[The Beast1]

(01-24-2016 04:16 PM)Teutatis Wrote:  

(01-24-2016 12:22 PM)samsamsam Wrote:  

(01-24-2016 04:54 AM)Teutatis Wrote:  

(01-24-2016 02:24 AM)NASA Test Pilot Wrote:  

I am not sure if people want to go geo-political in this thread so I will stop.

Please do.

I'd like to hear more also and geopolitics does influence the dollar. Thanks.

Oops, I just realized it sounded like I was asking him to stop when in reality I meant for him keep talking about geopolitics and economics, I also would like to hear more, just wanted to clear that up.

Nasa's just being modest to all of us.

NTP, don't be hesitant to share your thoughts, ideas, and perspectives! What you said to me over PM was pretty solid enough that i'm willing to repost it here. Most of my own posts are half baked and not nearly the same calibre as yours!

[thoughtgypsy]

(01-24-2016 05:35 AM)Krieg Wrote:  

(01-24-2016 05:25 AM)The Beast1 Wrote:  

I have a small theory that the US may try to dip out of its treasury obligations by goading Russia and China into some type of war. They can then go and cancel the notes China and Russia hold erasing the debt off of the books.

I think this is how WW3 will start.

Isn't it easier to renounce a default rather then engaging in a potentially suicidal war with nuclear powers?

I think you are making a mistake in thinking the elite care about what happens to their subjects. NASA Test Pilot beat me to it, but I wanted to add a few points. The elite are sociopaths, they hold no concern for the common man or what will happen to them as a result of their actions. If 50 million people die but the elite remain safe, why do they care? If anything, it is a chance for them to seize the assets of soldiers who were killed, or to sieze property under emergency powers.

Their concern goes only so far as to what extent they can enrich themselves off of us. Generally, larger populations mean more tax revenue, more warm bodies to buy the commodities they control, and more pawns to be expended in war time.

The world is under the same conditions we were before WWI and WWII. The debts that have been built up in the system are beyond fixing, and the financial day of reckoning must come soon. The millions of people who have worked hard all of their lives will see their wealth vanish through inflation and restructuring. The political class is being revealed as traitors, and populist fervor has resulted in the rise of politicians like Bernie Sanders and Donald Trump. The anger of the populace is tangible, and the elites feel threatened by it.

Most US debt obligations are held internally. In a scenario where sovereign debt repayments are impossible and the debt must be wiped clean, a lot of Americans will lose out. Millions of people who've paid into Social Security and Medicare their whole lives will be told they've been fleeced. The anger will grow, and the elites' necks will be on the line. The elites will be fearing a french revolution scenario, and look to channel the populist anger elsewhere.

That is what makes The Beast1's predictions seem likely. To channel the anger off themselves, they will blame other countries as being the cause for our problems. History is replete with examples. There is already an extensive information campaign attempting to paint Russia and China, really any country outside the western sphere of influence as evil. Russia, being anti-homosexuality and anti-leftism, is a natural ally of American conservatives. But Neoconservative media has successfully played on the jingoistic bent of paleoconservatives and turned them against Russia. No open discussion of the post Soviet era agreement not expand NATO eastward, or a release of the Malaysian Airlines MH17 black box will be permitted.

There is already an information war going on. There is already a cyber war going on. We are already in it, but we can't see the forest from the trees.

[NASA Test Pilot]

I am not a banker, bond trader, nor professional in the market. I was a student of warfare and a practitioner of warfare. All warfare has an economic basis and all warfare is based on deception.

A bond is a loan, it is an IOU. Literally it is something that binds. When money is loaned to a government or a company they commit to paying you back at a date in the future. In the meantime, they pay you interest (in the form of a ‘coupon’) on the loan. The interest rate (‘yield’) you desire will depend on a few things. It will depend on how much risk is there that they will not pay you back. If you believe the risk is smaller, you will more likely accept a lower yield. If you believe the risk is higher, you will ask for a higher yield. Secondly, how much yield do you need to make a ‘real’ (after-inflation) return?

Bonds are important because the bond market ultimately dictates the cost of borrowing in the economy. If an investor is expecting inflation to be low (or negative), the investor will normally accept lower yields on the bonds and they are willing pay more for them. If inflation is expected to rise or be higher, the investor will want higher yields and they will want to pay less for bonds.

Treasury bonds in general, refer to 3 specific sub categories depending on the maturity. Treasury Bills are less than one year, Treasury Notes are greater than one year, Treasury Bonds are 10 years and greater.

