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How China Can Cause The Death Of The Dollar And The Entire U.S. Financial System

China vs. America - Photo by Wangdora92The death of the dollar is coming, and it will probably be China that pulls the trigger.  What you are about to read is understood by only a very small fraction of all Americans.  Right now, the U.S. dollar is the de facto reserve currency of the planet.  Most global trade is conducted in U.S. dollars, and almost all oil is sold for U.S. dollars.  More than 60 percent of all global foreign exchange reserves are held in U.S. dollars, and far more U.S. dollars are actually used outside of the United States than inside of it.  As will be described below, this has given the United States some tremendous economic advantages, and most Americans have no idea how much their current standard of living depends on the dollar remaining the reserve currency of the world.  Unfortunately, thanks to reckless money printing by the Federal Reserve and the reckless accumulation of debt by the federal government, the status of the dollar as the reserve currency of the world is now in great jeopardy.

As I mentioned above, nations all over the globe use U.S. dollars to trade with one another.  This has created tremendous demand for U.S. dollars and has kept the value of the dollar up.  It also means that Americans can import things that they need much more inexpensively than they otherwise would be able to.

The largest exporting nations such as Saudi Arabia (oil) and China (cheap plastic trinkets at Wal-Mart) end up with massive piles of U.S. dollars...

Are You Ready For The Death Of The Petrodollar - Photo By Revisorweb

Instead of just sitting on all of that cash, these exporting nations often reinvest much of that cash into low risk securities that can be rapidly turned back into dollars if necessary.  For a very long time, U.S. Treasury bonds have been considered to be the perfect way to do this.  This has created tremendous demand for U.S. government debt and has helped keep interest rates super low.  So every year, massive amounts of money that gets sent out of the country ends up being loaned back to the U.S. Treasury at super low interest rates...

United States Treasury Building - Photo by Rchuon24

And it has been a very good thing for the U.S. economy that the federal government has been able to borrow money so cheaply, because the interest rate on 10 year U.S. Treasuries affects thousands upon thousands of other interest rates throughout our financial system.  For example, as the rate on 10 year U.S. Treasuries has risen in recent months, so have the rates on U.S. home mortgages.

Our entire way of life in the United States depends upon this game continuing.  We must have the rest of the world use our currency and loan it back to us at ultra low interest rates.  At this point we have painted ourselves into a corner by accumulating so much debt.  We simply cannot afford to have rates rise significantly.

For example, if the average rate of interest on U.S. government debt rose to just 6 percent (and it has been much higher than that at various times in the past), we would be paying more than a trillion dollars a year just in interest on the national debt.

But it wouldn't be just the federal government that would suffer.  Just consider what higher rates would do to the real estate market.

About a year ago, the rate on 30 year mortgages was sitting at 3.31 percent.  The monthly payment on a 30 year, $300,000 mortgage at that rate is $1315.52.

If the 30 year rate rises to 8 percent, the monthly payment on a 30 year, $300,000 mortgage would be $2201.29.

Does 8 percent sound crazy to you?

It shouldn't.  8 percent was considered to be normal back in the year 2000.

Are you starting to get the picture?

We need other countries to use our dollars and buy our debt so that we can have super low interest rates and so that we can afford to buy lots of cheap stuff from them.

Unfortunately, the truly bizarre behavior of the Federal Reserve and the U.S. government over the past several years is causing the rest of the world to lose faith in our currency.  In particular, China is leading the call for a "de-Americanized" world.  The following is from a recent article posted on the website of France 24...

For decades the US has benefited to the tune of trillions of dollars-worth of free credit from the greenback's role as the default global reserve unit.

But as the global economy trembled before the prospect of a US default last month, only averted when Washington reached a deal to raise its debt ceiling, China's official Xinhua news agency called for a "de-Americanised" world.

It also urged the creation of a "new international reserve currency... to replace the dominant US dollar".

So why should the rest of the planet listen to China?

Well, China now accounts for more global trade than anyone else does, including the United States.

China is also now the number one importer of oil in the world.

At this point, China is even importing more oil from Saudi Arabia than the United States is.

China now has an enormous amount of economic power globally, and the Chinese want the rest of the planet to start using less U.S. dollars and to start using more of their own currency.  The following is from a recent article in the Vancouver Sun...

Three years after China allowed the yuan to start trading in Hong Kong’s offshore market, banks and investors around the world are positioning themselves to get involved in what Nomura Holdings Inc. calls the biggest revolution in the $5.3 trillion currency market since the creation of the euro in 1999.

And over the past few years we have seen the global use of the yuan rise dramatically...

International use of the yuan is increasing as the world’s second-largest economy opens up its capital markets. In the first nine months of this year, about 17 percent of China’s global trade was settled in the currency, compared with less than one percent in 2009, according to Deutsche Bank AG.

Of course the U.S. dollar is still king for now, but thanks to a whole host of recent international currency agreements this status is slipping.  For example, China just recently signed a major currency agreement with the European Central Bank...

The swap deal will allow more trade and investment between the regions to be conducted in euros and yuan, without having to convert into another currency such as the U.S. dollar first, said Kathleen Brooks, a research director at FOREX.com.

"It's a way of promoting European and Chinese trade, but not doing it with the U.S. dollar," said Brooks. "It's a bit like cutting out the middleman, all of a sudden there's potentially no U.S. dollar risk."

And as I have written about previously, we have seen a bunch of other similar agreements being signed all over the planet in recent years...

1. China and Germany (See Here)

2. China and Russia (See Here)

3. China and Brazil (See Here)

4. China and Australia (See Here)

5. China and Japan (See Here)

6. India and Japan (See Here)

7. Iran and Russia (See Here)

8. China and Chile (See Here)

9. China and the United Arab Emirates (See Here)

10. China, Brazil, Russia, India and South Africa (See Here)

But do you hear about any of this on the mainstream news?

Of course not.

They would rather focus on the latest celebrity scandal.

Right now, the global move away from the U.S. dollar is slow but steady.

At some point, some trigger event will likely cause it to become a stampede.

When that happens, demand for U.S. dollars and U.S. debt will disintegrate and interest rates will absolutely skyrocket.

And if interest rates skyrocket that will throw the entire U.S. financial system into chaos.  At the moment, there are about 441 trillion dollars worth of interest rate derivatives sitting out there.  It is a financial time bomb unlike anything the world has ever seen before.

There are four "too big to fail" banks in the United States that each have more than 40 trillion dollars worth of total exposure to derivatives.   The largest chunk of those derivatives is made up of interest rate derivatives.  In case you were wondering , those four banks are JPMorgan Chase, Citibank, Bank of America and Goldman Sachs.

A huge upward surge in interest rates would absolutely devastate those banks and cause a financial crisis that would make 2008 look like a Sunday picnic.

Right now, the leader in global trade seems content to use U.S. dollars for most of their international transactions.  China also seems content to hold more than a trillion dollars of U.S. government debt.

If that suddenly changes someday, the consequences for the U.S. economy will be absolutely catastrophic and every single American will feel the pain.

The standard of living that all of us are enjoying today depends largely upon China.  They can bring down the hammer at any moment and they know it.

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  • Tim

    “It also means that Americans can export things that they need much more inexpensively than they otherwise would be able to.”

    Did you mean to say that Americans can import things that they need?

    • MichaelfromTheEconomicCollapse

      Good catch.

      Michael

  • James

    Michael,

    Was wondering if you will talk about the fact that the GDP growth beat expectations. How have these numbers been manipulated?

    • make-it-stop

      Hasn’t the gov spent, or the debt went up, about 700B in the last month. Since gov. spending goes against GDP now days, there you go.

  • Trailer Park Investor

    HAMMER TIME
    Here it comes.
    Tick Tock, Tick Tock

  • Tim

    As I read the article, I wondered if The Economic Collapse Blog was accessible from within the nation of China. The reason is that the Chinese government has an internet censorship program called The Golden Shield Project, also known as the Great Firewall of China, which blocks access to many foreign websites.

    I found a really cool site where you can type in any web address to find out if that address is accessible from within China. I entered the address for this site, and the result said “ok” which means that the site should be accessible from within mainland China.

    • sen

      i am from china

      • sen

        this blog has been totally accessible from china since i started following it over a year ago

        • Tim

          Interesting. What do you think of this article?

          • sen

            it is great, very informative

          • sen

            but truth always hurts, most americans may have trouble accepting the painful truth.

          • paul

            most chinese probably do not realise how corrupt their system is and how much bad debt is sloshing around in their financial system not to mention the environmental catastrophe they’re going to be confronted by also being a net energy importer go figure

          • sen

            i don’t know a lot of details, the only things i know are that chinese economy has been striding forward for recent few decades disregard of the so-called ingrainedly corrupt system and unspeakably bad debt by a large proportion of american population and the life expectancy of chinese people has been steadily going up despite of the alleged environmental catastrophe and the ever increasing energy consumption of china just surpassed that of america not long ago and there is not a sight of the trend is about to end anytime soon in spite of the status of being a net energy importer

        • sen

          it is a good place to learn englsih.

