Doomsday Scenario for U.S. Economy?

[CPA2]

**Bernanke Hallucinating **by Martin D. Weiss, Ph.D.

If Fed Chairman Ben Bernanke honestly believes what he said at Jackson Hole on Friday — that he can save the economy by printing more money and buying more bonds — he’s hallucinating.

Through the first quarter of this year, he printed $1.5 trillion of paper money and promptly bought $1.5 trillion in mortgage bonds, government agency bonds, and Treasury bonds.

But the entire effort was a dismal failure; the U.S. economy is still sinking and most large American banks are still weak.

The underlying reason: While the government has been borrowing massively, nearly everyone else has embarked on unprecedented debt LIQUIDATIONS.

And remember: We’re not just talking about a slowdown in the pace of new borrowing — the pattern we used to see in typical recessions of the past. No! These are actual net reductions in debts outstanding — the basic stuff that depressions are made of.

In sum, nearly all the money Bernanke has printed — plus all the money he has supposedly poured into the economy — is going nowhere, except perhaps down the drain. He’s clearly running on a treadmill … pushing on a string.

Whatever you do, do not underestimate the potential impact of this situation. It is …

Huge! Including both the government and private sectors, the total new credit created in 2007 was $4.5 trillion. Now, it’s running at an annual pace of about ZERO! That $4.5 trillion was LOT of money — and it’s all money that’s NOT pouring into the economy any more.

**Unprecedented! This has never happened before in modern times — not even during the deepest recession of the postwar era. During the Great Depression? Yes. But in proportion to GDP, the debt buildup before the Depression — as well as the debt liquidations during the Depression — were not as large as they are now. **

Getting worse! Despite everything Bernanke has done to try to stop it, the debt liquidations are accelerating — especially in the mortgage area. Consider these basic facts:

**The Unavoidable Consequences **

**These forces are more enduring than any monetary policy, bigger than any government. They are unmistakable, unavoidable, and overwhelming. **
Bernanke can try to make believe they don’t exist. But you cannot afford to take that risk. You must recognize the truth and consequences that he’s not talking about …

Consequence #1. Bernanke’s nearly powerless. No matter how many more bonds he buys, Bernanke cannot save the recovery. Sure, he could push 30-year fixed mortgage rates down some more. But even the lowest mortgage rates in recorded history haven’t made a bit of difference. In fact, despite low rates, mortgages are being liquidated at an even FASTER clip. Home sales falling even MORE rapidly.

Consequence #2. Double dip. The double-dip recession we’ve been warning you about is now on its way. Meanwhile, administration economists still swear on a stack of Bibles that the double dip is not in the cards; and private economists think the probability of a double dip is only 20 to 30 percent. They must be getting their hallucinogens from the same source as Bernanke.

Consequence #3. More bank failures! As a whole, despite government bailouts and regulatory reform, the nation’s banks and thrifts are no healthier today than they were before the onset of the debt crisis. The big difference: This time the government is unlikely to have nearly as much political or financial capital to bail them out.

What To Do

First, reduce your risk exposure. Sell any stock or investment that may be vulnerable to a double-dip recession and all its probable consequences.

Second, hedge. If you are unable or unwilling to sell, buy some protection. The most convenient vehicle: Inverse ETFs — exchange traded funds that are designed to rise in value as markets decline.

Third, get your money to safety. Despite the near-zero yields, short-term U.S. Treasury bills or Treasury-only money market funds are still the safest parking place.

Fourth, check your bank. Click this link to **review our list of the Weakest Banks and Thrifts in the U.S. **

This list includes only institutions with a Weiss Rating of D+ (weak) or lower — institutions we believe to be vulnerable to future financial difficulties or even failure. To be sure, many vulnerable institutions will NOT ultimately fail. However, we believe that their risk of failure is high.

For your convenience, we’ve listed them by state, then in alphabetical order. Plus, with each institution, we provide not only the company name, but also their state of domicile and their total assets.

So … is your bank on our Weakest list? Or not?

If your bank is NOT on Weakest list, it’s because it has received a rating of AT LEAST C- (fair). Now, C is not a good rating. But it means that we believe your bank is stable and not currently vulnerable.

