, a check is issued on an account that is overdrawn by $8.6 trillion. (That is the present size of the national debt) It is, without question, the biggest swindle in history. Flimsy sheets of faded-green scrip are eagerly exchanged for costly goods and services without any regard for the real value of the currency.
And, the real value of the currency is absolutely nothing!
How is it that this scam persists when people appear to be aware of the massive debt and deficits which underwrite the dollar? Do they still believe in that puerile fairy tale about “the full faith and credit” of the United States backing up every greenback? Or are they pacified by the wizened graybeards, like Alan Greenspan and Hank Paulson, who soothingly bray about the “strong dollar policy”?
What gibberish.
In truth, the dollar rests on the crumbling foundation of consumerism and oil. The American consumer’s gluttonous appetite for spending has kept the greenback flying high for decades. Economists marvel at America’s lust for electronic gadgetry, the latest fashions, and useless knick-knacks. They call our profligate spending “the engine for global growth”; and indeed it is. No other country in the world is nearly as addicted to binge-spending as the US consumer. As long as he can beg, borrow or steal his way into the shopping mall; the orgy of spending is bound to continue. (Consumer spending is 70% of GDP)
Regrettably, there are signs that the US consumer is beginning to buckle from the weight of personal debt. The Associated Press reported just this week that “people are saving at the slowest rate since the Great Depression… and the Commerce Dept stated that the nation’s personal savings rate for 2006 was a negative 1%, the worst showing in 73 years.”
Additionally, credit card debt has skyrocketed, which is an indication that homeowners are no longer able to siphon easy-money from their home-equity. The nose-diving real estate market has slowed refinancing to a dribble; cutting off the additional $825 billion of cash which was extracted from home-equity just last year.
Clearly, the well is running dry; the housing bubble is hang-gliding into the abyss and there’s nothing Fed-master Bernanke can do to save it from its inevitable crash-landing.
The central banks around the world are now watching for any sign that the American consumer is about to give up the ghost. As soon as that happens, bank managers everywhere will swing into action, ditch their U.S.Dollars and head for the exits. When the “global engine” sputters to a halt; it’ll be curtains for the greenback.
The Oil-extortion Racket
The dollar’s link to oil has helped to keep it afloat but, in truth, it’s just another dismal rip-off. More than 70% of the world’s oil is denominated in USD; a virtual monopoly for the USA. Until last year, even Russia was using dollars in its oil transactions with Germany. Imagine a comparable deal, like the US purchasing oil from Canada in rubles?!?
It’s lunacy; and yet this is the system the US hopes to preserve so it can maintain its unique status as the world’s “reserve currency” and keep expanding its debt into perpetuity. It explains why the Federal Reserve has been able to increase the money supply by a whopping 15% for the last 6 years! Trillions of dollars are now circulating in the oil trade keeping the value of the dollar high by creating artificial demand.
The other reason the dollar hasn’t succumbed to hyperinflation is because the current account deficit is running at roughly $800 billion per year. The Asian giants (China and Japan) and the oil exporting countries are mopping up more than $700 billion of our red ink every year!
The dollar’s link to oil forces central banks to maintain humongous stockpiles of USD to pay the steadily rising price of oil that keeps their industries and vehicles running. Otherwise they would have chucked the flaccid greenback years ago and converted to the more steadfast euro.
The so-called ‘global economic system’ has nothing to do with competition, free markets or private enterprise; that’s just public relations gobbledygook. In practice, it is the world’s biggest extortion racket, wherein, the “Godfather”-- Uncle Sam-- holds a gun to the heads of his subjects and forces them to use our fiat-paper to purchase the oil that lubricates their economies.
Why would anyone accept a personal check from a nation that owes the bank more than $8.6 trillion dollars?
Why, indeed?
It’s blackmail, pure and simple; and yet, the Chinese, Japanese etc. continue to play along knowing full-well that we neither have the inclination nor the resources to pay them back in kind?
It’s madness.
Every so often, a rebel nation will try to break the shackle of greenback-tyranny and operate outside the US-run system?
For example, Saddam Hussein switched to euros 6 months before he was carpet-bombed in Shock and Awe. His defiance only hastened his ultimate downfall.
Now Iran and Venezuela are threatening to convert to euros. Is it any surprise that they are both on Bush’s axis-of-evil hit list?
Russia has already made the conversion to euros and rubles (and has considerably depleted his supplies of USD) but, of course, regime change is more difficult when a state has nuclear weapons. Instead, the mainstream media is conducting an impressive “Swift Boat” campaign against Putin, smearing him as a “Russian autocrat” who is “rolling back democracy”. At the same time, the Bush administration is threatening to deploy missile systems in Eastern Europe and ratcheting up the pressure in the former Soviet republics.
Bush would rather restart the Cold War than abandon the supremacy of the greenback.
But, why? Is Dollar-primacy really that crucial to our economy?
The greenback is the baling wire that keeps the global economy in the hands of the doddering old misers at the Federal Reserve. It’s the cornerstone of the whole wretched system; a system which now includes torture, extraordinary rendition, and myriad other war crimes.
The young Muslim men who are abducted off the streets of Europe and Asia and taken to CIA Black Sites where they are waterboarded or stacked in naked pyramids; are tortured in defense of the crumpled piece of green paper we carry in our pants pockets.
Think I’m kidding?
Just look at Bush’s budget for 2007-2008; $700 billion for foreign wars?!? There’s no way the US can pay off that debt through the normal means of increasing exports. In fact, Bush has already said that he plans to preserve his unfunded tax cuts whether they produce massive deficits or not.
What Bush plans to do is force the foreign central banks to hold more dollar-based assets, thus, thrusting our gigantic debt onto our trading partners. According to Bob Chapman of The International Forecaster, “US debt was up 10.1% to $4.085 trillion and accounts for 58.8% OF ALL THE CREDIT ISSUED GLOBALLY LAST YEAR. The US is producing more debt than the rest of the world combined.
As long as foreign lenders are willing to take our paper, Bush will keep expanding our debt. As Chalmers Johnson opined, “We are dependent on ‘the kindness of strangers’”. (The Blanche Dubois economy)
Of course, if the central banks grow tired of this pyramid-scheme and dump the dollar; the world can get on with the business of addressing global warming, poverty, AIDs, Peak Oil, nuclear proliferation etc. That won’t happen as long as the dollar reigns supreme and a small cadre of unelected racketeers at the Fed continue Gerry-rig the system.
Economic justice and equitable distribution of wealth begin with greater parity among the currencies. That requires “regime change” for the greenback and a loosening of its tyrannical grip on the system.
Sleepwalking in the Weimar U.S.A.
The good news is that the Bush administration is pushing the dollar towards extinction anyway. Another few years of $800 billion trade deficits, lavish unfunded tax cuts for the mega-rich, and a Pentagon budget of $700 billion-plus; and the old greenback will be going the way of the Dodo. Jim Willie of GoldenJackass.com summarized it this way:
“Never in the history of central bankers has the hidden coordination, influenced pressure, gargantuan money creation, doctored statistics, and interference with financial markets been so broad, so deep, and so profound. My allegation is clear, that we now live in Weimar times, as has been warned for two years worth of scribbles. Collectively, they have abused the privilege of printing money, and in doing so, have guaranteed a gold bull market. … The more heavily the counterfeit press dispenses electronic dollars, devoted to operations, to credit, to consumer spending, to military adventures, to good old fashioned fraud, the gold bull benefits from ample new oxygen and blood flow”.
