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The Last, Great Run For The U.S. Dollar, The Death Of The Euro And 74 Trillion In Currency Derivatives At Risk

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Dollars Euros - Public DomainAre we on the verge of an unprecedented global currency crisis?  On Tuesday, the euro briefly fell below $1.07 for the first time in almost a dozen years.  And the U.S. dollar continues to surge against almost every other major global currency.  The U.S. dollar index has now risen an astounding 23 percent in just the last eight months.  That is the fastest pace that the U.S. dollar has risen since 1981.  You might be tempted to think that a stronger U.S. dollar is good news, but it isn’t.  A strong U.S. dollar hurts U.S. exports, thus harming our economy.  In addition, a weak U.S. dollar has fueled tremendous expansion in emerging markets around the planet over the past decade or so.  When the dollar becomes a lot stronger, it becomes much more difficult for those countries to borrow more money and repay old debts.  In other words, the emerging market “boom” is about to become a bust.  Not only that, it is important to keep in mind that global financial institutions bet a tremendous amount of money on currency movements.  According to the Bank for International Settlements, 74 trillion dollars in derivatives are tied to the value of the U.S. dollar, the value of the euro and the value of other global currencies.  When currency rates start flying around all over the place, you can rest assured that someone out there is losing an enormous amount of money.  If this derivatives bubble ends up imploding, there won’t be enough money in the entire world to bail everyone out.

Do you remember what happened the last time the U.S. dollar went on a great run like this?

As you can see from the chart below, it was in mid-2008, and what followed was the worst financial crisis since the Great Depression…

Dollar Index 2015

A rapidly rising U.S. dollar is extremely deflationary for the overall global economy.

This is a huge red flag, and yet hardly anyone is talking about it.

Meanwhile, the euro continues to spiral into oblivion…

Euro U.S. Dollar

How many times have I said it?  The euro is heading to all-time lows.  It is going to go to parity with the U.S. dollar, and then it is eventually going to go below parity.

This is going to cause massive headaches in the financial world.

The Europeans are attempting to cure their economic problems by creating tremendous amounts of new money.  It is the European version of quantitative easing, but it is having some very nasty side effects.

The markets are starting to realize that if the value of the U.S. dollar continues to surge, it is ultimately going to be very bad for stocks.  In fact, the strength of the U.S. dollar is being cited as the primary reason for the Dow’s 332 point decline on Tuesday

The Dow Jones industrial average fell more than 300 points to below the index’s 50-day moving average, wiping out gains for the year. The S&P 500 also closed in the red for the year and breached its 50-day moving average, which is an indicator of the market trend. Only the Nasdaq held onto gains of 2.61 percent for the year.

There’s “concern that energy and the strength in the dollar will somehow be negative for the equities,” said Art Hogan, chief market strategist at Wunderlich Securities. He noted that the speed of the dollar’s surge was the greatest market driver, amid mixed economic data and concerns about the Federal Reserve raising interest rates.

And as I noted above, when the U.S. dollar rises the things that we export to other nations become more expensive and that hurts our businesses.

This is so basic that even the White House understands it

Despite reassurance from The Fed that a strengthening dollar is positive for US jobs, The White House has now issued a statement that a “strengthening USD is a headwind for US growth.”

But even more important, a surging U.S. dollar makes it more difficult for emerging markets all over the world to borrow new money and to repay old debts.  This is especially true for nations that heavily rely on exporting commodities

It becomes especially ugly for emerging market economies that produce commodities. Many emerging market countries rely on their natural resources for growth and haven’t yet developed more advanced industries. As the products of their principal industries decline in value, foreign investors remove available credit while their currency is declining against the U.S. dollar. They don’t just find it difficult to pay their debt – it is impossible.

It has been estimated that emerging markets have borrowed more than 3 trillion dollars since the last financial crisis.

But now the process that created the emerging markets “boom” is starting to go into reverse.

The global economy is fueled by cheap dollars.  So if the U.S. dollar continues to rise, that is not going to be good news for anyone.

And of course the biggest potential threat of all is the 74 trillion dollar currency derivatives bubble which could end up bursting at any time.

The sophisticated computer algorithms that financial institutions use to trade currency derivatives are ultimately based on human assumptions.  When currencies move very little and the waters are calm in global financial markets, those algorithms tend to work really, really well.

But when the unexpected happens, some of the largest financial firms in the world can implode seemingly overnight.

Just remember what happened to Lehman Brothers back in 2008.  Unexpected events can cripple financial giants in just a matter of hours.

Today, there are five U.S. banks that each have more than 40 trillion dollars of total exposure to derivatives of all types.  Those five banks are JPMorgan Chase, Bank of America, Goldman Sachs, Citibank and Morgan Stanley.

By transforming Wall Street into a gigantic casino, those banks have been able to make enormous amounts of money.