Governments issue bonds to fund their spending and their debts. Currency is created when the Department of the Treasury (DOT) creates a bond and gives it to the Federal Reserve (Fed). The Fed accepts the bond and in return creates an account and provides the currency (Federal Reserve Note or FRN) to the DOT account. The Fed also may create accounts for other customers as well.

To increase the currency supply, the Fed moves currency from bonds into cash. To decrease the currency supply, the Fed moves money from cash to bonds. The details are complex, but the basic idea is that each day, the Fed buys (or sells) billions of dollars in U.S. Treasury bonds from (or to) certain financial companies who act as dealers. Where does the Fed get this money? They just make it up.

The Fed purchases not only Treasuries but also other securities and debt instruments, SPV (Special Purpose Vehicles) are off balance-sheet trusts that issue short-term securities collateralized by loans or other receivables, a popular form of credit derivative is the credit default swap (CDS) it is a contractual agreement to transfer the default risk of one or more reference entities from one party to the other. IRS (Interest Rate Swaps) Interest rate swaps are similar to credit default swaps because their value similarly depends on a reference variable, in this case, interest rates. CDS´s and IRS´s are examples of over the counter market derivatives.

A derivative is simply an agreement transferring risk from one party to another; its value is dependent on an underlying price, rate, index, or financial instrument. The agreement (which is given value) is derived from the something else (considered to have value). A credit derivative is an agreement designed explicitly to shift credit risk between parties; its value is derived from the credit performance of one or more corporations, sovereign entities, or other debt issuers.

Other debt instruments include, CDO´s (Collateralized Debt Obligations) which is a financial instrument that entitles the purchaser to cash flows from a portfolio of fixed income (debt) assets, which may include bonds, loans, mortgage-backed securities, or other CDOs. A CDO is a type of Asset Backed Security (ABS). Another is the MBS (Mortgage Backed Securities) which is a tradable security that represent claims on the cash flows from underlying mortgage loans. An MBS investor owns an interest in a pool of mortgages, which serve as the source of cash flow for the security. These securities are a type of ABS.

The list of these instruments will continue to grow in the future.

Why does the bond auction not fail causing a solvency crisis? The bond auctions never fail because there are always buyers present. The auctions are oversubscribed and designed not to fail. The primary dealers are required to bid but that is never a problem as they act as intermediaries to sell the bonds to various clients. If the primary dealers cannot sell their inventories the Fed can step in and soak up the demand.

The Fed has been doing this and their balance sheet is increasing. The Fed can technically do this to infinity. As infinity is approached confidence is declining and a greater risk premium is desired. If a sufficient risk premium is not provided, investors exit. That is what is happening with nations now. They are selling their hoard of US Treasuries that have been accumulated. The Fed continues to purchase them. What if the Fed purchases all of them (hypothetically) from every country? Nothing, right up to the point where that sovereign country says, I no longer want your US Treasuries for my goods and services. Instead I want X. If the US does not have X, it will either do without the goods and services (shortages) or it will domestically produce them. Otherwise it will go obtain X and trade it with the other party (nation).

I suggest that under the guise of the AIIB and NDB such as system has been initialized and it is independent of the SWIFT financial system. X will be something like a gold back trade note. Not a currency or gold standard system. If you want one of these notes, transfer something (your independently audited gold) to location Y and you will receive the gold trade-notes and you can trade them between the participating countries (entities). The current system could then be circumvented. If the US wants to play, it will need to pay, but not with their current dollar. I suggest that they will then pay with another form of the dollar (to be initially backed by resources still in the ground) that will be created (and devalued) to be used only within the (domestic) US while the international dollar (current dollar) is revalued in comparison to X or on the basis of X.

If the US continues to run a deficit, who will accept the bonds to pay for the extra spending and how will the current debt be repaid? Not the foreign countries, they sold their bonds and now they want X. The Fed can accept the new bonds that the Treasury creates to pay for the deficits and the debt, but the Fed will not pay itself interest. The citizenry will pay the interest through the continuous devaluation of the new (domestic) currency and the people will become more impoverished.

Technically the bond system does not need to default, it is transformed and revalued.

