The U.S. dollar will remain the world’s reserve currency because no other major currency offers such liquidity, depth of financial markets, and store of value.
Some years ago, I attended a small luncheon on the outlook for the U.S. dollar. Paul Volcker, the former Federal Reserve chairman, was the guest of honor. In response to a chorus of Cassandras who argued that the U.S. economy’s all too apparent weaknesses wouldlead to an inevitable dollar collapse, Volcker made a simple observation: For the dollar to depreciate, he said, it would necessarily have to depreciate against another currency. And in Volcker’s view, at that time, the U.S. economy was fundamentally no weaker than that of any competing countries.
Volcker’s logic would seem equally pertinent today in responding to the many critics who believe that the Federal Reserve’s unprecedented quantitative easing policy will lead to the dollar’s imminent demise as a reserve currency. If the dollar is to lose its reserve status, as epitomized by the fact that more than 60 percent of the world’s foreign exchange and more than 85 percent of world trade is still denominated in U.S. dollars, some other currency would need to replace it. A close examination of the world’s other major currencies reveals that a currency is yet to emerge that offers the liquidity, depth of financial markets, andstore of value that the U.S. dollar does.
To be sure, when viewed in isolation, there are many reasons not to be complacent about the U.S. dollar’s long-run future. After all, the U.S. economy is only now emerging from its worst economic and financial crisis since the 1930s. At the same time, itsdysfunctional political system is yet to come to grips with the country’s long-term budget issues, while the Federal Reserve has more than quadrupled the size of its balance sheet to its present level of around $4 trillion in an effort to get the U.S. economy moving again.
Vladimir Putin Speech at the Munich Press Conference in Germany! Notice that there are Certain countries that did not show this on the News? Also notice that there are certain countries that don’t want Putin to become the president again and that’s why are showing propaganda against Putin and Russia?
If your against the evil NWO then remember to support Putin regardless of skin color, nationality or religion! thanks!
RT Pepe Escobar presidential election Russia elections Putin 2012 Moscow Putin president 2012 russia vote purin russia election putin russia putin 2012 vladimir putin results Russians protests politics NATO West В.Путин.Выступление на Мюнхенской конференции
united states currency eye- IMG_7364_web (Photo credit: kevindean)
December 30, 2011 By Al Holtje
The outrage and contempt I have for the American political system is beyond comprehension. As Abraham Lincoln so eloquently phrased at Gettysburg it’s sad to say; “government for the people and by the people” has been betrayed. Today, the engine that energizes government is fired by corruption and power in the never ending battle for control of the nation’s checkbook. What is most disturbing to me is that the great majority of American’s sit back and buy into the right vs. left arguments ignoring the essential issue which is the plight of the ship of state. In truth, it’s rarely about “us” any more; it’s about them and their reach for power. Now as 2012 approaches, it won’t be long before the worn and torn American dollar becomes the catalyst that sinks the shaky boat that carries the world’s money supply. The system is overloaded and hopelessly corrupted under the weight of debt and computerized derivative contracts, a situation that is now out of control.
At the center of the next economic earthquake will be the unregulated and very profitable derivative contracts denominated in dollars. The first tremor occurred in 1998 when there were $50 trillion in contracts outstanding. Russia defaulted on its debt and that incident caused a magnitude 4economic earthquake. The Federal Reserve had to reduce interest rates four times to contain the damage. That was followed by the housing bubble in 2007 (magnitude 7). No one went to jail and now, as we move forward to 2012, derivative contracts are valued at $1.4 quadrillion equal to $206,000 for every man, woman and child on the planet. A sum so huge that it is equal to 100 times all the money on deposit in the nation’s banks. Not one penny of that amount went to creating jobs, assisted in the economic recovery or otherwise helped the millions of American’s in need. It’s just simple basic math and greed that is being ignored by the President, the Secretary of the Treasury, the Chairman of the Federal Reserve and both parties in Congress.
~This is very interesting and fits in with history as foretold by the ancients~jude
By David Knox Barker
Life without appreciation for irony in global financial, economic and political affairs would be challenging. God undoubtedly enjoys the irony at work in human action. Politicians promising government sponsored heaven on earth for decades have delivered the world into a global financial meltdown nightmare, and the cusp of another depression. All around the world, the politicians are scrambling for their political lives, and many their political souls, as the global system enters a long wave extinction event.
The final plunge of this long wave winter season is now underway. The international political economy, which has lost its moorings in individual accountability, responsibility and purpose, is breaking up. Socialism in all its forms, including the global banking system that is dependent on the government dole, is collapsing from the weight of its internal contradictions. Socialism is going through an extinction event in the final years of this long wave, receiving its just reward from the crushing long wave forces that it has magnified around the globe.