But they are constantly performing a high wire act.  One of these days, their reckless gambling is going to come back to haunt them, and the entire global financial system is going to be severely harmed as a result.

As I have said so many times before, derivatives are going to be at the heart of the next great global financial crisis.

And thanks to the wild movement of global currencies in recent months, there are now more than 74 trillion dollars in currency derivatives at risk.

Anyone that cannot see trouble on the horizon at this point is being willingly blind.

  • T.

    Derivatives and Loans are tied to the Price (value) of both the Dollar (which has risen over 20%) and Oil (which has fallen over 50%) in the last 10 months and 6 months respectively. This has a Whip-Sawing effect on those Derivatives and Loans. So, Investments and Companies are already breaking or broken and these losses will start surfacing in greater numbers with each passing month. This is the year of the Shimetah (Sep 13th) – The elite will bring it ALL down by October 2015. That is the Plan – They are working Their Plan.

    • MichaelfromTheEconomicCollapse

      A lot of great points in one very succinct comment.

      I like it!

      Michael

      • K

        Michael, I totally agree with the willingly blind comment. It is why we do not reach more people. There are none so blind, as they who will not see.

        • jaxon64

          K and Michael, you both nailed it! Often when people post a reference to “The Matrix” as comments it is about the red pill/blue pill awakening- this is important but still only part of the issue………..
          The most poignant scene in the movie is when the turncoat human is sitting at the table eating a steak and making a deal with the matrix agent, “I know this steak is not real, that the taste and juiciness are all just constructs of the system but I enjoy it anyhow- I want to be plugged back in” ……..this is a paraphrase but it shows the mindset of millions of apathetic Americans.
          It is called Cognitive Dissonance- the refusal to believe something regardless of the amount of proof or empirical evidence. This is also why so many refuse to even listen if someone tries to discuss the true issues or mentions that there really is a man behind the curtain.

    • gfmucci

      Who is “they” and what is their “plan” and toward what end/purpose? I’ve heard various interpretations of who and why, but would like your version.

      • T.

        THEY are a Cabal of Banksters who Control this present “World Monetary (fiat) System.” Through Their Monetary System THEY Control NATIONS – Yes, the U.S. is Their center piece of that Control. For the U.S. has the “Reserve Currency (and Petro $) and since WW2 the mightiest Military Power in the world through which THEY enforce Their will upon other nations. I believe THEY are headquartered in the City of London. From there, THEY rule over this present evil “World Monetary System.”

    • K2

      Can you elaborate, if one is falling doesnt the rise of another make up for it?

      • T.

        No. It depends on what the Loan or Derivative is Tied to. Those which are tied to the Dollar are Whipsawed be the $’s meteoric Climb and will Break at some point. Those Tied to the Price of Oil are Whip Sawed by the Price plunge and will Break at some point – Due to the Price of Oil Falling at such a Rapid rate – And Not Recovering. When these Derivatives and Loans have such HUGE Percentage moves in such a short TIME span – They BREAK. I hope that helps you to understand those two Financial instruments better. God bless.

        • K2

          arent there loans or derivatives that are also tied to a rising dollar or falling crude?

          • T.

            First of all the Derivatives markets are opaque and not transparent so we do not know exactly how much of what was bet on any contract. But most D’s are put on to provide insurance if/when a market goes against you, hence the rapid decline in the Oil price has to have Triggered many of that D. hedges. Because the market is Opaque, the Institutions (Banks/Hedge Funds) holding them are not immediately Known. Also, many Loans were made by Companies in the Oil patch and were profitable with $80 or higher Oil. Many of these Companies are starting to go Bankrupt (can’t pay on those Loans) and will surface as Oil prices stay around $50. Many Economically Developing Countries took out huge Loans in Cheap $’s and with the $ now more than 20% higher those Cheap $ Loans are killing those Countries as they have to pay them off at more than 20% higher rates.
            As far as Derivatives and Loans made on the other side of the Price moves of $’s and Oil – No, it is not likely in D’s at All and Not even possible for Loans.

          • K2

            Many economically developing countries though lose by a rising dollar also gain by a falling oiling price as oil price usually tears into their revenue (they spend hundreds of billions in importing oil). So a rising dollar at a time of falling oil prices is not as bad as we think, for those countries. And most developing economies import rather than export oil. Also how much interest they pack back also depends on their credit ratings (if i am not mistaken) and credit ratings also go up when oil price falls down for these countries

            So lets keep the discussion limited to developed countries.

            The point about oil patch companies…i am with you on this that its bad for them.
            I too said the same think a few weeks back on another article.

            My question infact was only about derivatives. And for that you said derivatives are not transparent twice and yet you proclaim how they work. And you said they are only made on a falling oil and rising dollar, i asked you what about the presence of derivatives on a rising oil and falling dollar and your only answer is its not likely? why is it not likely?