We are getting around this now to maintain the confidence of the bondholders because the US Treasuries do not show up in US Fed accounts and a dichotomy is created. Global USD accounts are dropping and the dollar is getting stronger. If the fundamentals indicate that if the world is bailing on dollars, then the dollar cannot get stronger. Yet, the US dollar is getting stronger on the FOREX, therefore the world cannot be bailing on the dollars (this is the logical fallacy known as affirming the consequent.) The media is not telling the public that these bonds are being redeemed so that the illusion can be propagated.

The drop in the reserves does not support the narrative of a strong dollar. Therefore something has to be done to put reserves back into the system. The manner in which the US Federal Reserve puts it back into the system is through the Reverse Repo´s (repurchases) where they sell short term government securities to the dealers in exchange for cash and therefore reserve accounts are supported. These sales are not congruent with zero interest rates. These sales are congruent with Fed tightening, therefore you have the illusion of tightening to support the sales. It is about supporting a false narrative. The dollar is strong and the world is not abandoning the dollar. My understanding is these sales are over $200 billion per day. So why has a collapse not happened? It is because we are continually lied to and the confidence of people is maintained. The stories continue to change and new financial products (in addition to the ones previously mentioned) are invented to mask what is happening. I would put forth that the collapse is happening now and is a slow burn that is accelerating. Watch for signs in more and more countries, not just Venezuela and Argentina. Friends in Canada and many other countries are becoming concerned as the price of basic goods is increasing at an alarming rate. Canada is not Zimbabwe.

I am suggesting that to disguise the return of foreign treasures, the DOT under the aegis of the Exchange Stabilization Fund (ESF) is soaking up the bonds. Recall that the Fed creates an account and there is a level of transparency. With the ESF there is NO transparency. The bonds are purchased from what I will now term as a ´Dark Pool Account (DPA).´ The DPA is off the books. When the bond enters the DPA it appears as if debt just magically disappears. The problem becomes if all of the debt magically disappears and the US debt goes to zero, the former buyers of the treasuries will realize that the system does not function as they were led to believe and will lose confidence in the dollar. The ESF is operated at the discretion of the Secretary of the Treasury, it follows no laws and is accountable to no one. The original 1934 mandate of the ESF is to defend the value of the US Dollar. The Fed through the Federal Reserve Bank of New York is a front for the ESF.

Normal analysis is not sufficient when the puppet masters are engaging in sleight of hand. I am of the opinion that some of the puppet masters really believe that they can outsmart the market and I think the smartest of them understand that the time of reckoning is coming, they are simply experimenting with the system and will pass on whatever they learn from this manipulation down to the future generations of puppet masters to then be applied well into the future on that unsuspecting generations after you and I are have departed. Furthermore, they will use this opportunity for yet, another (greater) purpose (at least in their deluded minds).

[thoughtgypsy]

NASA Test Pilot, you have such a high level of understanding on these issues, that I was hoping you might be able to shed some light on aspects of the domestic political agenda which always confused me.

The first issue is the rise of the welfare state and development of a permanent dependent underclass. There is no check on reproduction within the welfare class, leading to an exponential growth in current and future deficits. On the one hand, I can understand some motivations for this. This allows the buying of votes in exchange for entitlements. A modern phenomena of bread and circuses. It also undermines the family unit by making the Government replace the Father as the provider of resources. Weaker families are more atomized and much easier to control. Potentially, this underclass can be used against the middle class. In a time of crisis, because they are no longer self sufficient they may be more willing to carry out acts against others in return for food.

But the downsides to attempting this are immense. The cost of perpetuating entitlements is unsustainable, and leaves us in the economic crisis we see today. It undermines the perception of stability in our debt, and will lead us to the economic crisis you described in your last post. That seems like a bad scenario for the movers and shakers at the top, and something that they would do anything to avoid. Is this something you believe they foresaw? If so, is there a reason they proceeded that outweighed the problems I described?

The other issue is the offshoring of manufacturing jobs to other parts of the world. An explanation may be that more permissive environmental laws and lower production costs make it attractive. Manufacturing provided well paying jobs for men that fell lower on the IQ curve, but had good work ethic and wanted to provide for their families. Destroying that industry domestically leads to a large group of shiftless men that gives rise to crime, drugs, and instability within society. The destruction seemed to coincide with the welfare state. More importantly, this makes us dependent on other countries, some of which (China) that are outside of our sphere of influence. Of course, some of the reason may be collusion with moneyed lobbyists chasing profits above all else in return for campaign financing. However, due to the geopolitical implications of such an issue, I would have expected the deep state to exert greater control on this issue.