Do not believe Bernanke! Given all the facts he has at his fingertips — the same ones I’ve just presented here this morning — I doubt he even believes himself.

Martin

 

[CPA2]

Another desirable property of money is that money should be a store of value. Gold is not necessarily a store of value. The price goes down and the price goes up. If you would have bought gold in 1980 and held on till 2000, you would lost 2/3s of your value. You would have been much better off with the fiat dollar.

Gold went from $500 a troy ounce to $800 a troy ounce in a matter of days in January of 1980. That was clearly a speculative blow off.

I know of some people who got burned very badly by buying gold at $600 to $700 a troy ounce in the late 1970s. They bought gold only because it was going up in price! They understood nothing about the role that gold plays in the world’s fiat money system. Gold then went into a 25 year bear market because of President Regan and Fed Chairman Volker’s efforts to fight inflation.

A low price for gold is a good thing because it means that the financial markets are stable and most of your investments are going up in price. A high price for gold, like today, means that the financial markets are very unstable and most of your investments are going down in value.

We are at the end of a monetary era, and like a roll of toilet paper, things move faster towards the end. The government’s fianancial problems did not go away with President Carter. Those problems just morphed into the larger problems that we see today. The drug addict (government) just needs more drugs (debt) today than it did in the 1970s. We are watching this government falter under an overdose of drugs (debt).

 

[CPA2]

This further identifies why gold is so valuable, people need money to have complex and fair exchanges, thus the medium of exchange, aka money! Since they need money to maintain any kind of civilized economy, money is in demand. Now since it is in demand we need a good one, thus bringing us to gold. : D

Thank you : )

You hit the nail on the head!!!

 

[CPA2]

As Ridgerunner has said, one of the real limitations of gold as money is that for small transactions it is not divisible. There are about 31 grams of gold in a troy ounce, at $1200 an ounce, if I could break the coin into 1 gram pieces that would make them worth about $38 each. Not very useful when buying your morning cup of coffee.

I still sell my honey for $1 per pound just like I did in 1963. However, I only accept $1 in 1963 money, U.S. coins (90% silver). If people want to pay me in goverment paper money, the price is $10 a pound today and going higher every year. If the dollar craters, I will NOTaccept government money, but I will always accept U.S. coin silver and the price will always be $1.

 

[Ridgerunner]

I agree with you that investing in gold is very speculative and somewhat risky, you are basically betting that the fed will print and so your taking a little insurance out.
I do however, strongly disagree that a fiat money system is no more or less moral then a free market money system.

There is no reason to believe that there is not enough gold in the world to support the world because even if gold is currently lacking in supply for the whole world, the prices on gold as money would be high enough where mining gold would make economical sense. They would mine until the cost of mining equaled the cost of the gold, thus providing enough gold for the world (how its worked for thousands of years).
Even if there somehow was not enough gold in the world the market would determine a new less scarce money.(One that you couldn’t inflate at the whim of a politician)

I do not feel I have to explain why fiat money is immoral anymore then what I have below because any Catholic should be able to identify war and government welfare created by the fed by inflating money away from the people as immoral. If you have a specific point as to why market money is more moral then fiat money or vice versa, I will be happy to refute.

I did not say one kind of money is inherently more or less moral than another. However, it may be observed that very few people have any gold, whereas almost everybody has some dollars. If the value of the dollar decreased by, say, half this year, people would lose their backsides if they have dollars. Probably those holding gold would gain. Therefore, a very few would gain and almost everyone would lose, drastically. If dollars became absolutely worthless and gold was equivalent to $5,000 (which CPA2 has predicted), the fact that almost nobody has any gold would make it fairly unlikely that the world would suddenly find itself on a gold standard. More likely, there would be some kind of currency reform. And, it’s almost certain governments would do that before fiat money became completely worthless. If, however, it did not, and fiat money became utterly worthless, a lot more than the financial system would collapse, and we would, indeed, find outselves buying meat and flour with .22 and 9mm shells.

Now, if people lost faith in fiat money so completely that they demanded some kind of metallic value standing behind it, it could be silver or copper just as easily as it could be gold. It could be a “basket” of things. Would people accept that? Yes, because they would have to accept it. Remember the IRS? If taxes had to be paid in “new” dollars, everybody who earns anything will have to accept “New Reformed Dollars” in order to pay their taxes with them.

