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    How long until the dollar collapses?

    Can this perpetual money printing really keep going? I mean isn't it just a matter of time?


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    I think that Keynesian economics can mitigate sharp rise/fall cycles that naturally occur in capitalist societies at the cost of some efficiency. However propping up wall street by printing tons of money is not Keynesian economics, it is giving the very wealthy more and more share of the wealth of others by eliminating their risk in investments at the cost of devaluing the currency.

    It will never be sustainable, eventually the rich will plague another country when they've sucked America dry. Sad as a Canadian, because it will eventually effect me greatly, to see the only presidential candidate(Paul) with real fiscal policy out of the running. Both Romney and Obama will just end up giving more money to the ultra rich under the guise of helping and gaining votes from constituents they don't really give a damn about.

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    Click here to enlarge Originally Posted by scott_uw Click here to enlarge
    It will never be sustainable, eventually the rich will plague another country when they've sucked America dry.
    I guess the real question is how long until America is sucked dry? What is left?

    The banks robbed everyone, they are printing money like it's a game, what else is there to take?

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    Click here to enlarge Originally Posted by Sticky Click here to enlarge
    I guess the real question is how long until America is sucked dry? What is left?

    The banks robbed everyone, they are printing money like it's a game, what else is there to take?
    As long as the world keeps buying US bonds and the fed keeps printing money to offset risk the game is still on. If the USD gained a viable currency competitor and the world stopped holding USD reserves, there would be a crash but I don't think its likely to happen in the near future, maybe a few decades from now. Maybe China could start running down their reserves but this would hurt their exports and might lead to a poor economy/civil instability.

    My guess is as good as joe the homeless plumber on the street corner would be.

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    Click here to enlarge Originally Posted by scott_uw Click here to enlarge
    As long as the world keeps buying US bonds and the fed keeps printing money to offset risk the game is still on. If
    I don't get why they keep buying US Bonds.

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    Click here to enlarge Originally Posted by Sticky Click here to enlarge
    I don't get why they keep buying US Bonds.
    Cause they are awesome!!

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    I dont give a $#@! what happens, I am enjoying my cheap chinese slave labor made products... God bless america.
    Some people live long, meaningful lives.

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    Click here to enlarge Originally Posted by DBFIU Click here to enlarge
    I dont give a $#@! what happens, I am enjoying my cheap chinese slave labor made products... God bless america.
    Your kids will care, if you have kids or plan to.
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    Click here to enlarge Originally Posted by EDM92 Click here to enlarge
    Your kids will care, if you have kids or plan to.
    I have kids, and they are currently enjoying chinese slave labor made elmo dolls.
    Some people live long, meaningful lives.

    Other people eat shit and die.

    I'm not racist, I hate everybody equally; especially fat people.


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    As an FX trader I can tell you the end is near.

    If you look at what Greece did to the EURO what do you think the reaction will be when the US goes the same way.
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    I will quit being rude if you quit being stupid.

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    If we defaulted, it would have been done. China is, IMO, poking the dragon with Japan and the islands. We have got to start paying our debt.

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    Can someone educate me on when/how/why we got indebted to china in the first place?

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    Lost Marine - Here are some interesting observations but remember books have been written on this so give a full explanation would require you to buy me (and others) several drinks to try to explain. Having said that, here are a couple of nuggets and these are just generalizations :

    1. Generally China and the Middle East saves (trade surplus) and invests in US debt. The US, well it just owes.
    2. Your biggest debtors are China and the Middle East (at least fair number of ME Countries) - Interestingly enough these are the two regions the general US population dislikes the most.
    3. When you had the Freddie Mac default and the US said it was going to write off the debt, China said if you do, we will stop buying your T-bills (and the lights get shut off) - this should tell you who is truly running America (and it is not the white house)
    4. The US cries foul over the low value of the Chinese Yuan but you have to remember, if the Yuan is ever allowed to float, the value of the Yuan will skyrocket which decreases the value of the loans China has to the US.
    5. The US is devaluing its currency just like China albeit for completely different reasons with QE1/QE2 and now QE3.
    6. Obama will get in and the world will suffer economic collapse in the next 4 years so spend your money as your savings will be worth squat.

    OK number 6 is my guess but I stand by it!
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    It all depends if US does not start a way with the Countries it owes money to that are planning to move to gold currency, Gaddafi was killed for that reason i wonder who is next on the kill list.

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    Click here to enlarge Originally Posted by ecampbell Click here to enlarge
    Lost Marine - Here are some interesting observations but remember books have been written on this so give a full explanation would require you to buy me (and others) several drinks to try to explain. Having said that, here are a couple of nuggets and these are just generalizations :

    1. Generally China and the Middle East saves (trade surplus) and invests in US debt. The US, well it just owes.
    2. Your biggest debtors are China and the Middle East (at least fair number of ME Countries) - Interestingly enough these are the two regions the general US population dislikes the most.
    3. When you had the Freddie Mac default and the US said it was going to write off the debt, China said if you do, we will stop buying your T-bills (and the lights get shut off) - this should tell you who is truly running America (and it is not the white house)
    4. The US cries foul over the low value of the Chinese Yuan but you have to remember, if the Yuan is ever allowed to float, the value of the Yuan will skyrocket which decreases the value of the loans China has to the US.
    5. The US is devaluing its currency just like China albeit for completely different reasons with QE1/QE2 and now QE3.
    6. Obama will get in and the world will suffer economic collapse in the next 4 years so spend your money as your savings will be worth squat.