My guess is that the answer lies with the psychology of sociopaths. The quest for greater control is insatiable and never ending. A stable, healthy society that is largely self sufficient leads to higher social mobility. Eventually, hard working families can begin to rise higher up, achieve success, and threaten competition with the elites in power. De Jouvenel's On Power provides an insight into the reasoning behind introducing an unstable underclass. If social classes can be seen as a pyramid, the easiest way to undermine the layer directly beneath you (middle class and working upper class) is to create an underclass to compete against it. Better for the elites if that underclass is completely dependent on them through welfare.

I think the quest for control has led to unforeseen consequences, and their inability to moderate it has swung the pendulum too far in one direction. But I'm also open to the idea that there are greater designs beyond my awareness. If you're able to share, would you mind providing your thoughts on the above?

[Samseau]

Here's another reason the US dollar is so high:

The ECB is printing mad cash, right after calls were made at the Davos summit. Print that money baby! Free wealth for the rich!

[NASA Test Pilot]

I do not consider myself strong in regard to US domestic issues, particularly since I have only been back a few times in the last decade. I am much stronger with international issues and relational thinking. If you observe socialist countries, class warfare is one of the pillars used by those in power to decrease the power of potential competitors. The question becomes the downside too whom (you, another guy on the street, a politician, captain of industry, banker, puppet master). The perception of stability is maintained (with the masses) because of the economic sleight of hand. Even though there is a raping and pillaging that is occurring, the population accepts certain losses and restrictions (on many levels). As things deteriorate/implode, those pulling the strings and those telling the string pullers what strings to pull and how hard to pull them, are ready (not in a 100% deterministic way, but pretty damn close with the type of war gaming that is possible on supercomputers, and that was 10 years ago, I can only image now). I am of the opinion that an economic meltdown (meltdown is relative form decreased standards of living, to various levels of poverty to MadMax) is the desired outcome and war will be used as a distraction to set up another set of circumstances to be used for yet another purpose.

I would put forth that the offshoring of jobs and the entire chain that you describe is not an accident. It is for a specific purpose, which is for yet another purpose. Think along the lines of the Hegelian dialect, problem-reaction-solution. The solution has already been designed and in waiting to be shown to the target(s). I would look for a re-industrialization of the US. But before you get to excited, I would add that many of the companies will be directly owned by foreign entities and certain trade treaties will influence how these companies are operated rather than only US law. Furthermore, consider that robotics will play a large role as we progress into the 21st century. Generally, the quality of life will be less than the 20th century and this lower standard of living will be accepted as the norm. I would suggest that planning occurs in such depth over such long periods of time that it would be inconceivable to most.

The deep state is controlling the issue and there are those behind the deep state. For those adventurers that want to go down the conspiratorial rat hole; enjoy and learn, but I put forth that the real Alpha competitors will not come on the scene until the probability of risk for them is close to zero. A world-wide economic meltdown or WWIII would only be early precursors to such a time after which they will go after one another for their crown.

When you understand more about the Exchange Stabilization Fund (ESF), you will see that the Federal Reserve is on the front side of the curtain with the lion and the tin-man. The ESF is deep state banking (from intelligence to developing new technologies and beyond).

RPG astutely noted that the war is tribal vs. modern world. It is going to be a death match. This is a continuation of the war on tribal culture in general (whether it be Native, American, Aboriginal, Amazonia, etc.). Tribal cultures naturally do not accept the basic framework of what elite planners have envisioned and therefore, they must be eradicated. There will be more attempts to re-frame the issue using concepts like freedom or democratization to assist in moving the masses along the pre-planned path.

The context is also larger. The death match is more than one tribe (belief, system) against another. It is a war against having tribes or organizations greater than one isolated individual. It is not simply wiping bodies from the face of the earth, but trying to eradicate a way to defend and eventually a base from which to strike those in power (puppet masters or elites in this case). They have engineered yet another win-win for themselves. I want to expand on a potential game changer and I hope that it will generate some discussion (somewhere).

Things like this forum are a part of changing the game (literally and figuratively). Hypothetically, if there are intermediaries between you and the king of the world, the probability for control over you is diminished. The tribe (on so many different levels) can be one such intermediary. Having a close group of friends (3-5) who form what is known as a brick (or cell if you accept the (negatively connoted) word that has been given to us by the linguistic puppet masters) that depend on one another like brothers or family will diminish this control. Being part of more than one brick (like having more than one family) is possible. After this, developing connections between these bricks, as if a wall (or floor) was being built; will provide opportunities to ´exploit openings´ as each generation moves forward. Think of it as inter-generational wealth, but in terms of knowledge, experience, and connections. Without a connection to the past (parents, grandparents, etc.), the tribe becomes vulnerable (to the elite engineering) like a child alone in the wilderness. Some will survive, but most will not.