But I will also guess that if governments suddenly decided that currency had to be backed by gold, governments would also (as happened in the 1930s) demand to purchase all gold and would make it a crime to be holding anything beyond some minimal amount of it. And the government, not the gold owner, would determine the price, just as it did in the 1930s. Government could do that, even with a “basket” of metallic “backing”, or even with “New Reformed Dollars”.

And, by the way, gold is still in the $1200-1300 range, just as it has been all year. The world is obviously not buying the notion of gold soon reaching $5,000 or even $2000. At $2,000 it still would only be at its 1970s high, adjusted for inflation.

AND CPA2 SHOULD FEEL A MORAL OBLIGATION TO WARN PEOPLE THAT GOLD IS A SPECULATIVE INVESTMENT, AND THAT PEOPLE SHOULD NOT “BET THE RENT” ON IT OR ANY OTHER INVESTMENT. LIKE ANY INVESTMENT, GOLD COULD GO UP, BUT IT COULD ALSO GO DOWN.

 

[CPA2]

I did not say one kind of money is inherently more or less moral than another. However, it may be observed that very few people have any gold, whereas almost everybody has some dollars. If the value of the dollar decreased by, say, half this year, people would lose their backsides if they have dollars. Probably those holding gold would gain. Therefore, a very few would gain and almost everyone would lose, drastically. If dollars became absolutely worthless and gold was equivalent to $5,000 (which CPA2 has predicted), the fact that almost nobody has any gold would make it fairly unlikely that the world would suddenly find itself on a gold standard. More likely, there would be some kind of currency reform. And, it’s almost certain governments would do that before fiat money became completely worthless. If, however, it did not, and fiat money became utterly worthless, a lot more than the financial system would collapse, and we would, indeed, find outselves buying meat and flour with .22 and 9mm shells.

Now, if people lost faith in fiat money so completely that they demanded some kind of metallic value standing behind it, it could be silver or copper just as easily as it could be gold. It could be a “basket” of things. Would people accept that? Yes, because they would have to accept it. Remember the IRS? If taxes had to be paid in “new” dollars, everybody who earns anything will have to accept “New Reformed Dollars” in order to pay their taxes with them.

But I will also guess that if governments suddenly decided that currency had to be backed by gold, governments would also (as happened in the 1930s) demand to purchase all gold and would make it a crime to be holding anything beyond some minimal amount of it. And the government, not the gold owner, would determine the price, just as it did in the 1930s. Government could do that, even with a “basket” of metallic “backing”, or even with “New Reformed Dollars”.

And, by the way, gold is still in the $1200-1300 range, just as it has been all year. The world is obviously not buying the notion of gold soon reaching $5,000 or even $2000. At $2,000 it still would only be at its 1970s high, adjusted for inflation.

AND CPA2 SHOULD FEEL A MORAL OBLIGATION TO WARN PEOPLE THAT GOLD IS A SPECULATIVE INVESTMENT, AND THAT PEOPLE SHOULD NOT “BET THE RENT” ON IT OR ANY OTHER INVESTMENT. LIKE ANY INVESTMENT, GOLD COULD GO UP, BUT IT COULD ALSO GO DOWN.

$800 gold in January 1980, adjusted for inflation, would be about $2,300 in today’s inflated dollars.

The United States no longer has the financial clout like it did in 1933 to raise the price of Gold unilaterally. However, the G20 countries could very well raise the price of gold to $5,000, or even a higher price, to inflate away some of the world’s debt.

Perhaps I would think of gold as a speculative investment if the dollar were a stable currency, backed by gold. It is not. However, I do think of the dollar as a speculative investment that is only backed by the promises of politicians. Therefore, I am warning everyone about the government’s funny money, the dollar. Gold, even paper gold and gold mining stocks, is insurance against governments and their unstable funny money.

 

[Ridgerunner]

$800 gold in January 1980, adjusted for inflation, would be about $2,300 in today’s inflated dollars.