    • retired22

      This is not a plan!
      The powers that be be are in headlong retreat,they are not in control.What we will be getting is chaos & anarchy,not some grand plan!

      • T.

        Yes, chaos and anarchy are the desired result of the Plan. How long have you been retired? I am retired but you do not seem to be clued in as to what this evil elite are capable of doing and have already done on a grand scale. This Plan is called the Hegelian Dialectic; Thesis/Antithesis/Synthesis or
        Problem/Solution to Problem/Amalgamation or Anarchy/Martial Law/More Power for the Plutocracy (elite). This is the way the “power elite” operate and through a process called “Gradualism” – However, we are now entering the “End Game” so everything is increasing in both Intensity and Frequency.

        • jaxon64

          Bravo… you get it. As an aside, try and be a bit nicer toward those who legitimately are waking up to what is occurring–we are going to need each other to get through this if we ever have any chance against such an encompassing, well-funded and powerful construct that the elitist cabal has worked to put in place,

          • T.

            I don’t think I was too harsh with the Big Boy. He really MAULED me a few weeks ago on some of my posts. His name-calling was from the pit – very bad language by some one who simply disagrees with another. God bless.

  • Eric Rasbold

    A strong dollar is bad for exports…that might be an issue if we were an exporting country, which we ain’t. People are taking profits off of equities. The strong dollar run up hasn’t hurt the major indexes in the last six months, why would they think it responsible for today losses?
    I smell an awesome long Euro trade once the psychological support hits parity – I am all in then. The Euro (read: Germany and it’s client states) will not fall without a hell of a fight.

    • AvidReader

      “The euro will crash and burn” says Martin Armstrong. It’s going on right now. With no shared bond market and no political and fiscal union, the euro is dead. Don’t waste your money on it. I hope the collapse will happen fast, so we will have our own currencies and sovereignty back.

      • Horiboyable .

        Martin Armstrong is amazing and always on the money. I would like to be able to chat with that guy for a day

    • VegasBob

      We’ve become a net importer of food, but we still export trash (scrap metal) and armaments. The price of US armaments is basically irrelevant, since most of the tab for weapons sales is picked up by various US government foreign aid programs. The unpleasant reality is that the US economy would completely collapse if the US Empire were ever forced to shrink in size.

  • SunnyFlaSnotress

    “You might be tempted to think that a stronger U.S. dollar is good news, but it isn’t”

    If it means I can buy more cheap foreign goods, it IS good news. I’m not heavily in stocks,so if fat cats lose, it’s no skin off my nose. I’m not going to lose a job, cause I don’t work for anyone else. I like watching stock guys strike poses of oblivion while they make 6 digit salaries.

    • Francois

      its really about the unraveling of the structure of our economy and every other economy in the world. Things may be get cheaper, but there may be no things to buy and you may not have customers or any shekels to buy. Not so good, right?

      • SunnyFlaSnotress

        There will be lots of foreign goods to buy and I will have customers.. not that I need so many. It will inspire American companies on foreign soils to manufacture and send stuff on home.

        • Gay Veteran

          I fixed your sentence:
          It will inspire American companies on foreign soils TO CONTINUE SHIPPING AMERICAN JOBS OVERSEAS AND to manufacture and send stuff on home.

          • SunnyFlaSnotress

            In the words of Freddy Prinz.. “EES Not My Job, Man”!!!

    • Gay Veteran

      those “cheap foreign goods” have a high price: the shipping of millions of American jobs to China, India, Vietnam, Mexico,etc.

  • janef

    I have come to the realization that our government and financial institutions are corrupt. As most of you probably know I posted numerous pro Obama posts on here. My work assignment was to refute the assertion that America’s economic situation is deteriorating. I was given a list of pro-Obama talking points to post on various websites. Initially this was very easy to do. I passionately supported Obama and the Democratic party. Most of my family are die hard democrats who demonized the Republican party.

    Thus, I fervently believed that people affiliated with the Republican party were inherently evil while Democrats were the morally superior party.

    However, I came to the following realization. There are Democrats who are very corrupt and have characteristics of a sociopath while there are Republicans who are dedicated to improving America. One has to judge a leader by his character and accomplishments. Not his party affiliation.

    At least 90% of the responses to my posts were negative. This led me to questions the validity of the data I was posting. What I found truly disappointing is that late in 2014 congressed rammed a $1.1 Trillion dollar spending bill through congress. In the bill, provisions of the 2010 Frank Dodd act were rolled back. Therefore, ordinary Americans could be put on the hook for derivative losses incurred by banks. This is so unfair. About 60 House Democrats and 160 Republicans voted for the bill. Obama also pushed hard to have the bill passed. According to a Zero Hedge article the legislation that rolled back provisions of the Frank Dodd Act was written word for word by Citibank. This tells me that both Republicans and Democrats have been bought out by the banksters. Obama also signed the NDAA which allows the government to detain Americans without due process.

