Friday, May 22, 2009

US, UK, and Japan will go down together

The Fiat Currencies Death March

Today, we are witness to a most absurd spectacle: Bankrupt nations with collapsing and contracting economies planning to re-spend themselves back into prosperity on borrowed money—at least, that’s the plan. The US, England, Japan and others are trapped in a sinkhole of defaulting debt and deflating demand, the combination of which broke global economies in the 1930s and is in the process of doing so again today. It is ironic and appropriate that England, the US, and Japan are following the same path at the same time; for the three together comprise the historical lineage of credit and power in this epoch, credit which built and whose consequent debt is now about to destroy all three.

Posted by sold 2 rent 1 @ 09:37 AM (1741 views)
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28 thoughts on “US, UK, and Japan will go down together

  • sold 2 rent 1 says:

    There has been some good debate on hyperinflation recently.

    Printing money to support the debt bubble and speculators shorting currencies on a massive scale seem to be the common pattern with the Zimbabwe and Weimar Republic hyperinflation.

    If the UK was alone in this mess then we could have Zimbabwe style hyperinflation on our hands.

    But we are not alone and most of the West is in a similar position so there could be a “safety in numbers” factor to play out here.

    IMHO the currency speculators wont be able to devalue the West’s currencies by one trillionth like in the Weimar (1914-1923) but we could be looking at 80pc to 95pc loss of purchasing power (compared to gold) which should push gold up to between $5,000 and $20,000 sometime next March/April 2010

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  • The Japanese housewifes are waiting with there fingers on the trigger for whichever currency gives them a better return than the tight banks.

    Swissy, Aussie, Loonie, Gold and oil, we will have to wait and see. Dramatic times ahead me thinks. Inflation will take no prisoners.

    America to lead the way is my opinion followed closely by Japan and a Sterling collapse to wake up BOE to increase rates. IMHO

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  • sold 2 rent 1 says:

    Was listening to R4 this morning and the historian said there was a strong resonance on the fury over the MP expenses with the Peasants’ Revolt in 1381. I almost put the car in the ditch on the way back from nursery,

    Looks like R4 is at the leading edge of consciousness

    As for Calleman’s model 1381 maps to 31 March 2010 – very close to Armstrong’s peak destruction date of 16 April 2010

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  • I get the feeling that the cold light of day is dawning and people are waking up to the fact that we are in one hell of a mess!

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  • sold 2 rent 1 says:

    Off topic but hey,

    “The UK government has established a secretive new police unit a la George Orwell with the powers to detain anyone for any length of time without any due process. The shadowy unit called the Fixated Threat Assessment Centre (FTAC) was covertly established in 2006. The unit includes the services of police psychiatrists. Why? For one very good reason, and one reason only: psychiatrists operate above the law. They can detain ANYONE AT ANY TIME AND FOR NO MORE REASON THAN THEIR STATED OPINION THAT THE PERSON MAY BE A DANGER TO THEMSELVES OR TO OTHERS”

    http://www.thetruthseeker.co.uk/article.asp?ID=10750

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  • 2.2 million un-employed in this country out of a population of around 60 million. That’s about 3.66 people un-employed per 100.
    Hardly devastating, and history shows that we have always had un-employment, even during the boom times. If you are un-fortunate enough to loose your job, there are vacancies around for those that choose to work. THIS IS NOT THE END OF THE WORLD. For a great majority in the UK no hardship will be felt. So for a year or two some won’t have a holiday or buy a newer car, and some may have to find new work, change perhaps for us all, but not the end.

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  • @ 7 will

    Research from Datamonitor suggests that those “systematically denied credit by mainstream lenders” will increase from 7 million to 8.6 million by 2011, which equates to one in four of the working population in the UK.

    Which means the working population is about 30-32 million.

    Take into account disability allowances and the way Labour have fiddled the job stats by shifting people from Job Seekers Allowance to other benefits, you should be looking at a more realistic 8-9% unemployed. Not far from the UB40 song 1 in 10.

    Then take into account that in 2006, 20 million are aged over 50 and by 2026 half of the UK population will be over 50, you can see and understand why we have a flood of refugees, of course they are welcome, we are an ageing population that is not creating enough children (workforce).

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  • happy mondays says:

    @ 7 – change perhaps for us all, but not the end. Maybe a new beginning! Out of destruction comes creation! RHCP for all you muso’s out there…

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  • mountain goat says:

    Clearly written Market Oracle article but I don’t agree with “To stimulate deflating economies, so much fiat money is being printed that money will eventually become worthless.” The money is not being printed. Those notes that you can hold and fold are not being printed. Instead central banks are creating trillion numbers on a screen created in exchange for IOU’s, toxic mortgages, corporate and government debts during QE. When/if the crunch comes it will be electronic numbers and the IOU’s that will be worthless first, including the electronic numbers in people’s bank accounts perhaps (that money is not sitting there in the bank vault anyway instead it has been lent out 20x leveraged to buy over-priced housing). Physical paper money notes, Federal Reserve Notes and T-bills stand with the backing of the US and UK government will retain their value longer. When it is convenient the electronic numbers and IOUs can simply be deleted because they are worthless anyway.

    The author quotes the monetary scientist Antal Fekete but probably needs to study him a bit more for example Can We Have Inflation And Deflation at the Same Time?

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  • 8. debtfree said…Then take into account that in 2006, 20 million are aged over 50 and by 2026 half of the UK population will be over 50, you can see and understand why we have a flood of refugees, of course they are welcome, we are an ageing population that is not creating enough children (workforce).