    OK number 6 is my guess but I stand by it!

    Thanks

    could you elaborate #1 and 2 a bit more on how and it started. I may be in over my head alltogether but curious on how the whole thing works/ started

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    Click here to enlarge Originally Posted by LostMarine Click here to enlarge
    Thanks

    could you elaborate #1 and 2 a bit more on how and it started. I may be in over my head alltogether but curious on how the whole thing works/ started
    The way I understand it is the US Borrows money by selling treasury bonds. These are seen as safe. China has a ton of money so it buys them and this actually props up their currency as they hold a ton of these bonds in reserve.

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    Joe - BINGO.

    Marine - the bonds go up for auction on the open market and are bought at a discount. China for example, has excess funds and looks to invest in the t-bills (which are generally of a short term duration). These t-bills pay the day to day operating expenses for the fed government so if you can imagine, this is a very liquid market. When the t-bills mature, China would roll these t-bills over and are likely adding to the position at each auction. China has such a large position now that they could likely influence US Policy (as seen by the freddie mac example above). The amount of debt the Chinese government holds is the single biggest reason they do not want the yuan to appreciate...they would lose billions.
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    1 out of 1 members liked this post. Yes Reputation No
    Click here to enlarge Originally Posted by ecampbell Click here to enlarge
    Lost Marine - Here are some interesting observations but remember books have been written on this so give a full explanation would require you to buy me (and others) several drinks to try to explain. Having said that, here are a couple of nuggets and these are just generalizations :

    1. Generally China and the Middle East saves (trade surplus) and invests in US debt. The US, well it just owes.
    2. Your biggest debtors are China and the Middle East (at least fair number of ME Countries) - Interestingly enough these are the two regions the general US population dislikes the most.
    3. When you had the Freddie Mac default and the US said it was going to write off the debt, China said if you do, we will stop buying your T-bills (and the lights get shut off) - this should tell you who is truly running America (and it is not the white house)
    4. The US cries foul over the low value of the Chinese Yuan but you have to remember, if the Yuan is ever allowed to float, the value of the Yuan will skyrocket which decreases the value of the loans China has to the US.
    5. The US is devaluing its currency just like China albeit for completely different reasons with QE1/QE2 and now QE3.
    6. Obama will get in and the world will suffer economic collapse in the next 4 years so spend your money as your savings will be worth squat.

    OK number 6 is my guess but I stand by it!

    thanks for the explanation, can you get a little more in detail? I would really like to learn more about this.
    Some people live long, meaningful lives.

    Other people eat shit and die.

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    I think the world has changed so much that the stuff learnt in my first year of university has to be taken with a grain of salt. As in the video, China, the US, and now the EU are trying to influence the markets and to be honest, in my dumb and uninformed opinion, it will not work (and is not working).

    Into the vino quite hard right now so round two of class will be tomorrow after my hangover has gone away.
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    In the short term China buying up US debt has the effect of keeping the dollar high relative to the Yuan resulting in keeping the price of imports from then to us low. Thus the charge from our government of currency manipulator. Short term it is an effective way to develop home industry and drive employment rates up. China has a lot of mouths to feed and they don't want to piss people there off. As an investment thesis it is not a good move because the returns on our debt is low, so its like a government subsidy. Longer term, once China has generated enough internal demand to support economic growth at whatever levels they are targeting, the money going into our debt will most likely be spent at home. At that point the dollar will probably collapse and no longer be the worlds reserve currency. Right now central banks across the world are manipulating currencies through interest rates, QE's and stimulus such that the outcomes are unknown. If China decided today to start dumping our debt (redeeming notes and bonds) we would be fcuked!

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    Click here to enlarge Originally Posted by ecampbell Click here to enlarge
    the bonds go up for auction on the open market and are bought at a discount
    Info is always appreciated.

    This what im getting at though, when and why would the government offer bonds, especially to foreign entities? where was the begining of all this and reasoning behind it?

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    Great explanations. Thank you gents!
    John 3:16


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    Click here to enlarge Originally Posted by yage202 Click here to enlarge
    Thus the charge from our government of currency manipulator.
    Kind of a hypocritical thing to say when the US is trying to offset debt but intentionally devaluing the currency pissing off the entire world essentially.

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    Click here to enlarge Originally Posted by LostMarine Click here to enlarge
    This what im getting at though, when and why would the government offer bonds, especially to foreign entities? where was the begining of all this and reasoning behind it?
    It's simple, they need money because we can't support our huge budget. So they borrow, and historically the US was the safest and best bet for anyone in the world looking to invest.

    Foreign money has always flowed to the US, the government will sell to anyone who can buy they don't care. If they cared, they would fix the root of the problem.

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    when, and who decided to start though? Im probably better off googling it though

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