Willie is right; the system is rotten to the core. Once the dollar crashes, other currencies rush in to fill the void generating greater competition between the energy and manufacturing giants. A new paradigm will emerge distributing power more equitably among the states. It’s a way to resuscitate a system that is currently held together through force of arms.
Besides, how long will China and Japan continue to abet Washington’s war-mongering adventurism? My guess is that the daggers have already been sharpened in Beijing, Caracas, Delhi and Moscow. Everyone is just waiting for Bush to cross that invisible line in the sand before they fling their greenbacks into the jet-stream and wait for Goliath to tumble.
That “invisible line in the sand” is Iran.
The world is at a crossroads and everyone who can fog a mirror knows it. The superpower model of global governance has failed miserably. We need more responsible stewardship of the planet and its resources.
How can we build our economies when a handful of western plutocrats control the spigot for quickly dwindling oil reserves? How can we attack climate change when those same blinkered reprobates employ pseudo-scientists to dispute global warming? How can we address nuclear proliferation when neocon militarists believe in “useable” low-yield, bunker-busting warheads?
The model is hopelessly shattered. We’d be better off boarding-up the White House and the Federal Reserve and starting from Square One.
The world needs a break from Washington’s wasteful spending and unprovoked wars. At the same time, foreign creditors are increasingly reluctant to keep financing America’s extravagant consumption. And, no one is hoodwinked by Bush’s “war on terror” scam; a conflict that was clearly concocted to assert control over the world’s remaining resources.
The world is realigning according to mutual interests and a shared vision of the future. The rise of energy alliances in Latin America and Asia (particularly the Shanghai Cooperation Organization (SCO) which now controls most new oil deposits and output) signals the waning of western influence and the ascendancy of a new energy paradigm. Power is progressively shifting away from Washington.
That’s bad news for the greenback which depends on its linkage to oil to sustain its enormous debt.
The dollar now faces challenges from all directions. Western elites have savaged the country’s economic base by hollowing out our manufacturing base in order to destroy the American labor movement.
Free trade has transformed the US into the biggest creditor nation in history. The country exports nothing but bombs and misery.
Also, as Congressman Ron Paul notes, “Most knowledgeable people assume that inflation of the money supply is not only going to continue, but accelerate. This anticipation, plus the fact that many new dollars have been created over the past 15 years that have not been fully discounted, guarantees the further depreciation of the dollar.”
Eventually, the markets will catch on, foreign lenders will stop buying our Treasuries, and the dollar will fall through the floor.
The laws of gravity apply to economics as well as science.
Red flags are going up everywhere. China’s central bank issued a warning in December about the risks of the weakening dollar:
“If external capital stops flowing into the US, a significant drop in the dollar may occur with consumption and investment shrinking, interest rates rising, and financial markets experiencing turbulence, endangering global financial and economic stability. There could be adjustments to how European private capital, Asian foreign exchange reserves and oil export proceeds are invested.”
Yes, of course, a complete economic meltdown with capital fleeing the United States to foreign countries and the American economy collapsing in a heap.
The Chinese central bank statement adds:
“If the US current account deficit continues to grow faster than GDP, then the investment value of US assets may be subject to doubts and challenges and the willingness of investors to continue holding and buying US financial products may weaken. This could cause changes in capital flows, the exchange rates of major currencies, and the value of foreign exchange assets.”
The Chinese bank is giving the Bush Team a chapter out of Econ. 101: “If you keep spending more than you are taking in; the stock market will fall, the dollar will plummet, and the US economy will tank”.
What could be clearer than that?
The administration, however, chooses to ignore the basic laws of economics and pursue a madcap plan to wage aggressive war across the planet and pilfer the world’s oil reserves.
So far, the results have been less than reassuring.
The Decline of U.S. Sovereignty; blame it on the Fed
The United States set off on the road to perdition when it transferred the power to create money to the privately-owned Federal Reserve. It’s been downhill ever since.
The man who can set interest rates and create money is more powerful than the man who can move armies and change laws. By conferring that authority on the Federal Reserve we have assured that the policies that govern our economy are decided by unelected members of the ruling elite whose choices will naturally reflect the interests of their class.
The wealth gap that has opened up like a yawning chasm between rich and poor in America originated with the class-based policies of the Fed. The massive equity bubbles which arose from artificially low interest rates and the deliberate destruction of the dollar by reckless increases in the money supply have shifted trillions of dollars from working class Americans to the predatory aristocrats at the top of the economic food chain. The gulf between rich and poor has grown so wide that it now poses a direct threat to our increasingly fragile democracy. That’s why Thomas Jefferson said:
“If the American people ever allow private banks to control the issue of our currency, first by inflation, then by deflation, the banks and the corporations that will grow up will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing of power should be taken from the banks and restored to the people, to whom it properly belongs.”
Free people cannot control their own destiny unless they control their own currency. The Federal Reserve must be abolished.
IMHO: All of this is the lead up to the North American Union and the "forgiveness of all debt" proposition. This will mark the end of the "beginning of the end"...
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Default Re: The Dollar Crash of '07
Great work Chip, I've been following the dollar crash since 2003 and it has been a wild ride. I've been buying up physical silver in order to benefit from the collapse, it's been one of the best decisions I've made so far.
Back when Silver was in the $4.50 - $6 range I loaded the boat.. maxing all my credit cards out and dumping all my cash for some fine Silver bars. It paid off quite well as Silver and Gold have been on a long-term uptrend, silver trading as high as $15 at one point.
Silver is still at a good point to purchase, with a medium-term target at $22 and a long-term target around $110. Seems off-the-wall, I know, but if you adjust the old high for inflation (even using the unrealistic inflation figures often utilized by economists), then you get a major move in the works.
Back in the 60's Palladium showed traders what was possible when it vaulted from around $14 to $1100.
Anyhow, I think its great that you are helping to educate the community on this matter. I will post whatever pertinent articles I come across as well. I hope that the word gets out to the true patriots and they protect themselves from the financial meltdown that is looming.
If anyone's interested in some day-to-day economic analysis, I regularly post economic articles at economics.mystrangemind.com, usually they are precious metal or dollar related, since that is where most of the pivotal events are going to occur imo, as the Fed pumps liquidity into the system in order to make the equity markets appear as if they aren't falling.
Thats the funny thing about the DJIA. The index has gone no-where while the dollar collapses, but the average investor doesn't take that into account. In reality the DJIA, in inflation adjusted dollars, is in the 6000 range. What a meltdown!
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Default Re: The Dollar Crash of '07
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Originally Posted by Wapo
Mortgage Report Rattles Markets
Dow Down 2% On a Big Rise In Delinquencies
By David Cho and Dina ElBoghdady
Washington Post Staff Writers
Wednesday, March 14, 2007; Page A01
A national survey showing that a soaring number of homeowners failed to make their mortgage payments in the last quarter of 2006 rattled lawmakers in Washington and the markets in New York yesterday, as the Dow Jones industrial average plummeted 2 percent, or nearly 243 points.
The report, which sent every major stock market indicator tumbling when it was released at noon, revealed that the problems in the market for "subprime" mortgages -- loans made to home buyers with blemished credit histories -- might be spilling over to the broader mortgage industry, analysts said.
While the number of risky borrowers who missed payments climbed to a four-year high, the number of foreclosures on all homes jumped to its highest level in nearly four decades, according to the survey by the Mortgage Bankers Association. Home buyers who relied on loans insured by the Federal Housing Administration also had record default rates.