The United States no longer has the financial clout like it did in 1933 to raise the price of Gold unilaterally. However, the G20 countries could very well raise the price of gold to $5,000, or even a higher price, to inflate away some of the world’s debt.

Perhaps I would think of gold as a speculative investment if the dollar were a stable currency, backed by gold. It is not. However, I do think of the dollar as a speculative investment that is only backed by the promises of politicians. Therefore, I am warning everyone about the government’s funny money, the dollar. Gold, even paper gold and gold mining stocks, is insurance against governments and their unstable funny money.

So, gold is a long way from where it was in 1980. Not surprised to hear it. Speculation is always risky. Governments can make gold go down just like they can make other commodities go down. This government has done it before, and it worked. I am pretty confident it will do it again long before it ever reaches $5,000.00.

You need to be giving people a due warning about speculating on here while you’re touting gold. You really should.

 

[CPA2]

So, gold is a long way from where it was in 1980. Not surprised to hear it. Speculation is always risky. Governments can make gold go down just like they can make other commodities go down. This government has done it before, and it worked. I am pretty confident it will do it again long before it ever reaches $5,000.00.

You need to be giving people a due warning about speculating on here while you’re touting gold. You really should.

My message is that holding cash is the most risky investment, not gold! I think that my moral obligation lies with warning people about the demise of the dollar. I would be happy to change my tune if the FED and the socialists in power would change their tune. That is not going to happen.

When you hold cash you are speculating on the price of the dollar. It should be obvious that the government wants to drive the price of the dollar down. That means that the purchasing power of your cash will also go down. That is theft on a grand scale!

Yes, gold has to double in price if it is going to reach $800 an ounce in 1980 dollars. That should mean that the price of gold in nominal dollars is still very low.

Yes, the government has been making war on gold since 1970. However, now there is a debt crisis in Europe and the United States. The governments of the world now want to raise the price of gold, just as FDR did in 1933.

Remember, governments are fighting deflation, not inflation. There is no limit to the number of dollars that the Fed will create. More dollars means that every dollar that you own will buy less.

You can bet on the future purchasing power of the dollar. I will bet on the future purchasing power of gold. History is on the side of gold, not a currency that is not backed by anything of value, unless you count the promises of politicians as valuable.

What this socialist government in Washington is doing is insane. They are destroying the dollar and the United States in the process.

 

[Ridgerunner]

My message is that holding cash is the most risky investment, not gold! I would be happy to change my tune if the FED and the socialists in power would change their tune. That is not going to happen.

When you hold cash you are speculating on the price of the dollar. It should be obvious that the government wants to drive the price of the dollar down. That means that the purchasing power of your cash will also go down. That is theft on a grand scale!

Yes, gold has to double in price if it is going to reach $800 an ounce in 1980 dollars. That should mean that the price of gold in nominal dollars is still very low.

Yes, the government has been making war on gold since 1970. However, now there is a debt crisis in Europe and the United States. The governments of the world now want to raise the price of gold, just as FDR did in 1933.

Remember, governments are fighting deflation, not inflation. There is no limit to the number of dollars that the Fed will create. More dollars means that every dollar that you own will buy less.

You can bet on the future purchasing power of the dollar. I will bet on the future purchasing power of gold. History is on the side of gold, not a currency that is not backed by anything of value, unless you count the promises of politicians as valuable.

What this socialist government in Washington is doing is insane. They are destroying the dollar and the United States in the process.

I don’t “bet” on the purchasing power of anything. I do invest in some things, based on the likelihood of their productivity of things people want and need. Certainly, in this economy, I keep more cash available than normally, because the economy could take a downturn without a whole lot of trouble. Probably I should be putting it in the market instead, but I’m not.

I’m not unlike a lot of people. I don’t “bet the rent”. The question, though, is what all is part of “the rent”. When people consider whether to keep cash or invest, they need to consider all potential demands on their cash. That includes debt payments, living expenses, potential breakdowns of things like vehicles. That also includes slowdowns at work or loss of their jobs. Unless one feels reasonably secure about his/her cash levels versus the “rent”, he/she should not speculate in the stock market, in bonds, in gold or (like some of us) cattle, or anything else.

You should be telling people who read your posts that gold is not a sure thing; that it can, and has, gone down, and that they should not invest in anything they can’t afford to lose money on; gold or anything else.