        • MichaelfromTheEconomicCollapse

          I am very glad that people in China can check out my site. :)

          Michael

          • sen

            the internet is borderless.

        • squashpants

          Hi, Mr. Sen. Glad to know that some folks in China are able to see sites such as this. Speaking for myself, no ill feelings against the Chinese people. Personally, I hope for all peoples the freedom to have a good life.

  • no what i mean vern?

    I keep hearin’ this “end o’ times” stuff and every mornin’ i got to get up and go to the same ol’ sucky job listenin’ to folks bitc_ bout things. I say, “Bring it on, alreadee!!! Let’s let this sucka burn!!!

    • squashpants

      It is entirely possible that the collapse we expect won’t even happen, and for factors we really don’t understand at this point. I never would bet on this being a sure thing.

  • K

    Agreed it is not if, but when. And for folks who wish it would just happen. I do not think you understand, just how bad it will be.

    • FailGov.org

      Don’t be too rash too believe that those of us who want the collapse to happen do not understand how bad it will be. Though there are definitely those who underestimate how bad it will be, others of us feel the same sentiment as Thomas Paine when he said “If there must be trouble, let it be in my day, that my child may have peace.”

      • K

        In the time of Thomas Paine, there was no biological warfare. The puppet-masters have had a sample of the Spanish flu, since 2007. More than enough time to turn it into a weapon. It killed 5% of the world population last time. I am sure they have made major improvements on that. I am also sure, they have some very special flu shots for themselves. Most say the elite would not resort to such steps. Obviously, I believe they are capable of such acts.

        • Malcolm Reynolds

          “In the time of Thomas Paine, there was no biological warfare”
          WRONG. See the seige of Ft Pitt in 1763

        • MeMadMax

          Why would they bother destroying the US?
          If we are economically dead, we are militarily dead. Just a land mass full of spoiled little brats half a world away. Then at some point, we will get our act together and be a chinese customer again… It’s utterly stupid that the elite would want to physically destroy the US or the people in it. They are out to make money, and dead servants don’t make money….

          • K

            They are only killing people, they consider useless eaters. Between automation, and cheap workers from other countries.Why do they want us at all? People who believe in minimum wage, and at least some level of rights. No they prefer people who expect none of those things. People who will work for next to nothing. Doubt it. In such a down economy the immigration bill should not pass. It only further cuts the throats of current workers. You really think it will not pass? We will see soon enough.

          • MeMadMax

            Amnesty is DOA in the house. Won’t pass.

          • K

            i hope you are right.

          • MeMadMax

            Well, think about it, if it was possible, it would’ve happened a long time ago. In fact, since Obamacare/2010 there has been a dry spell of tyrannical, thousand page, laws that were passed. Why? GOP controls the house. Maintain that and, well, the end will be delayed for a little while anyways. >_>

          • Rochelle Renee

            True, but we still have to watch and stay on these sneaky bas*ards.

          • Hammerstrike

            They are the useless eaters and they rely on the otehr useless eaters to dominate the producers.

          • no what i mean vern?

            Granted, but the problem is they control the $$$$. They won’t be satisfied until all us useless eaters are scrounging like dogs at their tables for whatever scraps they care to throw our way.

          • Hammerstrike

            Thus, given the nature of their power, they know they are not producing/contributing to the host society.
            They know they are no Alphas and only way they don´t have the Alpha´s boot on their neck is keeping the lead, is going ever forward with the rule of idiocracy.

            What they fear is the producers, knowing that controlling money will only work for a limited time, hence “multiculturalism”, welfare and police state.

            The producers and the real elite have to be systematically undermined and destroyed for them to remain in charge but these also support the ineptocracy, without them the whole thing goes crashing down.

          • Robert Zraick

            They (the elite) don’t care about making money. They care about power.

            They want most of us to die so that those left, will be more easily manageable.

            They want to be sure they have water and air. They would rather we were dead.

            I do not think most people understand how truly evil they are.

          • MeMadMax

            I think you missed it.
            Why would they want the US destroyed?
            Besides, it would’ve happened by now…

          • Robert Zraick

            They don’t want their U.S. destroyed. They want your U.S. to be destroyed, and you to be either killed or enslaved.
            They don’t need the money. They want the power.

          • burtfisher

            You are correct, and may I add one word: now. They want power now, without regard to anyone’s future. They ‘live in the moment’ while they destroy our future and that of our kids. Didja’ notice how so many of these progressive know-it-alls don’t have kids? Or they delay their families. Or they adopt third-world (racially-determined) kids. Anything other than the traditional American life. Who says they know what is best for Americans?

          • Robert Zraick

            good points

          • Rob Kinney

            I truly believe what you just said; the elite don’t care one bit about the money because the people that they want dead and out of the way (mostly lower income and poor, “useless eaters,”) are only diverting their government handouts and even their wages from working right back up the line to the top. The elite hate for the poor to be able to get and spend welfare anyway, so I doubt they’d care much to lose those customers. Their taxes would go down as a result of the poor being eradicated and the welfare programs gone, so I’m almost certain they would rejoice. They would also be just fine with gettin rid of all the non-essential workforce, as it don’t really matter to them in the end; the checks and salary they pay the workers always comes right back around to them or their rich friends anyway. Whether it’s spent buying their over priced goods, or paying bloated costs for some kind of services they “own.” It would just save em the cost of printin the check and doin the payroll and they would again rejoice with less “useless breathers” takin up all their air and asserting themselves as “people too.”
            I bet they truly hate that phrase, when an eater says “I’m a person too,” I bet it makes them cringe and think, “f you, bow down to me and beg me to take pity on you, you filthy scum.”

            They really do see others as just taking up their oxygen and using up their resources, we are just specks of dirt that need to be cleaned up, and I really do not doubt the fact that they are planning how to best get away with mass genocide of the “have nots.”

          • Michael

            They don’t want the poor dead, they want the smart dead and seniors. They are pro “bring in the servants” and pro “get rid of intelligent opposition”

          • dan_2000

            China wants the US out of Asia, militarily and economically. They want full control of the region and will do what it takes to obtain that goal.

      • stew redmen

        Everyday that goes by more people wake up, so in this case, time is OUR friend, and our foe’s enemy

      • Hammerstrike

        Ands the current disaster is also brought about by Why can´t future
        generations pay for this?!?
        going on for a few generations.

      • Near Term Extinction Truther

        There is no peace to be had. We will deal with financial collapse as Fukushima does its untold and invisible damage. Then around 2030 (if not before), the world will cascade over the 450ppm CO2 climate cliff (even though the real and acknowledged cliff was 350). And through Peak Oil on that fire too. Rough times ahead, but no peace. Hopefully you were nice to your children, then perhaps they won’t kill you in your sleep for leaving them to suffer and die on a dying planet. The financial collapse is only the beginning of the death spiral.

    • energizedmortal

      We want peace. Prepare for war.

    • TooLittleTooLate

      I’m with you, K.

      I REALLY don’t want to see any of this happen, even though I know it must. I got back last night but, I was in the woods from Thurs till yesterday. It’s funny how much you take for granted everything in your life. Even if you work hard at your place and don’t rely as much as others do on things….. without gasoline and diesel you’re still SOL on a small farm.

  • Rodster

    Maybe i’m a pessimist or a realist. I am of the belief none of this will matter. When the US comes crashing down the whole effing thing will follow worldwide and the entire global financial system will collapse.

    China and every other Nation is doing the same thing. Recently China was warning about their inflated housing bubble where housing was far exceeding demand.

    Hopefully people will see that Central Banking is nothing more than a Ponzi scheme and we have crooks and thieves all around the world in charge of them.

    • Joel Peeters

      Hmmm, although I agree with you on the fact that the US will crash and send shock waves around the world, I’m, however, not so sure the whole financial system will collapse.

      Thinking about what all those powerful countries are doing with their “swap” agreement to stop using US Dollars for their common trading + the repatriation or mass buying of gold & silver (China, Germany, etc), I tend to think that they are already putting the “without US” system in place for months. The “debt ceiling show” just accelerate things for them to do so.

      For me, the remark of a Chinese Official like that is just a call signal for those behind the scene to move forward. I can not believe one second that those guys does not know what Michael is warning people about (they probably even know far more).

      Also, the big difference with the US and China or Europe, is that China and Europe are made up of big saving people, not really spending people, which give a huge leverage to those two blocks against the US. I don’t say I’m right far from it, just trying to look sideways on the global picture :-)

      Cheers

      • M W

        But all this is happening in the context of peak oil. Your analysis fails to account for the biggest hit the global economy is going to take…

        • niel solomon

          I concur once more sir, finally a man who sees whats underneath this game

      • Rodster

        What you are missing is that every industrialized economy in the WORLD is doing EXACTLY what the US is doing including China !