    And to prop up the housing bubble by feeding BTLers with rental income whilst suppressing wage inflation but allowing property inflation. Nasty, and the main point that it was left uncontrolled.

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  • happy mondays says:

    @ s2r1 – They can detain ANYONE AT ANY TIME AND FOR NO MORE REASON THAN THEIR STATED OPINION THAT THE PERSON MAY BE A DANGER TO THEMSELVES OR TO OTHERS”
    A bit of self interest / preservation here s2r1, anyone who thinks outside the box and upsets the status quo! There will be many detainees, maybe we should invest in holding pens / detainee camps etc..

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  • sold 2 rent 1 says:

    happy mondays,

    It makes me think that the whole MP expenses fury has been orchestrated on purpose so the main parties get battered in the Euro/local elections. BNP gets a surge in popularity and we get loads of demonstrators clashing with each other.

    R4 this morning gave the impression that MPs were told to treat the expenses system as part of their salary. Looks like the MPs have been set up for this.

    Let’s face it The Telegraph is a NWO propaganda machine like every other MSM outlet.

    You do have to admire the NWO sophistication in orchestrating events here.
    Is that a black helicopter flying overhead?

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  • matt_the_hat says:

    7. will – the hidden statistic is the ones with public sector non-jobs

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  • The bankers’ game of debt-based capital masquerading as money in order to indebt and profit from the productivity of others is now in its final stage.

    I am sorry I am a little dumb. Does this mean that banks have created money out of thin air and people worked all their lifes to pay back their mortgages?

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  • sold 2 rent 1 says:

    mander,

    “I am sorry I am a little dumb. Does this mean that banks have created money out of thin air and people worked all their lifes to pay back their mortgages?”

    Yep. Capitalism as a system has a flaw; far from being free, it enslaves the masses into their own debt. The game is now up.

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  • stillthinking says:

    Come on, it doesn’t enslave the masses at all. Credit creation allows people without capital to bootstrap economic activity, and savings being equal to debt is kind of what we want isn’t? Unless you want to abolish savings. On a gold structure there is no bootstrap capability for those without -existing- gold holdings, so their wages collapse against gold hoarders and onto massive income equality.
    Our problems are due to an unwarranted expense of credit, and banking fraud, not the idea of credit, and certainly not because of capitalism(creative destruction/Darwin). As we will all soon be very aware when we start paying socialised <- (oh look) banking losses.

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  • stillthinking says:

    I mean “expanse of credit”.

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  • 15

    When they create/print the fiat money supply for debt (like now), they don’t create the interest on top. It’s an ongoing circle of destruction and inflation, caused by the bodies entrusted to control inflation. Thanks Merv!

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  • sold 2 rent 1 says:

    stillthinking,

    A gold standard comes with its own set of problems I agree.
    A gold standard will not be the final solution but merely a stepping stone in the evolutionary system

    You should look at history with this evolutionary lens too.

    The debt-based monetary system was a fantastic way of financing the new world as Europeans expanded across the globe. It works best when populations are growing fast as the perpetual growth of debt is absorbed by the exponentially growing populations.

    However as populations have flattened out or even fallen the flaw of perpetual growth is clearly exposed. This is one of the reasons why the West is experiencing the flaw first and the East (still with fast growing populations) is not so affected yet.

    No monetary system is perfect but the debt-based one (where wealth is always distributed to the elite) has more problems than benefits.

    Time for change.

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  • The bailouts are to pay off past debts in other words, because the old money supply has ran out.

    So it goes on constantly threatening ones standard of living.

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  • st & s2r1

    I don’t understand why one thinks capitalism cannot work in a gold standard world ?? Creation of “money” supply as we’ve seen in the recent credit debacle through fractional reserve banking will not work, but why does this mean capitalism will not work ?

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  • sold 2 rent 1 says:

    bigguy2,

    Capitalism’s flaw is it requires perpetual expansion. Exponential growth of sales, profits, populations, the economy etc
    With finite natural resources and land, poplulations levelling off; we need to move to a ZERO GROWTH PARADIGM

    Watch Chris Martenson’s The Crash Course

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  • The issue isn’t finite resources, it is that money, when printed, gives entrepreneurs a signal that the economy has more resources than it has infact, so, during the boom, they invest in too many, and the wrong type of business venture, only to discover at the bust stage, that many must default on debt and go bankrupt (or be bailed out with tax payers money).

    So, we don’t need zero growth, we need a true free market, with true free market signals, to provide a match between capital and available resources.

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  • will @ 7,

    You’re right, it’s not the end of the world.

    However that’s like waking up in hospital after a nasty car crash and the surgeon says: “We’ve had to amputate both your legs and you’ll be in a wheelchair for the rest of your life. Don’t worry though, people in wheelchairs can still live fulfilling lives, it’s not the end of the world.”

    If Britain becomes a poorer country, it means fewer holidays in Turkey and more holidays in Torquay. It means the price of everything will be higher – from steak to washing machines to petrol. Vegetarian eco-hippies can have perfectly fulfilling lives, but I think most of us would prefer some red meat, clean clothes, and personal mobility.

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  • bah close that tag 666

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  • re: Will @7

    It matters who of the population are unemployed: is it people who can move back in with mum and dad?
    Is it people with no support structure underneath them?
    On the theme of house prices, are they people with mortgages who can no longer pay?

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