    It is depressing to realize that Obama is not about helping the middle class. QE has enriched the elite and not the middle class. Wealth inequality continues to become more pervasive on a global scale each passing year. The system in place is not sustainable long term. Ponzi Schemes eventually come to an end with catastrophic consequences. The first time I saw Obama’s state of the union address I applauded it. I replayed this SOTU address again and realized it was filled with lies and omissions.

    I am going to resign from my internship position. The reason is I can no longer in good faith manipulated data intended to deceive the general public.

    • VegasBob

      Be true to yourself, and never apologize for it.

      Both Republicans and Democrats are on Wall Street’s payroll. While there are differences between the parties on hot button social issues, these differences are used primarily to distract the citizenry from the way Wall Street is strip-mining this country of what little wealth remains in the hands of ordinary people.

      I woke up to the fact that Obama was a fraud when he re-appointed Ben Bernanke to the Federal Reserve in 2009. So I voted 3rd party in 2012 for the first time.

      Voting for the lesser of 2 evils is still voting for evil.

      • XSANDIEGOCA

        Very well stated.

      • nekksys

        “For when thou art true to thine ownself, to no man canst thou be false.” – William Shakespeare, Hamlet

        At least I think it was Hamlet… Please do correct me if I am wrong.

      • liberalsAREeffeminateSCUMBAGS

        not voting for the lesser of 2 evils is a vote for the more evil

        • silverpanda

          LOL…love the handle!!

      • Richard T.

        In reality, the two parties’ leadership do not differ much on the social issues at all. The Republican leadership pretended to be moral conservatives, but in reality did nothing to roll back on any of the moral “advances” made by the progressives when they are in power. The social issues are not distractions. They are part of the whole scheme for the domination of the world. The social issues are just as valid as the economic issues.

    • Cypher

      Welcome outside of the matrix. This political theater has been going on for decades. American presidents are simply facades to throw stones at when things go wrong. Goldman Sachs owns the world. Go against them and the end result is a gun shot from the grassy knoll.

      • jhowell882

        but at the same time it will take that gunshot for we the people to get the whole thing back to right. hate to say that but it will take pitchforks and torches as elections are manipulated and corrupt anymore. 2nd note is do you think the other guy is honest and will do what’s right. if you do i have a bridge in the dessert to sell you

        • Bob Anderson

          Hyper- inflation is baked into the dollar cake…. Do not miss this blog if you want the REAL gold story…. Google this… fofoa blogspot….. One more thing… Look at my profile (click on my name).

      • XSANDIEGOCA

        See the American Dream on Youtube by George Carlin. Three minutes. Profane but profound.

      • Mike Smithy

        The “Red Pill” is bitter, but it’s good medicine and everyone will soon have a dose whether they like it or not. It’s sort of like that old saying, “One can ignore reality, but one can’t ignore the consequences of reality”.

        • CharlesH

          Ayn Rand

      • Liberty First

        It is indeed a matrix. Take the red pill or the blue one. And choose wisely.

    • Genada

      You shouldn’t resign. If you have a chance to get in on the fraud, you may well want to take it. Getting into government is the best form of work for many and the best opportunity for many.

      Would it be immoral? Up to a point maybe but in the end it’s like the old soviet joke: “They pretend to pay me so I pretend to work.”

      That’s the best one can hope for in a immoral system as we have today, to do the best one can for themselves and family while not hurting anyone else.

    • jsmith

      I’m amazed at your 180. It’s almost like night and day. Hmmm, I’m still skeptical Janef.

      • K2

        If she says something pro-democrat you are skeptical if she says something anit-democrat, you are skeptical.

        • Francois

          He’s talking about trolls

      • jane4

        jsmith
        I wrote a lot of material that I am not proud of. Please accept my apologies. My arrogance, bias toward the Democratic party blinded me from the truth. I also apologize to everyone else I offended.

        • jsmith

          So who gave you the assignment? AIPAC, Washington Post, NY Times? I don’t think anybody here was offended, just perplexed.

          • Bill

            Good question. And is janef now jane4? This could be an incredible story if everything checks out, especially the employer.

    • victor

      Thanks for being honest, and most of all to Yourself in really finding out the truth.
      It’s sad how our politicians have become nothing more than self serving puppets, both parties. Like Judas, some for the silver (money) will betray their fellow man. Like Judas, in the end it will be to their demise.
      They might even get over on the people all their life time, and not think twice about what they did, but one day when they face our Creator it will not go unnoticed or unaccounted for.
      Welcome back to the real world.
      Wish You well.