 

[CPA2]

I don’t “bet” on the purchasing power of anything. I do invest in some things, based on the likelihood of their productivity of things people want and need. Certainly, in this economy, I keep more cash available than normally, because the economy could take a downturn without a whole lot of trouble. Probably I should be putting it in the market instead, but I’m not.

I’m not unlike a lot of people. I don’t “bet the rent”. The question, though, is what all is part of “the rent”. When people consider whether to keep cash or invest, they need to consider all potential demands on their cash. That includes debt payments, living expenses, potential breakdowns of things like vehicles. That also includes slowdowns at work or loss of their jobs. Unless one feels reasonably secure about his/her cash levels versus the “rent”, he/she should not speculate in the stock market, in bonds, in gold or (like some of us) cattle, or anything else.

You should be telling people who read your posts that gold is not a sure thing; that it can, and has, gone down, and that they should not invest in anything they can’t afford to lose money on; gold or anything else.

With the economy sliding and Big Ben Bernanke revving up the printing presses and the Fed’s helicopters to drop trillions of paper dollars on everything, it’s absolutely imperative that you understand what’s going on — so you can protect your money and profit.

 

[Ridgerunner]

With the economy sliding and Big Ben Bernanke revving up the printing presses and the Fed’s helicopters to drop trillions of paper dollars on everything, it’s absolutely imperative that you understand what’s going on — so you can protect your money and profit.

As soon as I see the helicopters overhead, and see the $100 bills fluttering out, I’ll go out and pick up enough of them to pay off my debts.

 

[stinkcat_14]

As soon as I see the helicopters overhead, and see the $100 bills fluttering out, I’ll go out and pick up enough of them to pay off my debts.

Just watch out for the huge vacuum cleaner they use to reduce the money supply.

 

[CPA2]

As soon as I see the helicopters overhead, and see the $100 bills fluttering out, I’ll go out and pick up enough of them to pay off my debts.

That is the government line. However, the rest of the world is not amused. The dollar will lose its status as the reserve currency of the world. We will no longer be able to pay for oil, etc. with newly created dollars. We will have to sell hard assets, like gold, to buy an international currency for international transactions.

 

[TenBobNote]

I did not say one kind of money is inherently more or less moral than another. However, it may be observed that very few people have any gold, whereas almost everybody has some dollars. If the value of the dollar decreased by, say, half this year, people would lose their backsides if they have dollars. Probably those holding gold would gain. Therefore, a very few would gain and almost everyone would lose, drastically. If dollars became absolutely worthless and gold was equivalent to $5,000 (which CPA2 has predicted), the fact that almost nobody has any gold would make it fairly unlikely that the world would suddenly find itself on a gold standard. More likely, there would be some kind of currency reform. And, it’s almost certain governments would do that before fiat money became completely worthless. If, however, it did not, and fiat money became utterly worthless, a lot more than the financial system would collapse, and we would, indeed, find outselves buying meat and flour with .22 and 9mm shells.

Now, if people lost faith in fiat money so completely that they demanded some kind of metallic value standing behind it, it could be silver or copper just as easily as it could be gold. It could be a “basket” of things. Would people accept that? Yes, because they would have to accept it. Remember the IRS? If taxes had to be paid in “new” dollars, everybody who earns anything will have to accept “New Reformed Dollars” in order to pay their taxes with them.

But I will also guess that if governments suddenly decided that currency had to be backed by gold, governments would also (as happened in the 1930s) demand to purchase all gold and would make it a crime to be holding anything beyond some minimal amount of it. And the government, not the gold owner, would determine the price, just as it did in the 1930s. Government could do that, even with a “basket” of metallic “backing”, or even with “New Reformed Dollars”.

And, by the way, gold is still in the $1200-1300 range, just as it has been all year. The world is obviously not buying the notion of gold soon reaching $5,000 or even $2000. At $2,000 it still would only be at its 1970s high, adjusted for inflation.