        Yesterday the ECB announced interest rate cuts to almost ZERO just like the Fed.

        China is propping up their economy as well with CHEAP money and they are creating a MASSIVE housing bubble because they are building just to build and to keep the 1.2 billion Chinese citizens from revolting.

        This whole Ponzi scheme will be exposed for what it truly is and will SHOW EVERY NATION WAS IN ON THE ACT…….not just the US.

        • Hammerstrike

          False, there is no Chinese housing bubble, bubbles doesn´t last that long.

          It is something much different than a housing bubble, since “ghost cities” are located in African countries too.

          Remember what the israelis are building in the West Bank.

          • niel solomon

            dude, wrong.. no bubble in housing, really, are you suggesting this is market normality and what lets watch real estate growth continue, Us jobs being created daily. nah im done here, your clearly right, tell yellen she can stop printing money all is healthy and well once more happy days

        • no what i mean vern?

          Quite likely correct.

        • niel solomon

          I concur

    • Syrin

      China as a nation will be dead in two generations. Their air, land and water are polluted beyond the point of recovery and are incompatible with life. I agree, when the US collapses, so does the whole world, but at least we have breathable air, farm-able land, and drinkable water. China does not.

      • Rodster

        That’s exactly why China and the rest of the world is frightened if the US economy were to collapse because it exposes Central Banking for the Ponzi scheme it truly is.

      • jsmith

        Ghastly isn’t it? Can you see 200 million Chinese moving to the United States, and 50 million of those coming to California where I live?

        • Hammerstrike

          Don´t worry, modern biological weapons works pretty fast.

        • no what i mean vern?

          They ain’t gonna wanna live in Californee. They don’t like radiation any more than we do.

          • TooLittleTooLate

            We may go broke but, we still have spent more than the rest of the world combined for our armed services and weapons. I doubt China or anyone else will be coming to take claim to the U.S. To think otherwise is just silly, IMHO.

          • niel solomon

            3 months without structure the usa would become a very different country,

      • Hammerstrike

        No hippies, please.

        Africa, that is where some of the “ghost-cities” are being built.
        But it will take some atomic arguments to convince NATO to let China take over africa.

      • AK

        That’s assuming we don’t have Fukushima blow up rendering large parts of the Northern Hemisphere including the U.S. uninhabitable. That to me is a far greater threat to our way of life than the inevitable destruction of the dollar.

        • Hammerstrike

          LOL at the blind radiation fear-mongering!

          Sorry but no, just no, the Fukushima plant isn´t the Doomsday Device in the Doctor Strangelove movie. It does not contain 1 million tonnes of plutonium.

          • no what i mean vern?

            umm…yeah….whatever…..doc refilled your scrip yet????

          • Hammerstrike

            When some s— pie go on about how Fukushima fallouts are going to the Pacific or western half of North America radioactive, even caus ethe extinction of humanity, I laugh!

            Srs, how can “people” be that f—-ing stupid??

          • Near Term Extinction Truther

            The lovely thing about low dose radiation is that it doesn’t tell you how or when it’s going to kill you, it just does.

            The amount of radiation released into the ocean just from March -July 2011 was 10,000 – 100,000 times higher (depending on the day) than the peak of atmospheric testing. That does not consider the plume that crossed the US, or the ongoing discharges into the ocean. Europe was kind enough to issue a fallout warning, the US? They just turned off RadNet so we couldn’t publicly see the numbers. But you can call people stupid if you want. Or you can read the FOIA documents and learn about bioaccumulation and biomagnification.

            Fun tidbit. 50-70% of the oxygen on earth comes from plankton in the ocean. (this is where the radiation councentrates, at the bottom of the food chain, 1,000x more than than the water surrounding it) Spend some time mulling what happens if the plankton dies? If the Pacific ocean dies. Because the 3 reactors that melted through are not salvagable. They will continue irradiating the ocean, and eventually (most likely) the aquifer that serves much of Japan. In which case, they’re even more SOL than they already are.

          • Hammerstrike

            10 000 to 100 000 times more than atmospheric testings? Really? Have Fukushima released 1 million tons of plutonium or so? Of course not.

            I don´t think “Conspiracy theories” are impossible, people are apathetic and irrational but humans can´t produce enough radioactive material to kill off Oceanic plankton.

            Virus or a planktons releasing Chlorine instead of Oxygen on the other hand…

          • niel solomon

            no, it changes a cell, the cell deforms, the resulting offspring, deformed, their offspring deformed, get the idea, cause and effect of the worst type, I sincerely hope im wrong for my kids at least but this whole thing is too quitetened compared to Chernobyl for me to be comforted its not worse than it actually is, peace + love

          • niel solomon

            because I am I guess, I do know when cherobyl went down it hit the news 6 WEEKS after the meltdown occurred
            one reactor, far smaller and simpler in design than the 3 reactors in japan, chernbyl expelled vast amounts and took 3 years to cap and cost the lives of 900000 post meltdown, I like you wish this were a speculative theory, unfortunately it is not and the true disaster of this has not yet occurred, at this time readings show cesium in the US west coast, Hawaii and in many ocean species, this will continue, what I really find quite astonishing is Chernobyl even now gets the odd feature on the media and did for 2 years following its start, where is the info on fukishima..given the severity they remain quiet…. my friend you have too much trust.

          • niel solomon

            fukushima, as with the Chernobyl meltdown affected thousands of miles of land and the effects are still showing in Russia, fukishima has 3 reactors in a meltdown state and untold amounts of water DAILY being used to control fission reaction thus avoiding an explosion of the 3 reactors ( now located somewhere in the soil beneath) This water is the problem, for 3 years plus its been trickling into the pacific in quantities unknown but one thing is for sure its more than they say it is and one day soon the effects will show and affect everyone, of this there are no doubts

      • no what i mean vern?

        Yeah, but how are they gonna handle the negro population once they git har?

        • Hammerstrike

          Day 1 riots.
          Day 7 riots, city blocks burning
          Day 10 Starvation, rioters grows tired
          Day 20 Problem solved.

  • Nic

    With fatca coming in 2 months, many non usa banks and foreign companies won’t accept your irs blackmail requesting 30 percent hold on any transaction. Chinese are already on tour around the world to promote their money. Banking system is at the root of the system. USA is finished!

  • markthetruth

    More and more I come to value charity and love of one’s fellow being above everything else… All our lauded technological progress–our very
    civilization–is like the axe in the hand of the pathological criminal.

    – Albert Einstein

    Cryptocurrency Bitcoins = New world Currency

    the end…

    • MeMadMax

      It fits part of the narrative(bitcoins), but it doesn’t work the way they want it to be, thats for sure.

    • squashpants

      Ya just gotta love Einstein. Too bad he couldn’t stomach Quantum Physics, though.

    • Hammerstrike

      And who today claims Charity and Love? What have these become excuse for?

      The pathological criminals giving the wealth of the intelligent and productive to the stupid and undeserving until there is wealth no more, until socitey itself is no longer sustainable.

      Yep, technological progress, that only doubled life expectancy and make people´s lives far better than during the middle ages or even the 19th Century.

      The wealth and technology of our civilization have already been wasted on human garbage, ungrateful human garbage.

  • Ralfine

    America is whining about the trade balance, but at the same times prohibits the export of high technology to China.

    So they develop their own and export it in competition to American companies.
    This way everybody is happy. Or not?

    • Rene Girrard

      Not true. Bill Clinton gave the Chinese all the high tech they wanted in exchange for campaign contributions.

  • heidi

    “Unfortunately, thanks to reckless money printing by the Federal Reserve
    and the reckless accumulation of debt by the federal government” while that is true, I think you should add the fact multinational corporations and billionaires are paying very little taxes and draining our country just as much.

    thanks for all the great articles
    ~Heidi

    • Ralfine

      Money printing isn’t the problem – if the money is used to pay for infrastructure investment. How else would the economy come to money, when only the state is alllowed to print money?

      The problem comes when that printed money is used for consumption, just like debt is now used for consumption and not for investment.

      As soon as you start taking consumer credits and payday loans, you are doomed.

      And all wars shall be paid for by taxing corporations. With the exception when foreign powers like Mexico, Cuba, Canada, Bahamas start attacking America.

      When the American Navy does not protect the shipping lines for American corporations, they might want to go back to producing in America.

      • jaxon64

        you make one excellent point–our money should be for production instead of the 70+% of it which is given away in social entitlement programs–ie: consumed.
        When trillions are given away annually with nothing productive to show for it and it actually de-incentivizes those receiving the freebies to become productive.
        That % of freebies is not even including the costs of SSI and Medicare/cade.

        • HadIt

          Well, I have been paying into SS and medicaid for the better part of my life. Unless you REFUND me that money, D@MN right I am “entitled” to it!