    • guest

      In the 1950’s there was one of those science fiction b movies starring a then unknown Steve McQueen. It was called “the Blob”. It arrived on a meteor as a tiny, unintelligent organism that looked like jello and had a voracious appetite. As it slinked along it devoured and consumed everything in it’s path and just kept getting bigger and bigger. If you cut it in half it just became two blobs. It had no ideology. It’s only purpose was to consume and grow and survive. Eventually they figured out a way to freeze it then dumped it in the Antarctic where it would stay frozen for thousands of years giving them time to figure out how to get rid of it. I concluded years later that the blob must have been a metaphor for our government. Jane, you just discovered …THE BLOB!

      • XSANDIEGOCA

        That movie was a great favorite! Prescient it was…

      • jsmith

        Could be, although there was a Star Trek second generation episode where a foreign body entered Federation upper leadership through the mouth that Captain Picard thwarted with the help of number one. The implication today is that our government has been taken over by neocon banking elite with the intent of making us serfs and a 1984 society.
        Is resistance futile?

        • T.

          Bingo ! Bingo ! Bingo !
          “The implication today is that our Government has been taken over (Captured – My word) by neocon banking elite with the intent of making us serfs and a 1984 society.” Excellent understanding of the situation we are ALL in here in the U.S.

        • Power is not real but only perceived. When the people decide they have had enough – heads will roll (literally) but in the meantime there is little we can do.

    • XSANDIEGOCA

      For I was blind and now I see…

      Welcome back!

    • Paul

      Jane,

      I probably would not resign. Perhaps you could change a few
      minds at the place you work at. Even if you change the mind of just one person it is a step in the right direction for America.

      Also, you might want to visit liberal sites and post the
      ideas you learned on here.

    • Paul

      Also wanted to add, your drastic change in
      attitude has made me a little more optimistic that positive change can indeed happen in America. TPTB assume Americans are dumb. I understand that millions of Americans are apathetic and have no idea how dire America’s financial situation still is. However, it is good to see that more Americans distrust the mainstream media.

    • Diamond_Jim

      This is all great info. You should post it at salon and huffpo, because you’re preaching to the choir. Oh, and thanks for the Obama care…

      • retired22

        They would delete the comments as fast as they were posted!

    • Molon Labe Girl

      If what Obama espouses was, even partially, the truth, and if he actually followed through on what he says, I’d be the biggest Obama supporter ever. Unfortunately, it’s the polar opposite.

      When the rubber meets the road, all we have is Freedom. When ANY person takes actions to reduce, defray, infringe, impede, or otherwise restrict our freedom, they become the enemy. There is no Dem vs. Repub, black vs. white, gay vs. straight, male vs. female, when you look at your life through this lens. A person is either FOR freedom, or against it.

      THAT is the dividing line we should care about, and the ONLY standard I use when forming an opinion of any person, least of all a politician.

      Welcome to the truth, Jane. Saddle up.

    • Malcolm Reynolds

      My work assignment… I was given a list of

      Who do you work for? Who told you to do these things?
      Good for you for waking up.

    • advok_8

      Welcome to the show!
      Better late than never – we’re happy to have you.
      Hope it’s not too late . . .

    • NoMeansNo

      Wow. You had to prostitute yourself for Obama and they didn’t even have to pay you because you were a mere Intern. What a drag, eh?

    • AzDi

      Well, now I hope you go and spread the word that republicans ( conservatives ) and many other have been trying to get people to hear. I thought it was just because democrats seem to not have any ideas or beliefs of their own. They just are talking point robots for Obama.

      If anyone has a brain at all, it seems pretty easy to see the differences in policy between parties, and what works and what doesn’t. However, that being said, even the republicans have gotten more corrupt over the years. However, I vote and support only real conservatives. Only way to get back to the constitution is to make some big changes, and no one has the guts to do it.

      • 35wormhole

        they just want to fundementally transform america

      • Gay Veteran

        democrats=repubicans

    • Great to see that someone has come outside of the Matrix that the Democrats and Republicans have both constructed to mentally enslave us to the rich and powerful. Most honest, ordinary Americans spend the majority of their waking hours serving the big corporations, shackling themselves with usury in order to realize the “American Dream” of suburban homes, 2 automobiles, and ample consumer goods. Supporting this banker-dominated system, in which the people have ceded control over currency to banks, in which the people don’t own the companies for which they labor, has been seen as a positive virtue by our society. One person seeing the light, that Obama and the Republicans alike are merely trying to continue this charade, is one less tool in the arsenal of the controllers.

    • Aaron

      Don’t quit! You are now an insider. Try to show others around you the lies, deceit, and corruption. You can try to make up for any damages you caused. Don’t just walk away.

    • Catman

      What an amazing example of transparency. Thank you for your courage. May you have many opportunities to use what you know and have learned to help others recognize what is true, false, and what may be coming down the road. Your most fruitful/productive work is most likely ahead of you!

    • rsaint

      janef , welcome aboard…….too bad so much damage has been done.