AND CPA2 SHOULD FEEL A MORAL OBLIGATION TO WARN PEOPLE THAT GOLD IS A SPECULATIVE INVESTMENT, AND THAT PEOPLE SHOULD NOT “BET THE RENT” ON IT OR ANY OTHER INVESTMENT. LIKE ANY INVESTMENT, GOLD COULD GO UP, BUT IT COULD ALSO GO DOWN.

I don’t see you arguing the points on how a fiat money system is evil just why the transition is bad, is that correct?
I don’t really look at it in the short term like that because the corrected monetary system would be so much better then a fiat system. The transition may be rough but our current situation is so dysfunctional that it will be continuously rough indefinitely if something does not change. The heroin addict has to get clean sometime.

I do not believe it would have to be very rough though because the government could simply legalize competition and the system would correct itself. Over time people would demand a sounder money and would refuse to take federal reserve notes because of inflation.
How could one argue for a government monopoly on money? That does not make sense to me.

 

[Ridgerunner]

Just watch out for the huge vacuum cleaner they use to reduce the money supply.

Oh, I think that’s a distinct possibility, all right. Probability, actually. Saw them do it in the early 1908s. And it certainly worked, too. I just don’t think this government is ready to do that. But I would say it’s just a matter of time. That’s one of the reasons businesses won’t borrow, notwithstanding that the banks are begging them to borrow. When it happens, interest rates skyrocket. When the money supply contracts in the future, and someday it will, lots of commodities, including gold, will drop like they were pushed off a cliff.

 

[Ridgerunner]

I don’t see you arguing the points on how a fiat money system is evil just why the transition is bad, is that correct?
I don’t really look at it in the short term like that because the corrected monetary system would be so much better then a fiat system. The transition may be rough but our current situation is so dysfunctional that it will be continuously rough indefinitely if something does not change. The heroin addict has to get clean sometime.

I do not believe it would have to be very rough though because the government could simply legalize competition and the system would correct itself. Over time people would demand a sounder money and would refuse to take federal reserve notes because of inflation.
How could one argue for a government monopoly on money? That does not make sense to me.

Renaissance bankers and early American bankers notwithstanding, governments always have a monopoly on money. They have it because they can criminalize or simply confiscate alternatives.

FDR’s relatively gentle confiscation of gold in the 1930s was largely successful. He set the price and people only had so long to bring it in and sell it to the government. If you didn’t, it was a criminal offense. Now, I’m sure there were people who cheated. After all, the government didn’t know how much gold any individual had. But people who had it were faced with a dilemma. They really couldn’t produce it to do anything with it after it became illegal. So, it sat in peoples’ safes, or behind their walls for decades. There’s probably more hidden gold in old houses and yards in the U.S. than anybody would imagine. I, myself, found some hidden gold in an old house once, quite by accident. It wasn’t much, but it had clearly been hidden. It was inside a wall, plastered over. The likely owners were long dead and gone, and obviously had not thought that they might require quick access to it. So, it was worthless to them all the time they had it.

Be assured the government will confiscate gold long before it gets to $5,000. That’s what all that hullaballoo was about people being required to give 1099s to gold dealers. It wasn’t to make sure the dealers weren’t cheating on their taxes. It was to identify people who had the gold. Does anybody really think the government won’t confiscate gold if dollars become worthless and anything remotely resembling a “gold currency” independent of the government seems likely? And does anybody really think the government can’t get access to the records of dealers in gold?

 

[CPA2]

Renaissance bankers and early American bankers notwithstanding, governments always have a monopoly on money. They have it because they can criminalize or simply confiscate alternatives.

FDR’s relatively gentle confiscation of gold in the 1930s was largely successful. He set the price and people only had so long to bring it in and sell it to the government. If you didn’t, it was a criminal offense. Now, I’m sure there were people who cheated. After all, the government didn’t know how much gold any individual had. But people who had it were faced with a dilemma. They really couldn’t produce it to do anything with it after it became illegal. So, it sat in peoples’ safes, or behind their walls for decades. There’s probably more hidden gold in old houses and yards in the U.S. than anybody would imagine. I, myself, found some hidden gold in an old house once, quite by accident. It wasn’t much, but it had clearly been hidden. It was inside a wall, plastered over. The likely owners were long dead and gone, and obviously had not thought that they might require quick access to it. So, it was worthless to them all the time they had it.