        • Hammerstrike

          Consumed I.E. wasted.

          Ineptocracy

          *_Ineptocracy_****(in-ep-toc’-ra-cy) – a system of government where the least
          capable to lead are elected by the least capable of producing, and where the
          members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers*

    • make-it-stop

      corporations pay NO taxes Heidi

    • TooLittleTooLate

      All the above it true.

      If you have money in the U.S…. you can buy influence.

      This country has changed. There was a time when kids weren’t glued to their cell phones and actually had real conversations with each other. There was a time when honesty and integrity stood for something. When a man could do business with a hand shake. There was a time when most families went to church. There was a time when people would not sue at the drop of a hat…. or over spilled coffee. There was a time when mass shootings were unheard of…. when I was a kid, I’d never heard of anyone leaving a child in a hot car.

      We’ve changed…. and even if we get through this financial crisis, this country will not get better until we get better.

  • hero

    This is not true….

    If you get news from Taiwan & Japan, you’ll know china is almost broke & the property bubble is about to blow up anytime. 2008 will look like a picnic when it happens.

    Trade picture is misleading because china trade is a lot about importing oil. It trades a lot because it has to earn money to buy imported crude.

    Criticisms welcomed.

    • Jimbo

      China has been running consistent annual trade surpluses since 1995. I don’t know where you get your information from, but you are very wrong.

    • davidmpark

      Agreed – been seeing that too. The only way for them to beat us is for us to beat ourselves for them.

  • Georgiaboy61

    The death of the U.S. dollar is probably not far off, but that is not necessarily a bad thing in the long run – although it will be extremely traumatic and very painful in the short run.
    The truth of the matter is that the USD has been a fiat currency for a very long time now – arguably since the creation of the Federal Reserve itself, and certainly since Nixon and Kissinger took us off the gold standard over forty years ago.
    History tells us that three, perhaps four, likely fates await nations and empires which amass debt too-great to be paid. They can monetize the debt, i.e. inflate the money supply; they can grow their way out of trouble and pay off their outstanding debt; or they can default – declare bankruptcy – and start over. Of these choices, declaring bankruptcy is the best and most-honest policy. However, it also requires the most humility and self-discipline – qualities for which our govt. is not known, to say the least!
    There is a fourth possible outcome: a major, perhaps even global, war which serves to reset everything back to equilibrium. WWII followed the Great Depression; does another world war await the world soon?

    • Gary Gibson

      Yes it does. Go read Isaiah 19. Substitute the word Egypt for America. We’re headed for an all encompasing bloody civil war, an extremely severe drought, dire economic times and then in our weakened state we will be invaded by the Russians, Chinese and others and that will be the start of the world war that will break up all nations…

    • Malcolm Reynolds

      Bankruptcy is not a choice. The 14th Amendment stands in the way.

      The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned

      • Georgiaboy61

        Re: “Bankruptcy is not a choice. The 14th Amendment stands in the way.”
        Since when has the constitution ever stood in the way of anything? We’re living in post-constitutional America now, are we not?

        • Malcolm Reynolds

          *sigh*, most definitely. I concede the point.

  • Nic

    “Once we begin using material products to define ourselves,
    we are doomed to be on an endless treadmill of dissatisfaction”.
    Erich Fromm – in his book “To Have or To Be”, 1979.

    • Hammerstrike

      Cultural marxist skumm who enjoyed well the comforts of the western civilization, while demanding that it be destroyed for his delluded utopia to work.

  • Richard

    “outside of the United States than inside of it.”
    How about, “outside the United States than inside it”?

    • Jimbo

      Do you live alone?

  • Richard

    That’s all very well, Michael, but you don’t say WHY interest rates should “soar”. The fact that the U.S. dollar may or may not be the world’s reserve currency in the future is not directly relevant to the future of interest rates. You have to explain WHY you think so. My contention is that people don’t have the buying power to push interest rates up – which is why interest rates are so low and why they will REMAIN low for the indefinite future. Read the writings of Lacy Hunt who has been 100% right on interest rates for over 25 years. He is looking for lower interest rates ahead. And by the way, America’s loss of reserve status for its currency is a very good thing for America, not a bad one. I have explained this before in your Comments section.

    • Tim

      You obviously don’t understand how it works. Higher demand for bonds leads to higher bond prices but lower yields (interest rates). Conversely, lower demand for bonds leads to lower bond prices but higher yields. So, if foreign demand for U.S. Treasuries stops, it will cause Treasury yields to increase significantly. Just this morning, the 10-year yield has risen sharply since yesterday.

      • Richard

        “You obviously don’t understand how it works”
        Of course not. Silly me. I apologize. I bow to your superior wisdom. Forget about Lacy Hunt. He’s just a cretin.

        • Jimbo

          Tim is 100% correct. That is one of the reasons that the Fed conducts QE. By buying treasury bonds it creates an artificial demand which pushes down yields. The Fed does not set market interest rates other than the minimum. Lenders will either lend at low rates or seek returns from higher yielding assets. If bond yields rise, investors will buy bonds rather than loan money out. This forces up market lending rates. Also, you are wrong about the Dollars reserve status.

        • Das

          Never trust a man named Lacy

  • Don_in_Odessa

    As long as the Central Banksters around the world are taking turns at the proverbial printing press and using their nice clean, crisp new bills to purchase their own and each other’s Government bonds this thing can go on for a very long time. The money never has to make it’s way into circulation and at some point they just forgive each other’s debt. And, some of their too big to fail criminal buddies as well.

    Cool Huh?….OK, who threw that tomato?

    • Nic

      Hitler went to war…. So we may have a war.

      • Don_in_Odessa

        You may be right, that is the historical modus operandi. Although, we have never had all the Central banks of the world cooperating with each other as we do now

        • TooLittleTooLate

          That is true too but, we have the reserve currency that we have to protect. We’ll come up with some reason to go to war again as our status begins to slip.

          Since we can’t grow our way out of this, we’ll kill everyone else down to our size….

          We spend more than the rest of the world combined on our military. If we can not do it by the rules, we’ll just have a temper tantrem and trash the game board.

    • niel solomon

      you forget sir… self interest and decades of history and thus distrust between powers, those nukes were not made for fun time, these fools are not idiots

  • Nic

    USA is killing the creation. Now everything come from Asia like Sony product and Samsung…
    Still media like face crap are in usa but I bet they will one day move to China.
    What I mean by that? , everybody will be forced to get out of USA one day because tax and rules will be non sustainable like France. Who want run a business in france? Everybody have left the hexagone for good. Look on TV, Holland want tax soccer players at 75%.
    USA is on the decline and rebuilt the USA will take at least 20 years now. Still people dont see it because most usa guys are brainwashed by soap TV and Netflix junks…. maybe I m an idiot? What do you think?

    • Hammerstrike

      That is the thing, Holland decided not to taxe the soccer players at 75%, because they “represent France”.

  • tom

    let’s not forget all the gold the Chinese are accumulating either….

  • JailBanksters

    If you break the Feral Reserve, you also break the Roth’s, they are interchangeable. The Roth’s are not going to be very happy campers losing their debt slavery cash cow. Unless there wasn’t a Plan 9 from outer space. Anyone one for a nice game of Global Currency Dominance from a Global Reserve Bank administered by a Global Governance and by Global I mean Jewish run, controlled.

  • John

    Michael, if China initiates the collapse of the USD, would the subsequent strength of the RMB against the USD cause the value of China’s existing gold supplies to take a substantial hit? Would this be an important consideration for China?

  • MAL3313

    You worry too much Mike. Helicopter Ben said a long time ago that he would stop QE when inflation hit 2.5% or unemployment dropped to 6.5%. All we need to do is stop excluding life’s necessities from the CPI or wait for 2 or 3 million more people to quit looking for a job and we’ll be there in no time! We could even stop mailing/direct deposit of unemployment checks. Make the ” unemployed” come and pick them up and say we’re paying them for coming to get it and…Ouella!!!…they now have a job and unemployment drops 500 basis points in the blink of an eye!!. Who could appreciate that kind of bookkeeping more than a central banker or a politician? . . .

    • jaxon64

      great post !!

  • davidmpark

    Every time I hear something like this it sounds like a symptom of the overall issue.

    I’ve already stated what I think of China and that they have no real ability to out do the US unless we collapse ourselves for them; so I won’t go into that. The focus should be on what the US, what we can do about it as most of this is really in our control and we brought this on ourselves.

    What this is, is that a collective decided to repeatedly harm itself. A collective that abandoned their own lives in pursuit of a collective consciousness. Call it socialism, communism, gangs, cliques, etc. – it was a means to abandon their adult responsibilities to embrace their happier, less stressed, and esteem-addicted selves from high school. Individuals that did not want to follow suit, who embraced their self, were pressured and then punished until they followed an unnatural collective over the cliff. This ideology that transcended into a religious movement of collective thought, emotional instability, self-harm, esteem and depression addiction, and adolescence became the image of their society.