Several lawmakers, including House Financial Services Committee Chairman Barney Frank (D-Mass.), said they would offer legislation to rein in risky mortgages. Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) told reporters that Congress will have to consider providing several billion dollars of aid to at-risk homeowners.
The survey was released as the market for high-risk mortgages is collapsing. Over the past few years, highflying lenders of these loans helped millions of Americans buy homes they otherwise could not afford. The firms have seen their businesses unravel as these homeowners could not make their monthly payments. Some companies have been delisted from stock exchanges in recent weeks, while more than two dozen have shut their doors.
The consequences of the subprime mortgage meltdown now are extending beyond those lenders. Washington Mutual, the nation's largest savings and loan, told analysts that its loans to risky home buyers were performing "exceedingly poorly" and would be a drag on its earnings. H&R Block said it will delay reporting its third-quarter results because woes in the mortgage market forced the firm to recalculate its earnings, resulting in a $29 million loss that wasn't included in its previous filings.
Shares of Washington Mutual fell 5 percent, to $39.79, its lowest in 16 months. H&R Block fell 4 percent during the day and another 5 percent to $19.05 after its announcement.
"It's pretty clear that the fear is the increase in delinquencies in the subprime market will work its way through the entire financial systems," said Alan Kral, managing director of Trevor Stewart Burton & Jacobsen.
Traders said the impact of the delinquency survey was immediate. After the numbers were released, the Dow shed 70 points in half an hour. The survey measured the last three months of 2006, and some on Wall Street are worried the beginning of this year will be worse.
"People are concerned that the subprime problems are going to infect all of housing and the rest of the economy," said Donald H. Straszheim, an economist at Roth Capital Partners.
Federal and state investigators are looking at what has been going on in the mortgage industry. New Century, one of the largest subprime mortgage lenders, said yesterday it had received a federal grand jury subpoena for its trading and accounting practices. New Century, which stopped making loans last week, was delisted by the New York Stock Exchange yesterday.
Massachusetts' top securities regulator, Secretary of State William Galvin, said yesterday that he issued subpoenas to two Wall Street investment banks, UBS Securities and Bear Stearns, as part of a probe into whether the firms' researchers ignored the mounting problems among subprime lenders.
On top of these investigations, other prominent subprime lenders shed more light on their financial woes yesterday. Shares of Accredited Home Lenders Holding, another large subprime lender, lost 65 percent of their value after the San Diego firm said that it had not met the financial terms of its creditors, which are now demanding money that Accredited does not have. This is the same situation that New Century is facing.
Locally, Friedman, Billings, Ramsey Group is considering selling its First NLC subprime mortgage loan business after cutting costs and tightening loan policies. The Arlington company said in a statement that it "will explore strategic alternatives to maximize the value" of the division.
Selling loans to people with questionable credit was a popular trend over the past few years. Lenders could repackage these mortgages as bonds and sell them on the market for high returns. These lenders believed homeowners simply could sell or refinance their homes if they had trouble making payments.
But when the market cooled, and home prices leveled off, millions of those borrowers could not afford to refinance or sell their homes, wreaking havoc on the once-thriving subprime market.
Especially onerous were the adjustable-rate mortgages, which offered low teaser rates that spiked in later years.
Those types of mortgages grew in popularity in spring 2004, when interest rates hit a low, said Barry Glassman, senior vice president of financial planning firm Cassaday & Co. But now that these mortgages are starting to adjust, some borrowers face interest payments that are at more than double the original rate.
Yesterday's Mortgage Bankers Association report, which surveyed 43.5 million loans, shows how this phenomenon played out in the last three months of 2006.
According to the report, 4.95 percent of all home mortgages were delinquent, meaning they were at least 30 days late. The most dramatic rise was among subprime borrowers. The survey also showed that lenders initiated foreclosures against 0.54 percent of borrowers -- or about one in every 200 -- the highest in the 37-year history of the survey.
While most of the turmoil has been driven by the subprime market, even credit-worthy borrowers appear to be facing some of the same issues. Their delinquency and foreclosure rates also inched upwards. The rate of foreclosures that started during the fourth quarter more than doubled since the start of 2006 for credit-worthy borrowers.
"There's some indication here, and it's not apocalyptic by any means, that the problems might not be contained in the subprime market," said Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University.
Staff writer Tomoeh Murakami Tse contributed to this report.
Never agree to an Ajustable Rate Mortgage!! A decision to "qualify" and sign an agreement for one of these loans without thinking it through (thoroughly) could lead you straight to bankruptcy!!! Be careful!
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Default Re: The Dollar Crash of '07
I think perhaps you are forgetting what truly backs our economy. It isn't gold, nor is it oil. It is force. The empires of old kept afloat by taking control of trade rotues, both land and sea. As airborne trade routes became prevalent and the global economy emerged, the old imperial model was invalidated. A new strategy was needed, and we saw it first emerge in the cold war.
Frank Herbert said that "Absolute power is the power to destroy." He was referring to the melange spice of Arrakis, a substance upon which travel and progress was dependent in the fictional empire of Dune. In that scenario, the spice could just as easily represent real world oil pipelines.
I've admittedly done little research into the solid numbers here. Does anyone know offhand exactly what percentage of the world's circulated oil flows through pipelines that our within the range of our military influence? My educated guess would put it somewhere well over fifty percent. Also, does anyone know how much oil the USA currently holds in reserve? How long would we be able to keep our country running on those reserves?
I'm not entirely sure, but I think it is feasibly within our power to stop the flow of oil to much of the world. I think not doing so would be worth a lot to growing nations.
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Default Re: The Dollar Crash of '07
i think you're not realizing how badly our situation with oil has become.
from what i can tell, our dependency on oil very much resembles a drug addiction. for a drug addict, due to a faulty dopamine-regulation system and an inability to manage the stresses of life, in the human mind drug use becomes ranked with the "Eat-Sleep-Kill-Fuck" survival mechanisms we, as humans has. getting high is thus made as important/serious to the individual as a life-or-death, survival situation.
just like this, our country has come to depend on the securement of as much oil as possible akin to our country's survival.
military power means nothing if our finances have fallen out from underneath us, because all that military power we have securing oil sources around the world would be worthless if suddenly there was no longer any supporting the military operation.
the truth is, we're behind on the alternate fuels research, especially when it comes to mass implementation, and we are now at a point where, since the end of the cold war, every US foreign policy decision has been weighed down by the securement of foreign sources of crude oil. This is why we seem to be ignoring North Korea, and instead focus on disrupting Middle East countries who are announcing oil bourses, and flipping their oil sales from US dollars to other currencies.
If we lose our seat of power in the world, which right now is largely dependent on our economic prowess, unfortunately we have decades of inner rotting that will collapse pretty badly when the going gets tough.
I'm not sure if you it serves any purpose to go comparing right now to other ages in history, but what i believe we're on the verge of, which has been coming for years now, is something similar to the rise and collapse of the Roman Empire and plenty of other giants.
It all boils down to what my Freshman year high school history teacher told us about on something like the second day of class: the downfall of the Greeks, and the downfall of Rome was largely due to them succumbing to their own "hubris".
It was a Greek concept, and according to our textbooks it was one of the greatest examples of "learning from history's mistakes so as not to repeat them", that a nation would grow in power, grow far too self-confident, far over-exceed their power, and then collapse due to a weakened internal state.
hey, i'm here in America to stay, I've decided, and I'm willing to go down with the ship, but that's what weed, John Stewart, and a small, portable survivalism library, are for.