Be assured the government will confiscate gold long before it gets to $5,000. That’s what all that hullaballoo was about people being required to give 1099s to gold dealers. It wasn’t to make sure the dealers weren’t cheating on their taxes. It was to identify people who had the gold. Does anybody really think the government won’t confiscate gold if dollars become worthless and anything remotely resembling a “gold currency” independent of the government seems likely? And does anybody really think the government can’t get access to the records of dealers in gold?

Socialist governments have made war on God, guns and gold because God, guns and gold threaten the power of governments. Mao confiscated gold in China; however, the current Communist Chinese government is encouraging its citizens to buy gold. Therefore, I do not think that the G20 nations will confiscate gold.

These G20 countries need gold to go a lot higher. At some point the G20 nations will come out with a new international reserve currency and they may artifically raise the price of gold because gold could be a part of the new international reserve currency.

A friend just e-mailed me this:

In Gen 47:13-20 we see a progression. First the people spent all their money (apparently in the first two years) and their money failed. During the second two years they sold all their cattle and animals in exchange for food. Finally they sold their lands and bodies to Pharaoh in order to keep eating.

 

[CPA2]

AN END TO THE EURO?

The euro lost nearly 20 percent of its value against the dollar from November 2009 to June of this year. All the while, China’s currency was pegged to the dollar. That means European consumers lost significant buying power against not only the dollar, but also against the yuan!

And with the structural problems surrounding the euro, it will likely resume its steep decline and may even result in a break-up of the monetary union — an end to the euro.

 

[MikeSar]

Unemployment: 16.5 percent!
Total jobs lost: 16.6 million!
GDP implosion: -11.1 percent

Imagine this scenario: Official unemployment at 16.5 percent …
total jobs lost of 16.6 million — double the amount so far … and an
implosion in the entire U.S. economy bringing a whopping 11.1 percent
decline in GDP — four times worse than last year’s contraction.
And bear in mind that scenario assumes no major Wall Street meltdown.
Throw in a renewed banking panic or credit market collapse
… and it gets far, far worse!

If that sounds like doomsday science fiction, I have news for you: It’s actually
the scenario painted by two prominent economists who are among the closest to the
Obama administration — Mark Zandi, Chief Economist at Moody’s Analytics, and
Alan Blinder, former Vice Chairman of the Federal Reserve.
Their agenda was to defend Obama’s and the Federal Reserve’s aggressive interventions
in the economy — to show how bad things would have been in the past if
they had NOT come to the rescue with massive government bailouts, stimulus, and
money printing.​

Mike Larson

It is worse than that!
Psychologists say that if you change nothing but expect improvements, you’re crazy!

The key elements are salaries, prices and taxes and there is nothing to change their relation. Yes, we borrow money and give it to bankers, governement workers, the unemployed, etc. Yes, many have food because of that.
But 6 million unemployed for over six months cannot find jobs and 1.4 Million have been unemployed for over 99 weeks!
New plots in the internet show that this Recession is the worst since WWII. You can find these data “Percent Job Losses in Post WWII Recessions”
It shows that our “Recovery” improved jobs by less than 10% but it is going down.
The San Francisco Federal Reserve Baml warned of another “Dip” in 2011 AND 2012.
Something has to change to make our products competitive. A recent electronic gizmo sold over a million in the first few weeks: IT IS MADE IN CHINA.

Local store sells a canned good for over $1.5 but another store sells the Chinese version for $1.35! What does that tell you? They can ship a can 6,000 miles and sell it for less than our own. The store may have noticed, it now sells a similar product for $1 but the label does not identify its origin, only the distributor. Which would you buy?

The Recession will end when our products sell at world-competitive prices.

Politicians cannot deal with collective bargaining, they worry about get elected. Nobody will do nothing until enough workers are willing to take low salaries, perhaps next year.

 

[ralfyman]

Most money is actually created by commercial banks as they extend loans. Governments “print” money to cover the loans.

The problem for the U.S. is that it is deep in debt, is heavily reliant on consumer spending, and can only continue borrowing and spending heavily as long as the global economy continues to use the dollar.

Unfortunately, China, Russia, and other countries are slowly using other currencies for trade, especially for oil.