Well, you're right on that.

But, suckers pay twice. Because, we do not want to part with our purchasing power immediately, we will part with twice more purchasing power over the long haul.

And besides, let's just have fun and bankrupt the kids. They will still think we love them.

So you think that American companies should be held accountable for their risky deals, but Foreign Banks shouldn't?

A little hypocritical there aren't you.

No one twisted their arms to make them buy the mortgages. No one twisted their arms to make them make bad decisions.
Did they??

You know,
About a year ago, last March or so, there was a bill before congress which would have saved homeowners experiencing foreclosures. This is after all the bases for the Banks failing anyway, and would have saved us a lot of money if done at the time. Probably would have stopped this whole mess we see now.

But the Republicans in Congress refused to vote for the bill and Bush threatened to veto it if they did.

Then of course we had to listen as the Architect of the whole deregulation of the home loan business told us to quit whining. He said, it was a mental recession and that our economy was sound.

This man is Republican Phil Gramm, and would have been the Sec of Treasury if we had been stupid enough to elect McCain. Another Republican.

Now we have to listen as the 28% of the country, who still supported Bush and the Republican Party, all of a sudden think they are economic Geniuses.

Wow aren't we honored here at Mingle to have the advice and intelligence of all this Genius right here in our midst.

I was under impression that I have made my own preference to be perfectly clear. In third paragraph.

Sorry!

I screwed up....

No problem. I have done the same few times.

We won't have to worry at all because the next generations will pay for it long after we're dead and gone!!!

Nogame wrote:


I do appreciate your attempt but it does not bring any clarity to my question. Of course that's probably my fault as I have not properly stated it, I'm sure.

All these billions of dollars are not "Made". There is no actual currency to account for it. There are debt securities assigned to the government by the Fed. The Fed then makes a bookkeeping transaction. The part of the transaction that is "simulus" is offset by a bookkeeping transaction at the 'National Banks' level. After the accounting trans actions are complete, the Fed has actually deposited the loaned amount from the Fed to the designated banks at the National level. The National banks can then "loan" funds to the other banks, businesses.. etc. That is the "stimulu" or the "infusion" - actually there is no cash at all, only a whole lot of creative accounting.

Money is actually a debt instrument, the value of all our current, actual, cash is determined by the amount of 'debt' of our Federal Government.

So some of what you have said, Nogame, about the decreasing value of the dollar, is correct but not for the reasons you have stated.

My question in the OP was basically referring to the dollar as a debt instrument. I will attempt to refrase it here:

Money loaned to the Federal Government comes from the Federal Reserve Bank (where they get it or what backs it is not my question). My question is how much can we possibly borrow before our dollar (the debt instrument we exchange for the purchase goods)is of negative value? Or maybe the better question would be, how much debt can the U.S. incurr before our dollar is so devalued in the world market that we become a third world country?

I lived in Japan when the Yen was 381 to ONE American Dollar. Imagine that scenario reversed, who would be the leading power in the world then?

You should not focus on how exactly they create the debt. Why?

Because, that whole mechanism is designed for one purpose, and one purpose only: to create an appearance, that we actually borrow the money from somewhere. It is but a misdirection.

I have stated this example somewhere else on forum, but I don't remember where and so let me repeat myself: Imagine you have stolen a car. Now, you don't want everybody to think of where your new fortune came from, and so, you keep telling everybody about the car payments you are making. That makes everyone think that you are paying for it, and so the car is financed. In fact, you could even create a fictitious loan company and print up some invoices you could show to your neighbors.

This whole "offsetting debt" business is just that. So, don't even consider it in your thinking.

Next, there is no difference between cash and a number in a bank account. Why?

Because both compete equally for all existing wealth.

Next, the negative value. It is already a negative. All debt, credit, and such, is a negative. Our whole economy is based on negative system, and this is why to get ahead, it doesn't pay to earn and save (this will be inflated away from you) as it would in a positive system of hard money, but instead, it makes a lot of sense to borrow and spend. This will be inflated away meaning that the more you borrow, the less you will have to pay back.

The devaluation question. Our dollar is already devalued about 20 times from what it was, since we started the check-kitting between the congress and the FED. It can be devalued further, as long as our debt is a reserve debt of the world, and as long as we can keep forcing others to sell their product for it. It will no longer be valued and we will immediately become a TWC, as soon as others grow smart of our con game.


China.

As America goes so does the world.
When our economy falters, the rest of the world sees a ten-fold decline in their economies.

If our economy fails, it will take the rest of the world 200 years to recover.
If they ever do.

The people are the real assets. Each individual - doesn't have to be in USA, or even more, most likely NOT from USA- are essentially the real assets of the banks.
Basically you are a slave to the banks if you owe money, if you don't perhaps your child-grandchild etc..