Catherine Austin Fitts, host of the Solari Report, responds to fears of economic collapse and describes some of the forces at work that continue to undermine the middle class, such as inflation, GAT, and the WTO. The Solari Report is a weekly live interactive briefing with commentary and guest experts that go behind the headlines to reveal what’s really happening in the global financial system…
In a great article published 28 March on why the European Union is doomed to collapse or total transformation – into what? - Charles Hugh Smith shows the explain-it-all chart, below. One important fact is this economic model is a convergent and globalized “no alternative”. Countries that don’t play this game are almost inexistent, for example the paranoid police state of North Korea.
The EU collapse-or-transform endgame of today only reflects the harsh realities of this one-only model and is only a subset of the bigger game: the globalized no alternative economy. This has its own subset components. First we have the 30-member OECD group of rich nations including the EU27 countries. These countries are furthest along the development path to the single goal of urban “postindustrial” economies and their consumer society.
Something is going on behind the scenes in the normally secretive back vaults of the Washington based funny farm called the “Federal Reserve”.
Thanks to the St. Louis Fed’s economic research unit, we have various data, graphs and information published from daily to monthly, depending upon the data being displayed. By perusing this data farm, one can get a fair (perhaps not good – but fair) idea of the actual actions of the Federal Reserve which, in all cases, is far better than relying on what the Federal Reserve Chairman says. The two rarely match.
Let’s take a look at the chart (BASE) of the base money supply in the USA, calculated bi-weekly, I believe. First we see what happened during the financial meltdown of 2008.
This chart – shaded to indicate all the action taking place during an “official” recession – shows the absolutely horrifying money pumping that flooded the banks with liquidity (i.e. bailout) to prevent the free market from punishing those TBTF banks for their admittedly criminal acts of fraud through the creation, sale and short sales of MBS, CDOs, and ABCs of all kinds and types.
The Federal Reserve just dumped money on the fire to put it out. Or delay it.
Britain’s coalition government pressed the reset button on the UK Economy during summer 2010, as it has continued to make a plethora of tax raising and spending cut economic austerity announcements over the past 9 months in an attempt to get a grip on the Labour government’s legacy of an out of control annual budget deficit of over £150 billion per year that risked bankrupting Britain.
These policies on face value imply severe economic distress for several years as they are implemented starting in 2011 and thus require the continuing lubricant of near zero interest rates backed up by quantitative easing aka money printing to inflate the economy (consumer and asset prices) in an attempt at offsetting public sector deflation so as to prevent a nominal double dip recession.
The big gamble that the coalition government is playing is that its programme for economic austerity will prevent market interest rates from rising as they have done so in the bankrupting PIIGS for the whole of 2010 and into 2011, pushing these economies into economic depression. The Coalition governments primary aim is to engineer an economic outcome that sets the scene for a spending and tax cutting induced mini boom into a May 2015 General Election that would favour at the very least a continuation of the Coalition government or more probably an outright conservative victory.
However the coalition government faces many headwinds during 2011 that could disrupt its economic plans, most notably soaring inflation that has long since left the UK official target of CPI 2% behind as well as internal political pressures as the Lib Dems buckle under austerity induced dissent , let alone external pressures form first the Euro-zone to more recently imploding Middle East states buckling under their own inflation mega-trends.
Therefore this analysis seeks to conclude in a trend forecast for UK Interest rates in determination of the degree to which the Coalition government will be able to manage to keep UK interest rates low (base and market) during 2011 to enable the target trends for the economy to be achieved.
Happy days are here again! Stock markets are strong, company profits are up, bankers are making record profits and bonuses, unemployment is declining, and inflation is non-existent. Obama and Bernanke are the dream team making the US into the Superpower it once was.
Yes, it is amazing the castles in the air that can be built with paper money and deceitful manipulation of all economic data. And Madame Bernanke de Pompadour will do anything to keep King Louis XV Obama happy, including flooding markets with unlimited amounts of printed money. They both know that, in their holy alliance, they are committing a cardinal sin. But clinging to power is more important than the good of the country. An economic and social disaster is imminent for the US and a major part of the world and Bernanke de Pompadour and Louis XV Obama are praying that it won’t happen during their reign: “Après nous le déluge”. (Warm thanks to my good friend the artist Leo Lein).
Moral and financial decadence
A deluge of an unprecedented magnitude is both inevitable and imminent. The consequences of the economic and political mismanagement will have a devastating impact on the world for a very long time. And the consequences will touch most corners of the world in so many different areas; economic, financial, social, political and geopolitical. The adjustment that the world will undergo in the next decade or longer, will be of such colossal magnitude that life will be very different for coming generations compared to the current social, financial and moral decadence. But history always gives us lessons and the one that is coming will be necessary and eventually good for the world. But the transition and adjustment will be extremely traumatic for most of us.