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Us Faces Global Funding Crisis, Warns Merrill Lynch

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The country depends on Asian, Russian and Middle Eastern investors to fund much of its $700bn (£350bn) current account deficit, leaving it far more vulnerable to a collapse of confidence than Japan in the early 1990s after the Nikkei bubble burst. Britain and other Anglo-Saxon deficit states could face a similar retreat by foreign investors.

http://www.telegraph.co.uk/money/main.jhtm...ccusdebt116.xml

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Mentioned here on HPC

Very worrying.

The Russians don't appear to get it, what we have is MAD of financial world, bringing down the US would cripple Russia.

It's all catch 22.

Surely it can only be a matter of time before the US has to default.

What I want to know is why US credit hasn't been cut of sooner. The dollar is effectively worthless.

http://www.moneyweek.com/file/50572/the-ro...y-gold-now.html

And that's where the problem lies. As Winston Churchill put it: "All previous attempts to base money solely on intangibles such as credit or government edict or fiat have ended in inflationary panic and disaster."

Sound familiar? The greatest credit expansion in history was only made possible under this post-1971 system of currency by government decree. But now it's unravelling. Fears over Fannie and Freddie and the integrity of the US banking system are pushing the dollar – the world's reserve currency - down to record lows against the euro (it's even fallen against the pound, which shows just how bad the market fears things could get).

Investors are losing faith in the most important form of paper money in the world. What will take its place? One thing's for sure – even if we don't return to a commodity-backed currency, for as long as the financial turmoil continues, gold, the oldest and most consistent money in history, is likely to be a benefactor. If you don't own any. I suggest you get down to your local coin shop and buy some.

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After having read the article I feel scared for the first time about the potential extent of this crisis. :o

This isn't now just about the Fed propping up Wall st, the $ creditors are paying the price for their "loose" policy. Admittedly they (the creditors) have done rather well over the last few years because of that policy but now they have BIG, BIG decisions to make.

Will it end with the $ having its reserve status removed ... who knows.

One thing is for sure though, if one of them (the creditors) starts to offload its $ holdings it will start a stampede.

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This isn't now just about the Fed propping up Wall st, the $ creditors are paying the price for their "loose" policy. Admittedly they (the creditors) have done rather well over the last few years because of that policy but now they have BIG, BIG decisions to make.

Will it end with the $ having its reserve status removed ... who knows.

One thing is for sure though, if one of them (the creditors) starts to offload its $ holdings it will start a stampede.

So we have a game of bluff then? Will the first to get out get any value from selling the dollar? Or would that move trigger the collapse making it worthless?

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So we have a game of bluff then? Will the first to get out get any value from selling the dollar? Or would that move trigger the collapse making it worthless?

I think you are quite right in saying that it is a game of bluff.

To my mind the East, Russia OPEC ect must be weighing up the pros / cons of continuing to trade and hold anything associated with dollars. OPEC have made their stand, that's why oil is trading at $130 + at the moment (supply and demand issues aside) and everyone else suffers as a consequnce.

Meanwhile the arrogant West continues to try and patch up a fraudulent, broken system and convince the rest that all will soon be well .... IT WON'T BE.

Something is going to have to give sometime.

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  • 395 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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