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Default Re: The Dollar Crash of '07
So should I start buying silver and gold, or not? Seems like it's a yes. When I do buy it though, do I personally get the physical bars to put somewhere for safe keeping? Or do banks hold it? Personally, I don't want anyone but my own house to hold it, but it's not like interest rates go up on that, do they? Sorry if these questions seem a little obvious or dumb, I'm still in high school and have no real credit card or mortgage education. ANYWAYS...
I remember I bought the book The Coming Economic Collapse by Stephen Leeb... I bought it about 9 months ago but got bored with it, so my mom read it. She said she was very disturbed by it and I could tell she was stressed out after reading it. Leeb wrote about it being a good idea to buy silver and gold as well as educating yourself in a lot of farming and self-sufficiency survival type education because, with an economic collapse, there is no one buying anything - including food.
Just as some advice, I'd also encourage all of you who buy into this to buy a gun or two. With mass hysteria people will be looting shit and who knows if it includes homes. Just a thought. This is very informative and greatly appreciated. You just helped save a few lives if you think about it. Good work man.
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Default Re: The Dollar Crash of '07
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Originally Posted by Signal Lost View Post
This is very informative and greatly appreciated. You just helped save a few lives if you think about it. Good work man.
Personally, I thank Mike Whitney and a few other good journalists out there for keeping us all informed in regards to the financial chaos that is about to be unleashed.
Good questions! The value of silver is much lower than gold (obviously). So, if you invest in silver it could get quite heavy and very difficult to lug around in the case where you must relocate. Gold would be the way to go if you have the finances to do so. Most gold these days is littered with other metals called "filler" and could cause issues when trying to cash out on it. I would advise purchasing a more natural version of gold. Nuggets, and gold dust pulled right out of the ground is the best way to do it. There will still be other elements in nuggets but better natural elements rather than deliberate. Also, if you are in good health, enjoy the outdoors and live in an area known to have gold deposits in the ground, it never hurts to go search for it yourself. I have been a "prospector" for over 8 years now and I know for a fact that it can be profitable if done correctly. If not, you can find nuggets for sale all over the web. Whether or not you keep it in your home is up to you. If you do, I would invest in a small fire proof safe and mount it somewhere out of sight. Hope this helps...
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Default Re: The Dollar Crash of '07
Quote:
Originally Posted by shane View Post
I think perhaps you are forgetting what truly backs our economy. It isn't gold, nor is it oil. It is force. The empires of old kept afloat by taking control of trade rotues, both land and sea. As airborne trade routes became prevalent and the global economy emerged, the old imperial model was invalidated. A new strategy was needed, and we saw it first emerge in the cold war.
While this is true Shane, I would point out the same facts that Sinister did it a similar way; take a look at the Euro, and its value compared to the USD. And, this is the current reasons for any and all current military action.
Quote:
Originally Posted by shane
Frank Herbert said that "Absolute power is the power to destroy." He was referring to the melange spice of Arrakis, a substance upon which travel and progress was dependent in the fictional empire of Dune. In that scenario, the spice could just as easily represent real world oil pipelines.
Good analogy. However melange spice wasn't destroying the environment, nor quickly becoming unpopular worldwide.
Quote:
Originally Posted by shane
I've admittedly done little research into the solid numbers here. Does anyone know offhand exactly what percentage of the world's circulated oil flows through pipelines that our within the range of our military influence? My educated guess would put it somewhere well over fifty percent. Also, does anyone know how much oil the USA currently holds in reserve? How long would we be able to keep our country running on those reserves?
Military influence is over-rated and does very little to convince nations to trade in the USD verses every other currency in the world. That is without creating more "democratic nations". Besides, the good ole US of A is far too stretched to wield its mighty power at this point. We have been reduced to nukes and nukes alone. Kind of scary.
Quote:
Originally Posted by shane
I'm not entirely sure, but I think it is feasibly within our power to stop the flow of oil to much of the world. I think not doing so would be worth a lot to growing nations.
It'd be rather difficult to stop the flow of oil between the middle east and China. Especially from the geographical standpoint. If a tree falls in a forest with no one to hear it, then does it make a sound?
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Default Re: The Dollar Crash of '07
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Originally Posted by Chip Lewis View Post
Good questions! The value of silver is much lower than gold (obviously). So, if you invest in silver it could get quite heavy and very difficult to lug around in the case where you must relocate. Gold would be the way to go if you have the finances to do so.
Currently this is the case, since the ratio is about 50:1, but in the event that there is a flight to physical metal, due to a currency crisis or something of that nature, then the ratio is likely to close up, as was demonstrated during the last big precious metals run.
Quote:
Originally Posted by Chip Lewis View Post
Most gold these days is littered with other metals called "filler" and could cause issues when trying to cash out on it. I would advise purchasing a more natural version of gold. Nuggets, and gold dust pulled right out of the ground is the best way to do it. There will still be other elements in nuggets but better natural elements rather than deliberate.
To the best of my knowledge, if you purchase an assayed coin such as an American Eagle, Canadian Maple Leaf, Australian Luna, etc, you will be getting 99.9% pure gold and these coins are accepted by almost any coin dealer. I have never heard of anyone receiving fraudulent assayed merchandise, and if you are buying from a reputable dealer, this is almost certain not to happen.
I'm not sure what the market is for gold nuggets, but I'd imagine that it would be more difficult and costly to unload them, since they would require assay and people would be more likely to accept assayed coins (i would, at least).
Quote:
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Also, if you are in good health, enjoy the outdoors and live in an area known to have gold deposits in the ground, it never hurts to go search for it yourself. I have been a "prospector" for over 8 years now and I know for a fact that it can be profitable if done correctly. If not, you can find nuggets for sale all over the web. Whether or not you keep it in your home is up to you. If you do, I would invest in a small fire proof safe and mount it somewhere out of sight. Hope this helps...
It is probably a good idea to keep it in your home, buried in the ground, or somewhere safe. Probably better buried in the ground than in a bank vault, where the possibility of confiscation exists.
Also, it is a good idea to keep its location and the amount a secret, for security reasons.
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Default Re: The Dollar Crash of '07
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Originally Posted by kahotep View Post
Currently this is the case, since the ratio is about 50:1, but in the event that there is a flight to physical metal, due to a currency crisis or something of that nature, then the ratio is likely to close up, as was demonstrated during the last big precious metals run.
Makes plenty of sense.
Quote:
Originally Posted by kahotep
To the best of my knowledge, if you purchase an assayed coin such as an American Eagle, Canadian Maple Leaf, Australian Luna, etc, you will be getting 99.9% pure gold and these coins are accepted by almost any coin dealer. I have never heard of anyone receiving fraudulent assayed merchandise, and if you are buying from a reputable dealer, this is almost certain not to happen.
I suppose you are correct.
Quote:
Originally Posted by kahotep
I'm not sure what the market is for gold nuggets, but I'd imagine that it would be more difficult and costly to unload them, since they would require assay and people would be more likely to accept assayed coins (i would, at least).
I was referring to jewelry and gold trinkits and things. If you know for a fact the gold is gold by all means go for it. However, I always liked spending 6 to 8 hours browsing through the rocks and dust at the bottom of a shallow creek with the possibility of actually turning a profit. Have fun, make money. Seems like a no brainer.