    The problem is that there is no desire to produce anymore. The collective ideal is to be the world adolescent; not the local American Industrialist. That is why there are shortages worldwide – the nations that embrace the dictator end up with less as the dictator wants to be superior in every way. Poverty is normal – excess is for the rulers of the clique.

    Enough of a majority have embraced this collective, and placed in power leaders that reflect their mentality – whether they directly elected the leaders or stood afar to allow the ascendency. All China is doing is allowing us to collapse. They can’t defeat us in direct combat nor can they be a world power with communism/state capitalism. Neither can Russia. The only way for them to be better off is for their competitor (you and I) to be hurting worse than they.

    If there is to be a thriving United States again the collective must be dissolved. The individual released to build again with the good things of God’s green earth. We must be allowed, as human beings, to have dominion over the earth again.

    • TruthSlayer

      Sorry. Libertarian Bullsh*t. Align with the laws of nature, or die.

      We are from the earth, everything we ACTUALLY need comes from the earth. Air, water, food. We protect it at all costs, which means dissolution of ANYTHING that degrades nature past subsistence, or we hold hands as we run into extinction. Pretty simple. You can vault the individual and his noble quest for self expression, or you can figure out that nature has lasted all of these years through collaboration, not competition. Competition is a zero sum game, and we’re foolhardy to think that doesn’t include humans. Despite all of our high thoughts of ourselves, we are just another mammal in the ecosystem. We can live with that, or we can die fighting it. Mama Nature gives no sh*ts.

      This also means that borders are meaningless. Pretty much everything that isn’t food, water, shelter, air or cooperation, are meaningless.

      • davidmpark

        Fine. What’s your solution to this?

        Act like animals and die?

        Sorry mate; I’m human. :)

  • David Hedricks

    If only someone had warned us about ‘entangling alliances’ … Wait ….

  • DJohn1

    We made them what they are today. We can unmake them just as easily.
    What does the parasite have to do with the host? The answer is the parasite dies when the host dies in most cases. Which one are we? Host or Parasite?
    China depends on exports to live.

    We depend on imports to live.
    If either exports or imports gets to far out of balance the one doing the least will cut it off and claim they are doing it all. Sound like current events?
    What I see happening is a world war between China and the United States if we do not restore balance. It is not that far away in time.
    Okay, just for argument’s sake, China wins a war with us . . . Even if they win they lose. Not just the terrible destruction of people across the planet, but they have destroyed the host and themselves with it. Who feeds China? That is the key.

    The only parasitic relationship that survives long term is one where both the host and the parasite work together to produce a partnership where both survive. The tundra is one such example where two creatures work together to survive under terrible environmental conditions.
    China deserves respect. They have taken an unworkable system and changed it enough to make it the most successful enterprise on the planet.
    It is time we started balancing things out so neither China or the United States loses. That means the trade policies between us have to change. For one, they have to give us the same beneficial trade status that they enjoy with us. We have to produce things that they need in return for the goods we receive from them. At first that looks like China is going to lose. Not so. If they are on the receiving end long term they win big time.
    Their standard of living will continue to improve and the credit for that goes to their wise government.
    The alternative is a bankrupt USA. It might be a world war with a lot of people on both sides dying. It might mean a ruined planet. Who wins? Not the Chinese. Certainly not the USA. Things are bad enough that both sides need to give up things to make it work. Both China and the United States win if we make it work.

    • Nic

      Some Chinese companies are moving to Africa to pay lower wage.? Ethiopia and else.

      So no balance in the next 3 to 5 years.

  • Econman

    GDP in the US is fake. The Fed’s $85 billion/month QE injections are counted. Back those out & the US GDP is/has been negative for years. Total fraud.

  • truthteller

    Don’t worry about the US dollar losing global reserve status; the Chinese fear making that move, they know they will be nuked in response. Our (US) ‘pivot’ to the region is just for that reason; security for dollar hegemony across the globe.
    “Fear will keep them in line, fear of this battle station.”

  • Wally

    How much longer do you think this can will be kicked down the road. I have been hearing serious talk of collapse and worse for almost 2 years, even though collapse has been talked of for 30 years. From Alex Jones to Gerald Celente to The Economic Collapse Blog and on and on. It is almost getting to the point of crying wolf isn’t it? What does everybody think?

    • Joe Shmo

      I will agree that the road to kick the can is long. I’ve been absolutely amazed at the lengths that the FED will go to, to keep the USD afloat. It’s shocking the amount of manipulation in the markets that are tolerated. Anyone else would be prosecuted under the RICO act for this. But it has to end, at some point, IMHO. So I prep, and hope I’m wrong.

      • El Pollo de Oro

        When I think of the Federal Reserve, one word immediately comes to mind: audit. In the BRA, unfortunately, audits are for small mom-and-pop businesses, not banksters.

    • niel solomon

      my feeling is were here, 2014, there has been an escalation over the last three years and the friction resonance seems to grow in the last 2 months with the Russia china Ukraine debacle. I suggest a 4 kva generator, freezer and some tinned food peoples

  • greatlicht

    Collapse is unpredictable even you saying collapse will be here soon repeats.They going to do everything they can to kick can down for a while they still have a lot of stuff to use to kick can down till they cannot do that anymore

    That why i said it completely unpredictable.

  • jakartaman

    I read that if the USDA lost it world reserve status it would take an immediate 25-30% haicut

  • Bill H

    I myself do not fear what is coming, but I fear for my children. What a sad thing this country has become.

    • Nic

      There are job outside usa too for you. Your kids can teach English. Get a USA passport and Start looking out of your USA box. Plenty of USA citizen where I am.

      I m in Asia. Very happy here.

      Good luck.

      • Chris

        I’m living comfortably in Mexico. My ex-wife filed false allegations to her boss and myself and both of us were treated as dirt by the police. When I was released from prison over false harassment claims filed by my ex-wife, I left the USA.

        The “women’s right” movement is a Psy-op and I urge you men to screen your women not only for diseases and STDs, but whether they are one of those fehminists who are part of that cult.

  • john mcginnis

    Just as a counter point to all the doom and gloom. Who is now the largest net exporter of gas and oil?

    If you said the Sauds you would be wrong. As of June of this year they have been eclipsed by the US. So here is the plan. We tell the middle east to go stuff it. Pull out all our forces. A war will naturally erupt mostly the Iranians against the Sauds, but Israel too. China will want to intervene. Let them. In the ensuing conflict the oil infrastructure of both sides will be destroyed.

    In the aftermath of the conflict if China wants oil and gas for another decade,….. whose your daddy?? Yep in the most unlikely of situations they will have to come to the US for fuels.

    Cynical? Yes. Practical? Maybe. Does it take the ME to its ultimate conclusion as a glass parking lot? Certainly. But as they say follow the money and such an endgame the money flows back to the US.

    • Jimbo

      Where do you get your information? The USA isn’t a net exporter? It produces approx 11 million barrels per day and consumes approx 18 million barrels per day. The US has to import approx 7 million barrels per day to make up the shortfall. These figures come from the the US energy information administration. .

  • Kim

    What hope does anyone have. There is no more hope or future in this system – echoing what others have stated, it’s just a waiting game now. It could drag on for years, but as history has shown us, collapse can happen any time. James 5:1 howl you rich men for the miseries that are coming, your riches are corrupted and your outer garment moth eaten.

    • Tim

      I agree, Kim. Though I don’t want to see things get worse, I don’t see how it can be avoided. The Powers That Be will continue to try to delay the day of reckoning, but that day will ultimately come. It could be tomorrow or it could be 5 years from now. We just don’t know. Nobody knows. All we can do is prepare and wait–and trust that the Lord will protect His own.

      • Kim

        Thanks Tim. At least we are in this together. We can make it.

        • guest

          I don’t think we’ll be in it together because the first thing they will do is to cut off communications.

  • El Pollo de Oro

    Given the massive amount of debt The Banana Republic of America is facing and the debasement of our currency, there’s no way the BRA dollar won’t lose value. The question is: how much? I take the “optimistic” view outlined by Gerald Celente: a bank holiday, a formal devaluation of the dollar, and a “bail-in” (looting of bank accounts) along the lines of Cyprus. Post-devaluation, the dollar will have the value of the Guatemalan quetzal or the Moroccan dirham.

    Others are less “optimistic” and predict that the dollar will cease to exist. So you have the “optimists” like myself who think the BRA will end up like Honduras, Guatemala or another Latin American economy, and you have the “pessimists” who think we’ll end up like Haiti, the Congo or even Somalia. I’ve spoken to preppers who told me, “So, you think we’re turning into El Salvador? Don’t kid yourself, pal. It’s going to be a hell of a lot worse than that.”