    • rob

      I know all of these comments were posted a couple of years ago, as I just stumbled upon this site and read most of the past comments recently…
      I’m curious as to how everyone or anyone feels or thinks now about whats going to happen in the near future? As the new POTUS is about to be elected, does anyone think, under Trump or Hiliary will everything collapse or is the USA screwed either way?
      I strongly agree that the whole economy is doomed and yet another bubble, very huuuge, is about to burst! Lead by the big banks thanks to how the way the politicians strings are always played, guided/directed by the corrupt banks etc…
      Thanks RW

  • Rukander

    “If it means I can buy more cheap foreign goods, it IS good news.”
    The world working for nothing.

    • SunnyFlaSnotress

      It means your poor Mexican immigrants can get better deals at the Dollar Stores and the US can afford welfares longer. Isn’t that a great thing?

  • rat28

    The strong US dollar is another understanding job by Obama in making the US economy more powerful.. It seems like Obama has reverted the US to its rightful place as the sole superpower in the world

    • Mike

      Haha! Here we go.

      • retired22

        A strong US Dollar is just a transient deal in an unraveling Global Economy.The downward spiral of the Global Economy is the real thing,a strong dollar is just a phase we are going through!

    • alan

      Stockholm syndrome.

    • Molon Labe Girl

      References?

      Thought not.

  • Genada

    This is the market attempting to blackmail the Fed to not raise rates. It’s taper tantrum 2.0.

    The dollar is going up because every other country seems to be trying to destroy their own currency at this point. We maybe at zero but we have quit qe for now. So the dollar should be going up against those that are printing.

    At some point of course this all goes bad because it’s all built on fraud and lies. Debts that can never be paid and bets that can not be payed out. It all ends in default at some point, it’s just a matter of when. It could go on for a good long while or it could end soon but end it will.

    Debt that can not be paid will not be paid, it’s really as simple as that.

  • Wally

    The globablists are in full swing and they are setting the stage for war and financial collapse. Things are getting scarier by the day and the day is fast approaching that we will all be fighting for our very lives. God help us all…

  • alan

    I think a lot of this is crooks trying to trade on inside information they are creating with BS.
    The stawk market doesn’t mean anything anymore, so I don’t pay attention to it, its just background noise from CNBC.
    I think if there was to be any sudden economic crisis it will come out of a foreign country, not the US.

  • XSANDIEGOCA

    The downside of Globalism has arrived.

  • Mark Sivad

    If the price of oil falling didn’t crash the derivatives market, why would this currency issue?

    • John

      agree. every new “issue” is supposed to crash the derivitive market….now oil’s big drop is just the norm. so now we move to dollar value problems?
      dollar value will non issue soon
      and then some new superbug will be called upon to take down the deritative market.

    • Jimbo

      Oil is having a massive impact on markets. I’m not sure why you think it isn’t?

    • retired22

      What makes you think that the derivatives market isn’t moving to the edge of the cliff this very moment?

  • rentslave

    The collapse will be caused by the OMB-Obama’s Muslim Brotherhood.

    • Islam condemns usury, the heart of the system that oppresses us. No “Muslim Brotherhood” will be directly part of our undoing, but Obama and the oppressive Middle East regimes he sponsors sure will be.

  • Horiboyable .

    “Well, Doctor, what have we got—a Republic or a Monarchy?”

    “A Republic,
    if you can keep it.”

  • nemesis speed

    Explain to me why the americans can print trillions in new money yet their dollars gets stronger but when the Europeans do likewise their currency collaspses???

    • Black

      Is this a trick question? Obviously, we’re special.

    • Jimbo

      Because the USD is held in reserve by many countries and businesses to enable trade. This lessens the short term impact of QE on the value of the USD. But do note, that since QE ended, the USD has only gone one way, and that is upwards.

    • retired22

      The U.S. Dollar is still the worlds Reserve Currency,..that’s why! If Obama keeps favoring Iran over the Arabs the Saudis & their allies may leave the Petro-Dollar system.With no Petro Dollar system we may see the end of the Dollar As the worlds Reserve Currency!

  • JailBanksters

    But the US Imports a lot more than it exports, except exports is the only real honest way of increasing GDP. If all the other currencies collapse, then the last Central Bank wins, meaning the corrupt, insidious Club FED will continue to print money their own money so they can go shopping for more stuff.

    • what what

      “except exports is the only real honest way of increasing GDP”

      ??