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Default The Dollar Crash of '07
Quote:
The Dollar Crash of '07 by Mike Whitney
Quote:
Originally Posted by Chalmers Johnson
“Whatever future developments may prove to be, my best guess is that the US will continue to maintain a façade of Constitutional government and drift along until financial bankruptcy overtakes it.” Chalmers Johnson, “Empire V. Democracy: Why Nemesis is at our Door”
Quote:
Originally Posted by Mike Whitney
Every time a US Dollar is traded, a check is issued on an account that is overdrawn by $8.6 trillion. (That is the present size of the national debt) It is, without question, the biggest swindle in history. Flimsy sheets of faded-green scrip are eagerly exchanged for costly goods and services without any regard for the real value of the currency.
And, the real value of the currency is absolutely nothing!
How is it that this scam persists when people appear to be aware of the massive debt and deficits which underwrite the dollar? Do they still believe in that puerile fairy tale about “the full faith and credit” of the United States backing up every greenback? Or are they pacified by the wizened graybeards, like Alan Greenspan and Hank Paulson, who soothingly bray about the “strong dollar policy”?
What gibberish.
In truth, the dollar rests on the crumbling foundation of consumerism and oil. The American consumer’s gluttonous appetite for spending has kept the greenback flying high for decades. Economists marvel at America’s lust for electronic gadgetry, the latest fashions, and useless knick-knacks. They call our profligate spending “the engine for global growth”; and indeed it is. No other country in the world is nearly as addicted to binge-spending as the US consumer. As long as he can beg, borrow or steal his way into the shopping mall; the orgy of spending is bound to continue. (Consumer spending is 70% of GDP)
Regrettably, there are signs that the US consumer is beginning to buckle from the weight of personal debt. The Associated Press reported just this week that “people are saving at the slowest rate since the Great Depression… and the Commerce Dept stated that the nation’s personal savings rate for 2006 was a negative 1%, the worst showing in 73 years.”
Additionally, credit card debt has skyrocketed, which is an indication that homeowners are no longer able to siphon easy-money from their home-equity. The nose-diving real estate market has slowed refinancing to a dribble; cutting off the additional $825 billion of cash which was extracted from home-equity just last year.
Clearly, the well is running dry; the housing bubble is hang-gliding into the abyss and there’s nothing Fed-master Bernanke can do to save it from its inevitable crash-landing.
The central banks around the world are now watching for any sign that the American consumer is about to give up the ghost. As soon as that happens, bank managers everywhere will swing into action, ditch their U.S.Dollars and head for the exits. When the “global engine” sputters to a halt; it’ll be curtains for the greenback.
The Oil-extortion Racket
The dollar’s link to oil has helped to keep it afloat but, in truth, it’s just another dismal rip-off. More than 70% of the world’s oil is denominated in USD; a virtual monopoly for the USA. Until last year, even Russia was using dollars in its oil transactions with Germany. Imagine a comparable deal, like the US purchasing oil from Canada in rubles?!?
It’s lunacy; and yet this is the system the US hopes to preserve so it can maintain its unique status as the world’s “reserve currency” and keep expanding its debt into perpetuity. It explains why the Federal Reserve has been able to increase the money supply by a whopping 15% for the last 6 years! Trillions of dollars are now circulating in the oil trade keeping the value of the dollar high by creating artificial demand.
The other reason the dollar hasn’t succumbed to hyperinflation is because the current account deficit is running at roughly $800 billion per year. The Asian giants (China and Japan) and the oil exporting countries are mopping up more than $700 billion of our red ink every year!
The dollar’s link to oil forces central banks to maintain humongous stockpiles of USD to pay the steadily rising price of oil that keeps their industries and vehicles running. Otherwise they would have chucked the flaccid greenback years ago and converted to the more steadfast euro.
The so-called ‘global economic system’ has nothing to do with competition, free markets or private enterprise; that’s just public relations gobbledygook. In practice, it is the world’s biggest extortion racket, wherein, the “Godfather”-- Uncle Sam-- holds a gun to the heads of his subjects and forces them to use our fiat-paper to purchase the oil that lubricates their economies.
Why would anyone accept a personal check from a nation that owes the bank more than $8.6 trillion dollars?
Why, indeed?
It’s blackmail, pure and simple; and yet, the Chinese, Japanese etc. continue to play along knowing full-well that we neither have the inclination nor the resources to pay them back in kind?
It’s madness.
Every so often, a rebel nation will try to break the shackle of greenback-tyranny and operate outside the US-run system?
For example, Saddam Hussein switched to euros 6 months before he was carpet-bombed in Shock and Awe. His defiance only hastened his ultimate downfall.
Now Iran and Venezuela are threatening to convert to euros. Is it any surprise that they are both on Bush’s axis-of-evil hit list?
Russia has already made the conversion to euros and rubles (and has considerably depleted his supplies of USD) but, of course, regime change is more difficult when a state has nuclear weapons. Instead, the mainstream media is conducting an impressive “Swift Boat” campaign against Putin, smearing him as a “Russian autocrat” who is “rolling back democracy”. At the same time, the Bush administration is threatening to deploy missile systems in Eastern Europe and ratcheting up the pressure in the former Soviet republics.
Bush would rather restart the Cold War than abandon the supremacy of the greenback.
But, why? Is Dollar-primacy really that crucial to our economy?
The greenback is the baling wire that keeps the global economy in the hands of the doddering old misers at the Federal Reserve. It’s the cornerstone of the whole wretched system; a system which now includes torture, extraordinary rendition, and myriad other war crimes.
The young Muslim men who are abducted off the streets of Europe and Asia and taken to CIA Black Sites where they are waterboarded or stacked in naked pyramids; are tortured in defense of the crumpled piece of green paper we carry in our pants pockets.
Think I’m kidding?
Just look at Bush’s budget for 2007-2008; $700 billion for foreign wars?!? There’s no way the US can pay off that debt through the normal means of increasing exports. In fact, Bush has already said that he plans to preserve his unfunded tax cuts whether they produce massive deficits or not.
What Bush plans to do is force the foreign central banks to hold more dollar-based assets, thus, thrusting our gigantic debt onto our trading partners. According to Bob Chapman of The International Forecaster, “US debt was up 10.1% to $4.085 trillion and accounts for 58.8% OF ALL THE CREDIT ISSUED GLOBALLY LAST YEAR. The US is producing more debt than the rest of the world combined.
As long as foreign lenders are willing to take our paper, Bush will keep expanding our debt. As Chalmers Johnson opined, “We are dependent on ‘the kindness of strangers’”. (The Blanche Dubois economy)
Of course, if the central banks grow tired of this pyramid-scheme and dump the dollar; the world can get on with the business of addressing global warming, poverty, AIDs, Peak Oil, nuclear proliferation etc. That won’t happen as long as the dollar reigns supreme and a small cadre of unelected racketeers at the Fed continue Gerry-rig the system.
Economic justice and equitable distribution of wealth begin with greater parity among the currencies. That requires “regime change” for the greenback and a loosening of its tyrannical grip on the system.
Sleepwalking in the Weimar U.S.A.
The good news is that the Bush administration is pushing the dollar towards extinction anyway. Another few years of $800 billion trade deficits, lavish unfunded tax cuts for the mega-rich, and a Pentagon budget of $700 billion-plus; and the old greenback will be going the way of the Dodo. Jim Willie of GoldenJackass.com summarized it this way:
“Never in the history of central bankers has the hidden coordination, influenced pressure, gargantuan money creation, doctored statistics, and interference with financial markets been so broad, so deep, and so profound. My allegation is clear, that we now live in Weimar times, as has been warned for two years worth of scribbles. Collectively, they have abused the privilege of printing money, and in doing so, have guaranteed a gold bull market. … The more heavily the counterfeit press dispenses electronic dollars, devoted to operations, to credit, to consumer spending, to military adventures, to good old fashioned fraud, the gold bull benefits from ample new oxygen and blood flow”.