  • ProphecyMom

    Probably also explains our cozying up to Iran lately. The sanctions became a catalyst giving China and India among others a reason to seek out alternative forms of purchasing oil from Iran, which began a series of bilateral agreements between different countries. Plan A didn’t work (i.e. go to war in Syria), so Plan B (let Iran have nukes in exchange for propping up the petrodollar a little longer) is now on the table. Too bad we are throwing Israel under the bus in the process. My stomach turns at the depth of evil being played out right now. Come quickly, Lord Jesus.

    • Nic

      That s right. Now USA is so desperate…. Deal with Iran. Uh?

  • bob

    welcome to the struggle every other country goes through – harden up usa

    • Nic

      USA will struggle more because they still rely on car. Car need fuel, road, and insurance.
      On top of this, they just ad Obama care.

      Car plus Obama, it’s an an extra 1000$ to earn.

      When Obama care will increase during 2014, party will be over. Then we will see mob and street fightings with Fema, dhs….

      You still can get a electric car and lower your cost , but these cars cost too much. Best way is to get a cheap scooter if possible.
      There is no way in the USA to make a good living because too many jobs have be deported and soon Chinese robots will invade every service job in the USA.

      Where we go? War?

      I live in Asia with 400$/month . I got all I need like TV cable with 4 channel in english , food, and small efficiency. U can live here well.

      • asianman

        US$400/month in Asia? life for the middle class here is struggling too..cost of living is escalating while living standard is deteriorating & corruption is out of control & air is bad in major cities. Asia is far from ok & governments are mostly corrupted, except may be Singapore . Asia could be worse than the US or the Europe when significant amount of hot money flows out. That’s why we bought gold and silver here. The trust on the government is basically nada. We are prepping too.

        This blog is informative for me. Be brave American & bring back your Ron Paul !

    • Nick

      When the US Sneezes the rest of the world catches the flu.

  • jonno

    Stop thinking the entire world will collapse when the USA goes down the toilet. Most countries are not as crime ridden, degenerate, dangerous, poverty stricken, polluted, miserable and unhappy as America. Over half the world’s nations are free and happy places though they may not enjoy the false prosperity the USA has convinced it’s residents it has. BTW, I live in Australia which is without doubt the finest place to live in the world, even the poor live well here. There is not one suburb in Australia that is similar to any of the thousands of overpopulated and filthy towns that blot the USA landscape, minimum wage is around $20 per hour, free medical, and if you can’t find a job you receive payments until you find work. Most Americas have been living the delusion they are special, you’re not, not even a little bit. But I wish you all good luck that you can survive and remember there is always a place for you down under, you will be made welcome.

    • jaded

      There is moral decay here, too. Our kmart is their walmart, every idiot is divided between liberal and labor, education is getting more expensive (and of course nothing will improve), luckily HECS is still around, we are also very materialistic and money driven, every a$$hole owns more cars than they need, there are a lot of problems here. Yes, not as bad as the good ole USA, and I probably wouldn’t want to live anywhere else, but there’s still some depressing stuff going on here.

    • Chris

      Mexico isn’t that bad when you don’t have an American fehminist wife who leeches on you and thinks their ish is cleaner than the world. American women are corrupted by the Protocols of the Elders of Zion and moral decay is in America just look at the FILTH which TV shows.

    • Nick

      Australia at this point belongs to China lock stock and barrel. The entirety of the Australian economy is based on providing goods and services to China. If you think that China isn’t going to exert pressure on your leaders or just land on your shores the moment it feels the US grip on the pacific is weakening you are delusional. When the US “goes down the toilet” Australia is going to be absolutely defenseless against Chinese expansion. Do yourself a favor and learn mandarin.

      All your great social programs and socialist spending comes from the fact that the US Navy has been protecting Australia since 1941. It is easy to be a workers paradise when you don’t have to spend hardly any money defense because good old Uncle Sugar is willing to send the pacific fleet to look after you.

      • http://www.teaparty.org/about-us/ Nixys

        Aussies are one of the most anti-American people in the world, precisely because they are so desperately dependent on us. Frankly I am utterly disgusted by them and their moral pretensions. I doubt I would willingly volunteer to save Australia again. My grandfather fought the Japanese in New Guinea, and said he “loved Australia.” He was an honorable man, had flashbacks for years in the middle of the night. Went to college on the GI bill and became a history professor, then died of cancer in middle age. Truly part of the greatest generation. Modern Australians who act like they won that war single handedly, or still wish for the “commonwealth” and deride “those Yanks” just absolutely boil my blood. They are one of the most graceless peoples on Earth, in my opinion.

        • Nick

          Agreed and I really think it is about time we give the smug Euro trash and the former colonies everything they ask for. It is long overdue that US troops where brought home. No more bases in Europe and no more Naval bases in the pacific. The American military protects America, no one else.

          I wonder how smug they would be with the Chinese navy patrolling the pacific unopposed.

          • http://www.teaparty.org/about-us/ Nixys

            That would be a lovely dream, and some deluded arrogant Europeans actually believe it would HELP them for the American military to go home (HAHAHAHAHAH what assh*oles they are) but remember when we tried to do that in between WW1 and WW2? Yeah, didn’t end well.

            The simple truth is that the instant America become isolationist again, the entire world will feel a huge amount of pain from the power vacuum, and will (if they aren’t too stupid to realize it) very quickly start loving Uncle Sam again.

          • Nick

            At this point I don’t care if the rest of the world would have to suffer with endless war and misery if we where to become isolationist again. It is long overdue that we put US interests ahead of the interests of ungrateful Euro trash and their pissant former colonies. Americans have suffered long enough to protect them and all we have ever gotten in return is lectured on how terrible we are for making the effort.

          • http://www.teaparty.org/about-us/ Nixys

            I increasingly agree with you. Maybe they are due for another lesson. It seems that each new generation has to learn all over again.

            Well, I for one will always put my fellow Americans first.

          • Nick

            Agreed. Europe and the colonies remind me of those terrible alcoholic parents that constantly show up on their successful kids door step looking for a hand out. They constantly need to be supervised otherwise they do idiotic garbage. Every time we leave them to their own devices they start another world war.

          • http://www.teaparty.org/about-us/ Nixys

            Hahahaha. Exactly. Thanks for the laugh.

          • Nick

            No problem :)

    • http://www.teaparty.org/about-us/ Nixys

      I would rather die than move to Australia and become a smug anti-American pr*ck like you. I would rather live in the most desperate poverty. I mean that sincerely.

    • DiscouragedOne

      I have heard your immigration policies are pretty strict, so I really doubt that.

  • Bert Pogi

    Inevitable !!!!

  • Hammerstrike

    Yeprly

    dailymail.c o.u k/news/article-2168507/Footage-shows-brand-new-Angolan-city-designed-500-000-lying-empty.h tml

    These aren´t for the natives.

    • niel solomon

      you get your info knowledge from the UK daily mail really dude wake it and shake it honestly

  • Tony

    So, if China does that why not deprive them of the money that we owe them …go to war if necessary and start over with our economy using only U.S. products and boycott imports……I actually believe the U.S. could be fully functional w/o the outside world….

    • DiscouragedOne

      Because the globalists bought off our government, and they won’t let that happen.

  • Nic

    Go see in Switzerland. Unemployment is very low. Highly educated and professional people, stable Swiss francs, smart politicians. (not all, but Swiss seem happy)

    Small countries can manage better their local economy.
    Switzerland has never been part of Europe because people belive on local people. Not in a crashing machinery where fiat money is number one.

    Europe and USA were just too greedy, now they pay the consequences of their big dreams. In fact Europe went down when they created it in 1990.this is why Switzerland never joined Europe. Europe had nothing to prove at this time. Except a dream..

    It s just a shame…. USA was in the past and great country with great ideas and great people. A few idiots turn it into a swamp or a modern Republic bannière.

    • EnjoyTheCollapse

      Switzerland is indeed a part of Europe (the continent), but it is not a part of Europe (the European Union). But you make an excellent point about how successful the Swiss are outside of the union.

  • Joe V

    A lot of the borrowed money is being piled into the US military and the domestic police, and for a good reason. If countries around the world or Americans at home get fed up and try to push back at the American system that’s in charge, they will end up with guns pointed at their heads. The current gang of depots running Washington and in New York have learned well from history. In the end it always comes down to who has the most muscle.

  • http://www.facebook.com/joseph.kuan.98 Joe

    Some people look at this as China screwing US on purpose but it’s the US itself printing massive amount of money. Also all these direct trades in yuan, it takes both countries to agree a deal that means it’s not only China nodding the head to avoid US dollars.

    Some people say the US has untouchable military might to protect the dollar. But I think it would be immature to use military to pressure those countries. Because US, 1) will further going into unserviceable debt, 2) will further push up gold price 3) it’s the rest of the world losing confidence on US dollar, not only China. 4) I don’t think the Saudi would be happy selling oil to US for the war on China.