  • DJohn1

    You just wrote about the New World Currency from China.
    I remember a different China.
    I remember in 1965 going on vacation with little money in Hong Kong with a group of other airmen. We were all stationed in South Korea at the time. This was one of those bonuses given for remote duty assignments.
    Every day we woke up the Hong Kong dollar rapidly changed direction going up or down. It actually became somewhat of a joke. To deal in Hong Kong dollars was to gamble that it would not fall too far in the next couple of days.
    Well, that is what the U.S. Dollar is dealing with here. We are the new Hong Kong dollar.
    At risk is the financial stability of the retail markets everywhere.
    If I buy bubble bath one day at $3.50 a bottle at Walmart, and the currency goes down, then the price the next day might be $5 a bottle instead of what it was yesterday.
    The exception is the Bubble Bath that is not imported into the country. Nothing has changed. It is the same Bubble Bath.
    The Bubble Bath example is because we are on a huge bubble right now, as Mike has pointed out. So what happens when the bubble bursts?
    I suggest that the bar code on products makes it easy to float the retail value of every product in the store by simply changing a number controlling the cash registers all over the building.
    The catch is you cannot put a price on the product itself anywhere. Notice that is happening all over the retail market right now. The price is on the shelf, not the product.
    As Loretta once sang, Actresses go all the way to France to get their hair done. While we are changing diapers and stopping kids from fighting.
    The reality is most people are not involved in derivatives directly. So they really do not care what happens to the major banks.
    As long as it does not directly effect them . . .
    The reality is that it does effect everyone, everywhere on the planet. But the price of bread, eggs, and milk go up or down on a whim.
    The school system is supposed supported by Real Estate taxes. That is common. What the average person does not really connect is that so is the rent on the apartment they lease from a landlord effected the same way. The landlord passes on the taxes in the form of the rent. So they go through a lease increase every year in the price of renting a place to live and never connect that with the taxes paid by others.
    I used to own a small dog. It was a basenji. To correct that dog for a major wrong like peeing on the carpet one had to take a newspaper and swat the dog. Then you throw down the newspaper so that the dog thinks it has to take its revenge on the newspaper, not the handler. The dog will then tear the rolled newspaper up.
    We are a nation of basenji dogs. (Excuse the spelling, I know it has to be wrong.)
    And when the fall in currency value does come, only when the price of everything in sight goes out the window will people attack the rolled newspaper. Which is what the banks and the people behind them all want to happen.
    It would make more sense to close the banks and examine why the bank handlers are gambling like there is no tomorrow with everyone’s money.
    The banks do not gamble with their money directly. For every dollar in the bank, the FED gives them a dollar to invest. At no point, does the customer of the bank feel like his money is in jeopardy.
    A home valued at 40,000 worth of mortgage returns to the bank in the form of principal and interest a total of over 120,000 over the length of the loan.
    Under normal circumstances, the rules themselves keep a bank solvent most of the time. So that this is happening, someone is a riverboat gambler and that is what has to stop.

    • Spot-on analysis. People will naturally attack government which is only an instrumentality by which the corporations, banks, military-industrial complex, and politicians can extract mountains of wealth from the people. Until we recognize that it is not government itself, but its controllers, that cause the problem, we will never be free.

      • Brenda

        THE ELITE’S OF THE WORLD, LIKE HENRY KISSINGER, THE BUSHES, THE CLINTON’S, JOHN KERRY, SARAH PALIN, OBAMA, ETC. CONTROL EVERYONE ELSE AND WANT THE NEW WORLD ORDER!!

      • Kapricorn4

        Yes, the government’s government control almost everything. Google “Frederick Soddy on the Role of Money”, who wrote about this a hundred years ago.

  • Jimbo

    The Euro is now trading at $1.0574 and is spiraling down at an alarming pace. With the bond markets now in uncharted territory and everyone calling bubble in the stock markets, where do you go now?

  • Doomy Guy

    DOOOOOMMMMM!!!!

  • Bill

    This is a timely article considering the acceleration of the $ index and the ” de-acceleration” of the EUR/USD this PM. Very strong movement suggest the canary is feeling very pale.

  • Richard O. Mann

    Boom, boom, out go the lights.

  • robbie41

    Don’t forget about the new bank bail-in rules.. Keep your money out of the bank’s..

    I believe a great shaking is going to come to this land, (Our Country) and to the world that will involve the collapsing of the American financial or economic relms. … and the removal of its blessings and prosperity.

    If you remember the Mystery of the Shemitah by New York Times best-selling author Rabbi Jonathan Cahn, has stated. The last day of the Shemitah, Elul 29, Sept 13, 2015 is considered the “wipeout day” when all debts & credit were “wiped clean.” So I’m just looking at this as a caution, to keep your money out of the bank’s, & please start to Stock-up on Food, Water, & Medical supplies, for a minimum of 4 months time.. I wish the best of luck for everyone..If you are prepared, you shall not fear..

