Sunday, November 9, 2008

Credit crunch? Meet the Nation Crunch.

The strange case of falling international reserves

If the Reserves are no longer growing but diminishing, this might indicate that the exporting countries are no longer buying and accumulating more US, British and European debt. If they are not accumulating more foreign currency bonds and debt, then the fiscal deficits of the US, the Brits and the European Union countries are no longer being funded – especially important to the US, which is running an immense fiscal deficit, what with the US Treasury going into debt like a drunken sailor on account of the need to bail-out all and sundry debtors. What do they do when this occurs? The only thing they can, buy their own treasury bonds, monetize the debt, causing huge inflation in an economic death throw.

Posted by planning4acrash @ 12:27 AM (889 views)
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6 thoughts on “Credit crunch? Meet the Nation Crunch.

  • planning4acrash says:

    Here, we see the impact of the Bretton Wood’s agreement. This is what led to the booming money supply, and, for those who don’t believe there’s enough gold, we only have to go back to 1970 to get back to gold. That is a short time in economics, and we are talking about a collapse in the funny money in derivatives. I went to the British Museum and saw the money secion, you know what? Gold are the only coins all the way through. You see all of them. Right up to beautiful British Sovereigns. You know what? Decimalisation went hand in hand with Bretton Woods. The imperial measure was relative to weights of gold, pounds and ounces, so decimalisation was a statement really of a break from gold to fiat. The Euro dimension is because the Euro was the plan all along. BTW, sorry webmaster about the image size, but, it is kinda important, so hopefully it stays.

    Anybody got an idea of what happens when this thing falls of a cliff and how long they can keep it up?

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  • Just playing devil’s advocate for a moment, I notice that the graph was also flat for a short period around 1997-1998 which probably indicates the LTCM collapse and the east asian crisis. The graph’s time axis is heavily stretched at the end, so the current flatness is probably no longer than the 1998 flatness. Given that the world didn’t end back then, it may not end now either.

    (As I said, just playing devil’s advocate. I still believe we’re all firmly going to hell in a handcart…)

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  • @drewster

    It’s not the only flat point, there are also hiatus points around the 1980 recession and around 1991 as well.

    the interesting bit though is the exponential increases at certain points notably post 2003 as securitsation kicked in and banks started printing their own money. It’s hard to see where that spike goes.

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  • gardeniadotnet says:

    Great find p4ac.

    “I’ll leave you with this question: what is the significance of the drastic change in the growth-trend of International Reserves, from explosive growth, to the sudden beginning of a contraction?

    I hope others, more competent than myself, address this question. I believe it is quite important that we have an authoritative answer to it.”

    The question has assuredly been answered already by the World’s cognoscenti. How long before we become privy to the details?

    Is this what s2r1 would descibe as ‘staring into the abyss’?

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  • planning4acrash says:

    For the answer, and we are dealing with globalists here, look what the IMF did to Argentina and how it reacted. It nationalised all private pensions. This is inevitable. The state will devour the people and have a tantrum long before it puts down its toys.

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