    If you are the creditor seeing your debtor cooking the book and showing no effort to service the debt, would you do something to protect yourself against debts?? Like reducing your exposure to their liability (direct trade deals) or stacking up gold (anti-dollar). In other words, China is just HEDGING against their risk which the Wall Street knows very well how.

    • DiscouragedOne

      The globalists did this, they have sold America down the river.

  • Chris

    I’m a proud non-Zionist Christian and I believe that the commie “womens’ rights” ( check the quotes) movement is one of the diseases which is destabilizing the USA.
    I got married to a ball-busting, aggressive business woman a pit bull in a miniskirt who wanted to have it all..she
    acted aggressive and pushy like some men and yet continuously played on
    her looks and ended up getting 3/4 of a million with a trumped up
    charge of saksual harassment against her boss that she set up in a hotel
    room by seeducing him and showing cleevage at the workplace…I got out of the marriage by annulling it for
    fraud but it was a harrowing experience. She reported to the police that I physically assaulted her she showed a piece of her thigh with a scrape she selfinflicted and I spent more than 4 days in a holding cell. I wasn’t even given my rights. I fled the state and I am residing in Mexico.

    I’m fed up with most American women. They are the demise of this country.

    • Chris

      I fled the state after being released with no charge on January 07, 2013. I have no warrant against me for NO CRIME BUT ALLEGATIONS FROM A STUCK UP 24 YEAR OLD TEMPTRESS AND CAREERSLUT.

      AGAIN, I AM NOT A WANTED CRIMINAL, BUT i was FALSELY ACCUSED BY MY EX-WIFE AND RELEASED WITHOUT CHARGE.

      • DiscouragedOne

        I would like to have some sympathy for you, but when you come on here blaming all American women for your own bad choices…well, you don’t deserve any.

        • guest

          Most western womyn are useless garbage.
          It might not be their fault, indoctrinated, etc but it doesn’t make it any less true.

          • DiscouragedOne

            You seriously need psychiatric help, I suggest you seek it.

          • DiscouragedOne

            Michael, why do you allow the posts of trolls like the one above?

    • Nic

      I agree with u. At the end I was so miserable with usa women that I moved to Asia.

      Here ladies are nicer. Féminin… Unlike the US bulldozers.

    • Rob Kinney

      If I were you, there’s no way in heelll I would have gotten that marriage annulled until I got half of that money. You should have gave her a little taste of her own personality there, for sure. Canniving manipulative slutts like that make me sick with their flowing hair and that juicy gash between their legs that they think is just made of gold. They know most men will just do anything to get a sniff, well not me, I’d rather eat a half-rotten catfish, they smell about the same anyway. I wish you luck in Mexico, at least next time if you meet a girl like that, you will know to R-U-N-N-O-F-T!!! lol

      • Man, not Misogynist

        I’m pretty sure I’m seeing things, because it looks like a man who just said “Canniving manipulative slutts like that make me sick with their flowing
        hair and that juicy gash between their legs that they think is just made
        of gold. They know most men will just do anything to get a sniff, well
        not me, I’d rather eat a half-rotten catfish, they smell about the same
        anyway.” is posing in a picture with a girl child. Hopefully not one he is responsible for raising, given his comments.

        And learn to spell.

        • Rob Kinney

          Why don’t you come lick my assss, cocksucker? That’s about what I think you’re opinion is worth.

          • Rob Kinney

            *your

  • Scott

    The problem with this is the government quit saving that money for you long ago and has already spent it.

  • Chris

    the “women’s rights” movement in the USA is a menace to society and the American economy. Do you know how many men were falsely accused of saksual harassment in the workplace and how many male bosses had to close down their businesses after being sued hefty sums by careersluts who sued the living daylights out of these medium sized businesses?
    But why do you hardly see any multi-billion dollar corporation being sued by these fehminists? It’s because these corporatiions fund the fehminist movement!!!

    • DiscouragedOne

      No, most American women are NOT like that, just because you married an insane woman, don’t blame the rest of us, how about you take responsibility for your bad choices.

      • Nic

        Best is to stay clear out of women… I got several who ask me to marry or made allusion to this stupidity of marriage document . I made it clear, “dream baby dream”

        Still very happy being single with a nice lady.

        • DiscouragedOne

          And she can leave anytime she wants just as well as you can, no “papers”, easy to walk. Commitment requires some courage, riding it out through good and bad and sticking it out no matter what. That is true love, love without commitment…that is easy, so I am NOT impressed. 22 years and still going strong, and marriage to the right person is a great thing.

        • LifeIsBeautiful

          Marriage is great if you are mature enough to pick a good partner. Don’t marry someone who is argumentative, and don’t have kids. Life is bliss.

          Get a dog or a cat if you like the pitter patter of little feet.

          10 yrs in, and it keeps getting better.

  • Jimbo

    You need to read the article again. The USA is a net exporter of petroleum based products (fuels). It is not a net exporter of oil and gas and it likely never could be.

  • GSOB

    File Bankruptcy now, if you are thinking about it, and still have that right.

    • Debt Slave

      Great idea… oh wait, can’t discharge student loans, our only significant debt. F*ckers.

      Modern day slavery, yet no one is outraged. Literally.

  • whteshark

    Do us a favor, China, and blow it up. We’ll never fix this debt problem ourselves and only intervention can do it.

  • John Cunningham

    Someone suggested that maybe the Chinese government was actually behind the creation of Bitcoin, and that Satoshi Nakamoto, the unknown inventor of Bitcoin, is actually a pseudonym of a secret department of the Chinese government. Satoshi Nakamoto is estimated to hold about 12% of the bitcoins in existence.

    Chinese TV keeps saying nice things about Bitcoin, which implies that its government does not disapprove of its citizens owning them. Chinese citizens seem to be investing in them, as demand in China has driven much of the recent price run up.

    Certainly the Chinese want to see the end of the U.S. dollar as the world’s reserve currency, but their problem is that they hold too much U.S. debt. Bitcoin could be their way out of the quandry.

    Perhaps their plan is to accumulate a huge stake in Bitcoin while the prices are still low, and when the U.S. dollar starts to crash, they might simply switch to Bitcoin and encourage the rest of the world to follow. That would accomplish one of the greatest transfers of wealth in the history of mankind!

    Is it possible that the Chinese government is just that clever?

    • Catalin Oancea

      The thing with Americans in general is that they think the world needs them because they are an example of a free, brave, rich and smart society. What they forget is that, before colonists actually came to that “savage” continent, Europe and Asia had thousands of years of wars, trade, society, culture and whatever else there is that defines society. Because most Americans are so proud, they can’t see how foolish they have become and they’ve forgotten that they are all colonists and vassals under the crown. The USA is the largest colony in the world and the people that hold the true power have never been in your country. Europe and Asia still hold control over the world and they always had; it’s been a ping pong game between massive empires like Babylon, Medo-Persia, Greece, Rome and so on.
      The reason for the existence of the USA is simple: those that ruled in Europe needed an example so that they could change society at home, so what better way than to paint this country as a perfect example of whatever and then have everyone follow them. To better evidence this they have recently created communism. In the past there was the difference between “For the people, by the people” and monarchy.
      Don’t underestimate societies which have existed thousands of years before you were even born; since most of you do, you will find out the hard way just how smart and devious these are.

    • malik mohan

      The warped thing about Americans—and their legion of apologists—is they instinctively imagine the USA to be the “victim” of nefarious plots by foreigners.

      In the early to mid-2000s, the USA deemed the European Union (and the rise of the EURO as a possible reserve currency) to be the preeminent “threat” to America’s Almighty Dollar—now it has been transformed into a rehashed version of the Yellow Peril with China.

      Regardless, this is just a compensatory tactic to avoid facing the actual crimes that America is guilty of throughout the world.

      It seems that psychological projection is an American national pathology.

      As I stated elsewhere, the US Dollar Reserve currency has enabled America to extract the “greatest economic free ride in history,” according to the economist Michael Hudson.

      One of the dirty secrets of America’s beloved Dollar Reserve system is that the
      billions of dollars that other nations have “loaned” to the USA are never going to be repaid.

      The US Dollar Reserve currency has effectively allowed America to posses a “no-limit credit card” that it will never have to settle accounts for.

      And this perverse system of American financial vampirism has been ongoing for decades since 1971.

      America’s jealously guarded wealth and prosperity are thus significantly based
      upon financial bloodsucking on a world historic scale.

      Yet this reality is predictably denied and even inverted, with America cast as the innocent victim in this arrangement!

      Now that the US Dollar system is possibly going to implode–and deservedly
      so–Americans are becoming psychologically unhinged with the prospect that that their Day of Judgment is coming.

      The fundamental question becomes: Will America go for the Sampson Option and
      take the planet with it (like, say, a nuclear war), if the USA feels it can longer rule the world, as its God-given birthright as the indispensible, exceptional nation?