Willie is right; the system is rotten to the core. Once the dollar crashes, other currencies rush in to fill the void generating greater competition between the energy and manufacturing giants. A new paradigm will emerge distributing power more equitably among the states. It’s a way to resuscitate a system that is currently held together through force of arms.
Besides, how long will China and Japan continue to abet Washington’s war-mongering adventurism? My guess is that the daggers have already been sharpened in Beijing, Caracas, Delhi and Moscow. Everyone is just waiting for Bush to cross that invisible line in the sand before they fling their greenbacks into the jet-stream and wait for Goliath to tumble.
That “invisible line in the sand” is Iran.
The world is at a crossroads and everyone who can fog a mirror knows it. The superpower model of global governance has failed miserably. We need more responsible stewardship of the planet and its resources.
How can we build our economies when a handful of western plutocrats control the spigot for quickly dwindling oil reserves? How can we attack climate change when those same blinkered reprobates employ pseudo-scientists to dispute global warming? How can we address nuclear proliferation when neocon militarists believe in “useable” low-yield, bunker-busting warheads?
The model is hopelessly shattered. We’d be better off boarding-up the White House and the Federal Reserve and starting from Square One.
The world needs a break from Washington’s wasteful spending and unprovoked wars. At the same time, foreign creditors are increasingly reluctant to keep financing America’s extravagant consumption. And, no one is hoodwinked by Bush’s “war on terror” scam; a conflict that was clearly concocted to assert control over the world’s remaining resources.
The world is realigning according to mutual interests and a shared vision of the future. The rise of energy alliances in Latin America and Asia (particularly the Shanghai Cooperation Organization (SCO) which now controls most new oil deposits and output) signals the waning of western influence and the ascendancy of a new energy paradigm. Power is progressively shifting away from Washington.
That’s bad news for the greenback which depends on its linkage to oil to sustain its enormous debt.
The dollar now faces challenges from all directions. Western elites have savaged the country’s economic base by hollowing out our manufacturing base in order to destroy the American labor movement.
Free trade has transformed the US into the biggest creditor nation in history. The country exports nothing but bombs and misery.
Also, as Congressman Ron Paul notes, “Most knowledgeable people assume that inflation of the money supply is not only going to continue, but accelerate. This anticipation, plus the fact that many new dollars have been created over the past 15 years that have not been fully discounted, guarantees the further depreciation of the dollar.”
Eventually, the markets will catch on, foreign lenders will stop buying our Treasuries, and the dollar will fall through the floor.
The laws of gravity apply to economics as well as science.
Red flags are going up everywhere. China’s central bank issued a warning in December about the risks of the weakening dollar:
“If external capital stops flowing into the US, a significant drop in the dollar may occur with consumption and investment shrinking, interest rates rising, and financial markets experiencing turbulence, endangering global financial and economic stability. There could be adjustments to how European private capital, Asian foreign exchange reserves and oil export proceeds are invested.”
Yes, of course, a complete economic meltdown with capital fleeing the United States to foreign countries and the American economy collapsing in a heap.
The Chinese central bank statement adds:
“If the US current account deficit continues to grow faster than GDP, then the investment value of US assets may be subject to doubts and challenges and the willingness of investors to continue holding and buying US financial products may weaken. This could cause changes in capital flows, the exchange rates of major currencies, and the value of foreign exchange assets.”
The Chinese bank is giving the Bush Team a chapter out of Econ. 101: “If you keep spending more than you are taking in; the stock market will fall, the dollar will plummet, and the US economy will tank”.
What could be clearer than that?
The administration, however, chooses to ignore the basic laws of economics and pursue a madcap plan to wage aggressive war across the planet and pilfer the world’s oil reserves.
So far, the results have been less than reassuring.
The Decline of U.S. Sovereignty; blame it on the Fed
The United States set off on the road to perdition when it transferred the power to create money to the privately-owned Federal Reserve. It’s been downhill ever since.
The man who can set interest rates and create money is more powerful than the man who can move armies and change laws. By conferring that authority on the Federal Reserve we have assured that the policies that govern our economy are decided by unelected members of the ruling elite whose choices will naturally reflect the interests of their class.
The wealth gap that has opened up like a yawning chasm between rich and poor in America originated with the class-based policies of the Fed. The massive equity bubbles which arose from artificially low interest rates and the deliberate destruction of the dollar by reckless increases in the money supply have shifted trillions of dollars from working class Americans to the predatory aristocrats at the top of the economic food chain. The gulf between rich and poor has grown so wide that it now poses a direct threat to our increasingly fragile democracy. That’s why Thomas Jefferson said:
“If the American people ever allow private banks to control the issue of our currency, first by inflation, then by deflation, the banks and the corporations that will grow up will deprive the people of all property until their children wake up homeless on the continent their fathers conquered. The issuing of power should be taken from the banks and restored to the people, to whom it properly belongs.”
Free people cannot control their own destiny unless they control their own currency. The Federal Reserve must be abolished.
IMHO: All of this is the lead up to the North American Union and the "forgiveness of all debt" proposition. This will mark the end of the "beginning of the end"...
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Default Re: The Dollar Crash of '07
Great work Chip, I've been following the dollar crash since 2003 and it has been a wild ride. I've been buying up physical silver in order to benefit from the collapse, it's been one of the best decisions I've made so far.
Back when Silver was in the $4.50 - $6 range I loaded the boat.. maxing all my credit cards out and dumping all my cash for some fine Silver bars. It paid off quite well as Silver and Gold have been on a long-term uptrend, silver trading as high as $15 at one point.
Silver is still at a good point to purchase, with a medium-term target at $22 and a long-term target around $110. Seems off-the-wall, I know, but if you adjust the old high for inflation (even using the unrealistic inflation figures often utilized by economists), then you get a major move in the works.
Back in the 60's Palladium showed traders what was possible when it vaulted from around $14 to $1100.
Anyhow, I think its great that you are helping to educate the community on this matter. I will post whatever pertinent articles I come across as well. I hope that the word gets out to the true patriots and they protect themselves from the financial meltdown that is looming.
If anyone's interested in some day-to-day economic analysis, I regularly post economic articles at economics.mystrangemind.com, usually they are precious metal or dollar related, since that is where most of the pivotal events are going to occur imo, as the Fed pumps liquidity into the system in order to make the equity markets appear as if they aren't falling.
Thats the funny thing about the DJIA. The index has gone no-where while the dollar collapses, but the average investor doesn't take that into account. In reality the DJIA, in inflation adjusted dollars, is in the 6000 range. What a meltdown!
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Default Re: The Dollar Crash of '07
Quote:
Originally Posted by Wapo
Mortgage Report Rattles Markets
Dow Down 2% On a Big Rise In Delinquencies
By David Cho and Dina ElBoghdady
Washington Post Staff Writers
Wednesday, March 14, 2007; Page A01
A national survey showing that a soaring number of homeowners failed to make their mortgage payments in the last quarter of 2006 rattled lawmakers in Washington and the markets in New York yesterday, as the Dow Jones industrial average plummeted 2 percent, or nearly 243 points.
The report, which sent every major stock market indicator tumbling when it was released at noon, revealed that the problems in the market for "subprime" mortgages -- loans made to home buyers with blemished credit histories -- might be spilling over to the broader mortgage industry, analysts said.