  • 2Gary2

    This is a direct result of Republican and right-wing strategies over the
    last three decades: transferring wealth to the top five and one
    percent, demonizing the poor and immigrants we couldn’t live without,
    promoting hatred between groups: gay and straight, immigrant and native,
    men and women, rural and urban, religious & secular, abortion…..
    when the real obvious battle for America’s soul is between the people
    with some sense of fairness & equality AND the top 1 percent, who
    aren’t happy with 40% of the wealth or 50% …… they want
    EVERYTHING!!!! And the Republicans want to give it to them, because
    they are they’re only real constituency

    • As a socialist, I don’t see how the Dumbocrats will help us out. On all important points – money creation as credit by private banks, shareholder ownership of large enterprises, the military-industrial complex and the empire that supports it – Dems and Reps are in agreement. I have more in common with Libertarians than with the corrupt, self-serving Democratic and Republican parties.

  • Rufus T Firefly

    Euros are declining? Won’t someone help poor Gisele Bundchen? Back in August 2007 she demanded Procter & Gamble pay herin Euros because they supposedly had a better future than dollars. We need a Supermodel Bailout Fund to keep Mrs Tom Brady in the lifestyle she deserves!

  • This article takes a very interesting angle on the currency valuation changes. It’s insightful, Thanks

  • “The Europeans are attempting to cure their economic problems by creating tremendous amounts of new money. It is the European version of quantitative easing, but it is having some very nasty side effects.”

    It’s private banks creating money, at interest, that is causing the problem. Europe is already weighed down severely with debt repayment and the only way out under the current system is to borrow more from the private bankers who already extract interest from the people. Why don’t the people of the EU demand that their Union create a sovereign currency which benefits trade and not rent?

    Otherwise I agree with what you are saying. The US is caught between a rock and a hard place – the stock market bubble needs to be popped – but the only tools that exist for doing it, namely raising interbank interest rates, would only cause a further increase in the value of the dollar which would be damaging for the real economy.

    Best-case scenario is that we end up like Japan with interest on public and private debt eating us alive even more than it already is; this buys time for us to switch to a sovereign money system without massive civil unrest. We could then peacefully dismantle the empire and allow democracy to bloodlessly come to dictatorships we control, establishing mutually beneficial trade relations. However the current system is too profitable for the banks and corporations to change it, and places too much power in hands in the people for their comfort.

    Worst-case scenario: the rise in rates causes a pointed rise in the value of the US dollar but a catastrophic decline in the value of capital markets. As currency derivatives and dollar-denominated debt become unrepayable the dollar becomes a whipsaw, with an underlying rise due to foreign demand tempered by periodic meltdowns in foreign dollar debt and derivatives.

    In order to cover the increased exchange rate risk interest rates on dollar debt taken out by productive industries will rise, causing high rates of inflation even as the dollar rises (the Fed’s rate rise will also cause inflation in the real economy after some time as we the people eventually pay the borrowing costs of corporations and banks).

    The empire will explode, our trading partners will be ruined, and bankers, corporate leaders, and politicians will no doubt beat the war drums as a means of profiting out of the situation.

  • GSOB

    For God, who said, “Let light shine out of darkness,” made His light shine in our hearts to give us the light of the knowledge of God’s glory displayed in the face of Christ.

    But by His doing you are in Christ Jesus, who became to us wisdom from God, and righteousness and sanctification, and redemption, ….

    Now the Lord is the Spirit, and where the Spirit of the Lord is, there is liberty. But we all, with unveiled face, beholding as in a mirror the glory of the Lord, are being transformed into the same image from glory to glory, just as from the Lord, the Spirit.

    I believe this and because of that, the other remains only until it doesn’t suit His purposes any longer.

  • Brenda

    Yes, there is corruption on both sides of the fence!! Don’t vote
    for any member of the illuminati’s!! These elite people want the
    new world order and the micro-chip(666), so they can control the world like puppets. Our Heavenly Father tells us NOT to take the micro-chip (666), the new world order system, which is the mark of the beast. Should one take it, they will spend eternity in hell !! If you want to know who the illuminati’s are, just google illuminati’s. And scroll down to the bottom of the page to find the politicians. The rappers and celebrities are at the top of the page. The Bushes, The Clinton’s, John Kerry, Sarah Palin, Pastor Billy Graham, are illuminati’s! Go look for yourself!

  • Alexander Ač

    “Anyone that cannot see trouble on the horizon at this point is being willingly blind.” – Too optimistic statement. People don’t care and have no capacity to understand. Even those more intelligent.

    Alex

  • Daystrom2012

    James 5:1-6
    “Come now, you rich, weep and howl for the miseries that are coming upon you. Your riches have rotted and your garments are moth-eaten. Your gold and silver have corroded, and their corrosion will be evidence against you and will eat your flesh like fire. You have laid up treasure in the last days.

    Behold, the wages of the laborers who mowed your fields, which you kept back by fraud, are crying out against you, and the cries of the harvesters have reached the ears of the Lord of hosts. You have lived on the earth in luxury and in self-indulgence. You have
    fattened your hearts in a day of slaughter. You have condemned and murdered the righteous person. He does not resist you.”

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