  • Doug Nusbaum

    Did you notice that the author did not mention food or pollution? Go ahead, buy RMB. It has only lost 7% of its value in the past year. Do you really think that an economy build on a septic tank has much staying power? Or one that imports so much of its food? And if China is so good, then why is such a high percentage of its wealthy people leaving and taking their money with them.

    Is there no limit to the stupidity here?

  • JustanOguy

    Interesting… however… The U.S. is more then self sufficient in the most important commodity known to man and that’s food.

    China’s massive population relies on food imports as does Saudi Arabia and many other middle east countries.

    What’s more important to you? Oil and cheap products or food?

    When the Weimar Republic said “up yours” to the rest of the world in the debt that it owed… not much that anybody could do about it. It was Germany’s eventual choice of attacking the wrong countries (Primarily Russia) that eventually led to it’s downfall.

    Think about it.. It’s a lot more complicated then just who owes what. The U.S. was just fine long before the $$ was the de-facto reserve currency.

    Sure… Wall Street will burn and Americans won’t be able to buy a bunch of cheap junk but there will be a lot more countries that will end up in FAR worse shape. Heck… the U.S. probably has enough junk sitting in storage sheds across the country to last a couple of decades.

    Not too long ago… you wrote a post about how much food is thrown away in the U.S. Can’t remember but I don’t think you even mentioned how much food the U.S. exports each and every year.

    Regardless… the flaw in your doomsday scenario is forgetting what happens to all of the countries that rely on U.S. consumers and free handouts…. and the food it produces.

    —Cheers!

  • Jimbo

    In reply to your comment that is awaiting moderation.
    I am well aware that the USA is now the worlds largest oil producer. However, what you stated in your first post was that the USA is the worlds largest net oil exporter.
    That is incorrect. The USA is the worlds largest consumer at 18 mbpd and produces 11 mbpd. They import the shortfall. The USA is a net importer of oil at 7mbpd.
    The US is a net exporter of refined fuels only.
    You have made a conclusion based on mixing two different sets of figures and come to the wrong answer.

    By the way, I am a chemical process engineer employed in the Oil and Gas industry by a US company. I know my own industry..

  • fdg

    I read your all 3 blogs all the time but I think you reuse old texts to often

  • A D

    Only a fool thinks watching sports on a CHINESE made TV on Oboma food stamps is going to last forever…

  • Jimbo

    I am not in denial. I understand the numbers in the article and you don’t. The article you have just linked to states that the US is the largest oil producer in the world. That is correct. The article that you first linked to states that the US is a net exporter of fuel. That is also correct.
    Your interpretation however is that the US is a net exporter of oil. That is incorrect.
    You have put two and two together and come up with five.
    I know what I am talking about. I am a chemical process design engineer in the oil and gas industry.

  • michaelbme

    When those dollars come back to the USA, we will have a lot of inflation for a while, but maybe we can use that extra cash to pay off mortgages and debt, public and private. That will extinguish any inflation.

  • DiscouragedOne

    What is the deal with people on this site? Most American women I know including me are NOT feminists and have no use for women’s lib. I have to run to keep up with my husband, his stride is twice as long as mine…I am always like, slow down! Seriously, when did this become the “people who have a hard on against American women who don’t deserve it” board, or is this just the same user with different logins talking to himself?

    You are all starting to sound paranoid and pathetic. I have known like 2 femnazis in my life, and I know lots of women.

    Get a life you guys, this is STUPID!

    • Catalin Oancea

      What is your problem? I was only pointing out that he is making an interesting point, I was not supporting his hateful attitude towards all women. It seems that you are the one who feels offended by all this, probably due to your personal insecurities. I personally have a life and know women who are very normal and those women won’t get offended if I told them the above. Is it just me, or are you sounding like a feminist? Denying it doesn’t absolve you of that hateful comment you directed towards me. You don’t have to be part of an organization to actually be like them, it’s the mentality that’s giving you away. But, whatever, I am used to these types of comments from judgemental people.

  • meridianlesilie

    I am still trying to figure out how OBama got elected back in we got some real stupid people

  • meridianlesilie

    we need to make our own stuff not rely on china even band-aids from Johnson& Johnson ,are made in china hhmmm well when I was growing up there was hardly nothing made from china was hong kong
    hot wheels was made in Malaysia ,other stuff is Thailand well what would the economy be like if rommny was in .well like they say less government involvement is better for U>S we need to do something send Obama to go to work in china be a good start !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

    • Eric Quintero

      Yeah lets outsource Obama to China. Call it the Democratic Executive Redistribution Plan. DERP for short.

  • disappointed

    so where do we start? should we shift from buying stocks to bonds? should we be burying all out metal jewelry in jars in the back yard? is anything going to make a difference? many people that see it don’t know where to begin. especially the regular “average Joe” that would never have considered investing in the stock/401K world, until their companies insisted. what can we do?

  • meridianlesilie

    we don’t have much jobs !!!! well what is wrong with sending all the illegal immigrants back where they come from we should have 1st pick if it came down to it if they want to be that way if we have to have them work instead of US

  • Sonshine

    China has more to lose than all the economists state. The one thing that would happen to China if the US dollar dies is economic collapse. So you can scare people with this article but reality is China is that crazy!

    • John Reyes

      their just did that today

      • Sonshine

        Despite all the rhetoric the international reserve is still the US dollar.

  • StrongTogether

    This is nonsense.

    If you don’t like strong women, don’t marry one. There are plenty of traditional women around. Be careful of the Christian Bible Belt though, as they have a higher divorce rate than the national average.

    If you don’t want to marry someone gay, don’t marry them. No agenda, just say no. Preferably when they ask you out before the first date, but DEFINITELY when they propose!

    If you say you support freedom and justice, you actually have to support efforts to oppose breaches of freedom, (like who to love, marry, or pay benefits too) and Justice (like human rights, marriage rights, medical rights, etc) That’s just how it works. When THE PEOPLE stop supporting each other and ALIGN with corporations, political parties, etc, that’s the path to our demise. WE are strong together, NOT divided.

    • Catalin Oancea

      You’ve missed the point entirely, but I don’t have any expectations from most people to actually see beyond the veil of society. I will not stand united in sin and will never support the people in their filth, I would rather be divided in truth. The greatest battle that someone wages in this world is with the self. Then, once your self is overcome, you can start to actually see what’s going on:

      “For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places.” – Ephesians 6:12

      “3 For though we walk in the flesh, we do not war after the flesh:
      4 (For the weapons of our warfare are not carnal, but mighty through God to the pulling down of strong holds;)” – 2 Corinthians 10:4

      I don’t see myself as high and mighty, I am just one who found mercy with God. I hope you do too.

  • Johnny Shiloh

    If only we had a Margaret Thatcher instead of an Obama.

  • dan_2000

    What you mention in your last three paragraphs just came true on 2013-11-20 when China announced that is going to stop stockpiling foreign currency reserves.

    It is too early to tell, but something big could happen as soon as February 2014. France 24 mentioned the averted crisis in Washington in October but failed to mention the debt ceiling was raised only until February 2014. With China’s recent announcement and the US having to deal with another debt ceiling situation come February 2014, this could be the right moment for China to do something that will end the dollar’s reserve status in one abrupt move.

  • Jd

    but why would china want to do that? nearly 40% of their exports are sent to US, if their biggest customer defaults or could not buy their products china would have to close down its industries and that would ultimately lead to financial collapse in china…

    • Antidote

      Probably because China want to become the first leading communist superpower and the US downfall is a well planned strategy…

      • Michał W. Solański

        Absurd. US downfall would be catastrophic to Chinese economy, since they would lose a major customer. Who would buy all that crap they produce?
        I won’t even start on the very American use of the word “communism” (which in this context makes as much sense as “satanist”).

  • lilbear68

    IMHO china has backed off buying US debt because they have run the numbers and come to realize that we have neither the ability or intention to make good on that debt. now they are working on buying up US real estate which the Japanese tried in the 80′s. they also came to realize that while we may buy your crap we don’t have to do business with you in this country

  • farang

    “Right now, the global move away from the U.S. dollar is slow but steady.
    At some point, some trigger event will likely cause it to become a stampede.
    When that happens, demand for U.S. dollars and U.S. debt will disintegrate and interest rates will absolutely skyrocket.
    And if interest rates skyrocket that will throw the entire U.S. financial system into chaos.”

    Not really: us savers recall very well how Paul Volcker managed to tame the rampant inflation caused during the Nixon administration withdrawing from Vietnam, that continued through the Ford administration and was dumped on Carter’s administration as if he had caused it. High Interest rates are coming borrowers: hold your nose, open wide, strong medicine is coming soon!

    You see, us savers EARNED 14% interest on our T-Bills back then.

    If that is “financial chaos”, please hurry it along, Yellen!!!

    Currency dies, is reborn, life goes on……Gold last forever.

    That Central Bankers loathe it…should be all the justification a reasonable person needs to invest in it.

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