While the number of risky borrowers who missed payments climbed to a four-year high, the number of foreclosures on all homes jumped to its highest level in nearly four decades, according to the survey by the Mortgage Bankers Association. Home buyers who relied on loans insured by the Federal Housing Administration also had record default rates.
Several lawmakers, including House Financial Services Committee Chairman Barney Frank (D-Mass.), said they would offer legislation to rein in risky mortgages. Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) told reporters that Congress will have to consider providing several billion dollars of aid to at-risk homeowners.
The survey was released as the market for high-risk mortgages is collapsing. Over the past few years, highflying lenders of these loans helped millions of Americans buy homes they otherwise could not afford. The firms have seen their businesses unravel as these homeowners could not make their monthly payments. Some companies have been delisted from stock exchanges in recent weeks, while more than two dozen have shut their doors.
The consequences of the subprime mortgage meltdown now are extending beyond those lenders. Washington Mutual, the nation's largest savings and loan, told analysts that its loans to risky home buyers were performing "exceedingly poorly" and would be a drag on its earnings. H&R Block said it will delay reporting its third-quarter results because woes in the mortgage market forced the firm to recalculate its earnings, resulting in a $29 million loss that wasn't included in its previous filings.
Shares of Washington Mutual fell 5 percent, to $39.79, its lowest in 16 months. H&R Block fell 4 percent during the day and another 5 percent to $19.05 after its announcement.
"It's pretty clear that the fear is the increase in delinquencies in the subprime market will work its way through the entire financial systems," said Alan Kral, managing director of Trevor Stewart Burton & Jacobsen.
Traders said the impact of the delinquency survey was immediate. After the numbers were released, the Dow shed 70 points in half an hour. The survey measured the last three months of 2006, and some on Wall Street are worried the beginning of this year will be worse.
"People are concerned that the subprime problems are going to infect all of housing and the rest of the economy," said Donald H. Straszheim, an economist at Roth Capital Partners.
Federal and state investigators are looking at what has been going on in the mortgage industry. New Century, one of the largest subprime mortgage lenders, said yesterday it had received a federal grand jury subpoena for its trading and accounting practices. New Century, which stopped making loans last week, was delisted by the New York Stock Exchange yesterday.
Massachusetts' top securities regulator, Secretary of State William Galvin, said yesterday that he issued subpoenas to two Wall Street investment banks, UBS Securities and Bear Stearns, as part of a probe into whether the firms' researchers ignored the mounting problems among subprime lenders.
On top of these investigations, other prominent subprime lenders shed more light on their financial woes yesterday. Shares of Accredited Home Lenders Holding, another large subprime lender, lost 65 percent of their value after the San Diego firm said that it had not met the financial terms of its creditors, which are now demanding money that Accredited does not have. This is the same situation that New Century is facing.
Locally, Friedman, Billings, Ramsey Group is considering selling its First NLC subprime mortgage loan business after cutting costs and tightening loan policies. The Arlington company said in a statement that it "will explore strategic alternatives to maximize the value" of the division.
Selling loans to people with questionable credit was a popular trend over the past few years. Lenders could repackage these mortgages as bonds and sell them on the market for high returns. These lenders believed homeowners simply could sell or refinance their homes if they had trouble making payments.
But when the market cooled, and home prices leveled off, millions of those borrowers could not afford to refinance or sell their homes, wreaking havoc on the once-thriving subprime market.
Especially onerous were the adjustable-rate mortgages, which offered low teaser rates that spiked in later years.
Those types of mortgages grew in popularity in spring 2004, when interest rates hit a low, said Barry Glassman, senior vice president of financial planning firm Cassaday & Co. But now that these mortgages are starting to adjust, some borrowers face interest payments that are at more than double the original rate.
Yesterday's Mortgage Bankers Association report, which surveyed 43.5 million loans, shows how this phenomenon played out in the last three months of 2006.
According to the report, 4.95 percent of all home mortgages were delinquent, meaning they were at least 30 days late. The most dramatic rise was among subprime borrowers. The survey also showed that lenders initiated foreclosures against 0.54 percent of borrowers -- or about one in every 200 -- the highest in the 37-year history of the survey.
While most of the turmoil has been driven by the subprime market, even credit-worthy borrowers appear to be facing some of the same issues. Their delinquency and foreclosure rates also inched upwards. The rate of foreclosures that started during the fourth quarter more than doubled since the start of 2006 for credit-worthy borrowers.
"There's some indication here, and it's not apocalyptic by any means, that the problems might not be contained in the subprime market," said Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University.
Staff writer Tomoeh Murakami Tse contributed to this report.
Never agree to an Ajustable Rate Mortgage!! A decision to "qualify" and sign an agreement for one of these loans without thinking it through (thoroughly) could lead you straight to bankruptcy!!! Be careful!
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Default Re: The Dollar Crash of '07
I think perhaps you are forgetting what truly backs our economy. It isn't gold, nor is it oil. It is force. The empires of old kept afloat by taking control of trade rotues, both land and sea. As airborne trade routes became prevalent and the global economy emerged, the old imperial model was invalidated. A new strategy was needed, and we saw it first emerge in the cold war.
Frank Herbert said that "Absolute power is the power to destroy." He was referring to the melange spice of Arrakis, a substance upon which travel and progress was dependent in the fictional empire of Dune. In that scenario, the spice could just as easily represent real world oil pipelines.
I've admittedly done little research into the solid numbers here. Does anyone know offhand exactly what percentage of the world's circulated oil flows through pipelines that our within the range of our military influence? My educated guess would put it somewhere well over fifty percent. Also, does anyone know how much oil the USA currently holds in reserve? How long would we be able to keep our country running on those reserves?
I'm not entirely sure, but I think it is feasibly within our power to stop the flow of oil to much of the world. I think not doing so would be worth a lot to growing nations.
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Default Re: The Dollar Crash of '07
i think you're not realizing how badly our situation with oil has become.
from what i can tell, our dependency on oil very much resembles a drug addiction. for a drug addict, due to a faulty dopamine-regulation system and an inability to manage the stresses of life, in the human mind drug use becomes ranked with the "Eat-Sleep-Kill-Fuck" survival mechanisms we, as humans has. getting high is thus made as important/serious to the individual as a life-or-death, survival situation.
just like this, our country has come to depend on the securement of as much oil as possible akin to our country's survival.
military power means nothing if our finances have fallen out from underneath us, because all that military power we have securing oil sources around the world would be worthless if suddenly there was no longer any supporting the military operation.
the truth is, we're behind on the alternate fuels research, especially when it comes to mass implementation, and we are now at a point where, since the end of the cold war, every US foreign policy decision has been weighed down by the securement of foreign sources of crude oil. This is why we seem to be ignoring North Korea, and instead focus on disrupting Middle East countries who are announcing oil bourses, and flipping their oil sales from US dollars to other currencies.
If we lose our seat of power in the world, which right now is largely dependent on our economic prowess, unfortunately we have decades of inner rotting that will collapse pretty badly when the going gets tough.
I'm not sure if you it serves any purpose to go comparing right now to other ages in history, but what i believe we're on the verge of, which has been coming for years now, is something similar to the rise and collapse of the Roman Empire and plenty of other giants.
It all boils down to what my Freshman year high school history teacher told us about on something like the second day of class: the downfall of the Greeks, and the downfall of Rome was largely due to them succumbing to their own "hubris".