It's a long term investment.
Why do you think Iraq was attacked? They just added a bunch of future assets to their safes.
So yeah, unemployment is bad for you and for the banks, because you are not borrowing and they can't charge you the interest.

This is just how the world works..I wish it wouldn't be.
Don't blame the banks tough..blame the whole idea of "money".

"How much wood would a woodchuck chuck
if a woodchuck could chuck wood?"

Why start on 2001? We've been overspending for over a century now. No president since JFK has made any attempt to pay off our debt.

Anyhow, we can't pay off this debt because it would leave is broke. Stimulus packages are merely big numbers meant to add to the debt to keep us going. This only helps because we have a "fractional reserve system" that allows banks to loan out a much bigger number than they have in reserve.

Another drain on our economy is with every dollar printed, we have inflation which is a tax in itself.

If we abolished the federal reserve, and the government started printing all it's own money to take the place of our taxes we would have inflation. This is a tax on every income level. So this act would be counter productive.

And, as far as i know there is no limit to how much money they can print. Another reason to abolish it because for every dollar they print, we all have to pay back with interest. Sounds stupid doesn't it?

I am all about abolishing the Federal Reserve, and our fractional reserve system, so we can pay off our debt. The interest on our debt is where most of our tax money goes supposedly. Get rid of it, then you can get rid of our income tax. This, along with at least most of the IRS. Then you can start eliminating departments that are counterproductive... But that's for the long run...

Can anyone say World Bank?


Didn't one of your Bush government's senior big knobs have a position of like CEO on the World Bank hierarchy?

Ah, yes. Our connection to the "World Bank", if i'm not mistaken can be traced back to WWII (roughly).

Bush, no. Unfortunately since the sheep didn't start paying attention until the Bush administration started overstepping the lines, they believe that Bush started our connection to these things. No, you can trace administrative involvement right back to it's origin in the 19 40's.

Just like the U.N., the world court, etc.

basically one can take on as much debt as they can reasonably pay the interest on...

so take our tax revenue, subtract the fixed costs, and the remainder can be used to service debt. since the US economy has no lifespan and debts are passed on to successive generations then the principal payments can be stretched out ad infinitem.

eventually though the debt if it continues to grow exceeds what is reasonable to pay back under any realistic scenario and then there is default, economic collapse, credit freeze, and currency devaluation against other world currencies.

how much debt can be tolerated depends on the overall health of the economy, tax revenues and of course the willingness of lenders. but countries (iceland) do go bankrupt...

Nogames


Yes, I agree. And the rest of the post this quote came from helped me to understand what you were saying before,thanks.


Atlantis75


Enlighten me, please – future assets? I understand the part about borrowing, and more, now, about our ‘debt’ system, but I’m still missing some puzzle parts in the mix of it all.


Jess:


Bernecke – and it was planned for some time. The idea was that he would ‘infiltrate’ the inner workings of the Central World Bank and institute policy and procedures, within that structure, that would mirror those of our Federal Reserve bank. I so HATED that he made it into that position, as I think the world might if the U.S. totally crashes.

S1owhand

THANKS – that is an answer to my question and combined with what I’ve learned from everyone else here, I think I now have a better understanding. I was just reading about Iceland yesterday.

OK – so NOW two more questions – if you can all stand it.

1. In the representation that S1owhand gives, if there was total economic failure, and as others have equated, the entire world would suffer, then would those individuals (families) that, currently hold the greatest amount of the worlds wealth, also be in ruin?
2. If there were such a collapse in the U.S. and as others have equated, the entire world would suffer, then what value would ANY currency continue to hold, if any? Could the ‘American’ dollar become as useless as the civil war Confederate paper?

In other words would there ever be a time when money is so useless that barter is the only reliable and acceptable trade option?

I say throw out the Community Reinvestment Act that required banks to take more risks when loaning money...

Next, debt is the most confusing subject ican think of. If everyone had the money to pay off their loans right now and did it, our system would crash. How confusing is that? Literally 90% of the money in circulation is debt. Paying off our debts is, however, what we need to do.

But paying off our debts is an impossible act when the only source of money charges 3% interest. Unless, of course, we pay them back, PLUS give them our property that we originally owned. This means the end result, unless the federal reserve is completely bipassed, is owning less than our forefathers did when they started the country.

And for everyone's info Bernanke is in no way a part of our government. He is apart of the Federal Reserve Bank. That means Bush had nothing to do with him getting into that position.

Not defending Bush, but i honestly am getting the impression that the majority of people on this sight are blinded by hating Bush. There is reason to dislike him, but don't ignore Clinton Carter, Bush Sr., Nixon, etc. Hell even Obama's stimulus is deeply flawed.

We need to keep eachother as unbiased as possible.

Well, I would not say that the whole world is going to suffer, quite the opposite would happen in my opinion. I happen to agree with Peter Schiff on that the world would hickup and continue, way better than with us on their back.

Therefore, I can't really answer these questions.