It was a Greek concept, and according to our textbooks it was one of the greatest examples of "learning from history's mistakes so as not to repeat them", that a nation would grow in power, grow far too self-confident, far over-exceed their power, and then collapse due to a weakened internal state.
hey, i'm here in America to stay, I've decided, and I'm willing to go down with the ship, but that's what weed, John Stewart, and a small, portable survivalism library, are for.
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Signal Lost Signal Lost is offline
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Default Re: The Dollar Crash of '07
So should I start buying silver and gold, or not? Seems like it's a yes. When I do buy it though, do I personally get the physical bars to put somewhere for safe keeping? Or do banks hold it? Personally, I don't want anyone but my own house to hold it, but it's not like interest rates go up on that, do they? Sorry if these questions seem a little obvious or dumb, I'm still in high school and have no real credit card or mortgage education. ANYWAYS...
I remember I bought the book The Coming Economic Collapse by Stephen Leeb... I bought it about 9 months ago but got bored with it, so my mom read it. She said she was very disturbed by it and I could tell she was stressed out after reading it. Leeb wrote about it being a good idea to buy silver and gold as well as educating yourself in a lot of farming and self-sufficiency survival type education because, with an economic collapse, there is no one buying anything - including food.
Just as some advice, I'd also encourage all of you who buy into this to buy a gun or two. With mass hysteria people will be looting shit and who knows if it includes homes. Just a thought. This is very informative and greatly appreciated. You just helped save a few lives if you think about it. Good work man.
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Default Re: The Dollar Crash of '07
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Originally Posted by Signal Lost View Post
This is very informative and greatly appreciated. You just helped save a few lives if you think about it. Good work man.
Personally, I thank Mike Whitney and a few other good journalists out there for keeping us all informed in regards to the financial chaos that is about to be unleashed.
Good questions! The value of silver is much lower than gold (obviously). So, if you invest in silver it could get quite heavy and very difficult to lug around in the case where you must relocate. Gold would be the way to go if you have the finances to do so. Most gold these days is littered with other metals called "filler" and could cause issues when trying to cash out on it. I would advise purchasing a more natural version of gold. Nuggets, and gold dust pulled right out of the ground is the best way to do it. There will still be other elements in nuggets but better natural elements rather than deliberate. Also, if you are in good health, enjoy the outdoors and live in an area known to have gold deposits in the ground, it never hurts to go search for it yourself. I have been a "prospector" for over 8 years now and I know for a fact that it can be profitable if done correctly. If not, you can find nuggets for sale all over the web. Whether or not you keep it in your home is up to you. If you do, I would invest in a small fire proof safe and mount it somewhere out of sight. Hope this helps...
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Default Re: The Dollar Crash of '07
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Originally Posted by shane View Post
I think perhaps you are forgetting what truly backs our economy. It isn't gold, nor is it oil. It is force. The empires of old kept afloat by taking control of trade rotues, both land and sea. As airborne trade routes became prevalent and the global economy emerged, the old imperial model was invalidated. A new strategy was needed, and we saw it first emerge in the cold war.
While this is true Shane, I would point out the same facts that Sinister did it a similar way; take a look at the Euro, and its value compared to the USD. And, this is the current reasons for any and all current military action.
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Frank Herbert said that "Absolute power is the power to destroy." He was referring to the melange spice of Arrakis, a substance upon which travel and progress was dependent in the fictional empire of Dune. In that scenario, the spice could just as easily represent real world oil pipelines.
Good analogy. However melange spice wasn't destroying the environment, nor quickly becoming unpopular worldwide.
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I've admittedly done little research into the solid numbers here. Does anyone know offhand exactly what percentage of the world's circulated oil flows through pipelines that our within the range of our military influence? My educated guess would put it somewhere well over fifty percent. Also, does anyone know how much oil the USA currently holds in reserve? How long would we be able to keep our country running on those reserves?
Military influence is over-rated and does very little to convince nations to trade in the USD verses every other currency in the world. That is without creating more "democratic nations". Besides, the good ole US of A is far too stretched to wield its mighty power at this point. We have been reduced to nukes and nukes alone. Kind of scary.
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I'm not entirely sure, but I think it is feasibly within our power to stop the flow of oil to much of the world. I think not doing so would be worth a lot to growing nations.
It'd be rather difficult to stop the flow of oil between the middle east and China. Especially from the geographical standpoint. If a tree falls in a forest with no one to hear it, then does it make a sound?
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Default Re: The Dollar Crash of '07
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Originally Posted by Chip Lewis View Post
Good questions! The value of silver is much lower than gold (obviously). So, if you invest in silver it could get quite heavy and very difficult to lug around in the case where you must relocate. Gold would be the way to go if you have the finances to do so.
Currently this is the case, since the ratio is about 50:1, but in the event that there is a flight to physical metal, due to a currency crisis or something of that nature, then the ratio is likely to close up, as was demonstrated during the last big precious metals run.
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Most gold these days is littered with other metals called "filler" and could cause issues when trying to cash out on it. I would advise purchasing a more natural version of gold. Nuggets, and gold dust pulled right out of the ground is the best way to do it. There will still be other elements in nuggets but better natural elements rather than deliberate.
To the best of my knowledge, if you purchase an assayed coin such as an American Eagle, Canadian Maple Leaf, Australian Luna, etc, you will be getting 99.9% pure gold and these coins are accepted by almost any coin dealer. I have never heard of anyone receiving fraudulent assayed merchandise, and if you are buying from a reputable dealer, this is almost certain not to happen.
I'm not sure what the market is for gold nuggets, but I'd imagine that it would be more difficult and costly to unload them, since they would require assay and people would be more likely to accept assayed coins (i would, at least).
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Originally Posted by Chip Lewis View Post
Also, if you are in good health, enjoy the outdoors and live in an area known to have gold deposits in the ground, it never hurts to go search for it yourself. I have been a "prospector" for over 8 years now and I know for a fact that it can be profitable if done correctly. If not, you can find nuggets for sale all over the web. Whether or not you keep it in your home is up to you. If you do, I would invest in a small fire proof safe and mount it somewhere out of sight. Hope this helps...
It is probably a good idea to keep it in your home, buried in the ground, or somewhere safe. Probably better buried in the ground than in a bank vault, where the possibility of confiscation exists.
Also, it is a good idea to keep its location and the amount a secret, for security reasons.
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Default Re: The Dollar Crash of '07
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Currently this is the case, since the ratio is about 50:1, but in the event that there is a flight to physical metal, due to a currency crisis or something of that nature, then the ratio is likely to close up, as was demonstrated during the last big precious metals run.
Makes plenty of sense.
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Originally Posted by kahotep
To the best of my knowledge, if you purchase an assayed coin such as an American Eagle, Canadian Maple Leaf, Australian Luna, etc, you will be getting 99.9% pure gold and these coins are accepted by almost any coin dealer. I have never heard of anyone receiving fraudulent assayed merchandise, and if you are buying from a reputable dealer, this is almost certain not to happen.
I suppose you are correct.
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Originally Posted by kahotep
I'm not sure what the market is for gold nuggets, but I'd imagine that it would be more difficult and costly to unload them, since they would require assay and people would be more likely to accept assayed coins (i would, at least).
I was referring to jewelry and gold trinkits and things. If you know for a fact the gold is gold by all means go for it. However, I always liked spending 6 to 8 hours browsing through the rocks and dust at the bottom of a shallow creek with the possibility of actually turning a profit. Have fun, make money. Seems like a no brainer.
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