Thoughtgypsy adroitly recognized that (part of the) answer lies in the psychology of the sociopaths. I recommend caution as you attempt to understand these psychopaths and sociopaths in person. Their heads are filled with such madness and delusions that dealing with the dark triad women is easy by comparison. It ends only with one of you walking away. Practicing a martial art that has a parallel system of mental training can be like having a kevlar helmet in this battle.

As a late edit February 9, 2006, I would add something that I mentioned to another member in a PM, which is, that it is not necessary to touch the darkness in order to understand the darkness.

[roberto]

NTP, outstanding writings. I am making time to read your posts fully and in detail. Sincere thanks.

That's twice I've seen you referencing supercomputers for war gaming- it's an angle I hadn't considered and that also one that makes so much sense. As technology advances and the elites become more and more dependant upon it both for guidance and enactment of their wishes, it's not hard to see how the guidance and enactment could become more automated and linked leading to a Terminator type scenario.

[jayko]

Very thought provoking read, and thanks for the sharing all the ideas here, for those you are interested in the global world order or geopolitical, and world economy, you may wanna check out article or youtube video of the following person.

1. Jim Willie, author of goldenjackass
2. Jim Rickards, author of currency wars
3. Nomi Prins, author of all the president bankers
4. Peter Schiff, founder of Euro Capital and Shiff Gold

for other non MSM, check out people likes Jeff Berwicks, Joel Skousen, Christopher Greene just to name a few here.
the website that I suggest are zerohedge.com and dailyreckoning.com
World Economy is going for a reset, hedge yourself and brace for impact. Guys

[EvanWilson]

Why is the US dollar so high.

Others have mentioned, but mainly as messed up as the USA is, the rest of the world is worse off.

While the USD is rising against most, if not all currencies, it is not because the USA is doing so great, it is because every where else is doing so much worse.

Every central bank on the planet is printing as much money as it can through QE or QE like programs. Here in the US we have done a remarkable job with stuffing 4 or 5 trillion of bonds into the Federal Reserve (bonds that the retail market didn't want or could afford to buy), another 5 trillion in money with Freddie Mac and Fannie Mae, and another trillion each in borrowing with car loans, student loans and credit card debt.

As much as the USA has flooded the world with USD, places in Europe and Asia now have NIRP, negative interest rate policy. That is where you pay the borrower to lend money to them, which the USA has not done yet but looks like it is about to start.

As you can imagine, many people expect to get interest when lending money, not to give it to the borrower, so the USD has looked better since they can still get interest on their money, for the moment.

[911Turbo]

During the commodity bubble of 2000s, US dollar lost its value relative to other currencies. But now the commodity bubble is over and US dollar is regaining its old value. US has the most diversified economy in the world, that's why it is regarded as the safest country to put your money in.

There is no risk of invasion due to geographical reasons, it has the best military by far, coupled with a diversified economy. There is no jihadi threat either, even muslims in US are much better integrated compared to muslims in Europe.

All the companies that made a change in the world in the last 20 years are based in America. Apple, Whatsapp, Tinder, Uber, Tesla,Facebook,Paypal,Ebay , Amazon just to name a few. What are these companies using? Us dollars obviously. Remember in 70s and 80s Japan was the most innovative country in the world, pioneer stereos , Sony trintron TVs, high tech navigation equipment etc. But Japan has been in a fucked state since 1989, when the asset bubble bursted. It has failed to innovate. At one time, some people predicted that Japan would be the biggest economy by 2020. Not that long ago ,land in ginza district was worth more than the state of California.

A lot of things have changed in the last 100 years, but US continues to be the undisputed superpower. Can it change? Of course it will change one day. Nothing lasts forever.

[BIGINJAPAN]

A lot of great things being shared here., especially from NASA.

But the number 1 reason the dollar is going up is not policy divergence from other CB's or even because the US is a perceived safe heaven and is the best dressed pig at the ball.

At some point the FED will reverse course and lower rates and probably launch QE4. But even then the USD will continue to climb.

Believe it or not, there is a USD shortage. It all started with the carry trade. When the FED lowered rates to 0 the rest of the world started to borrow in USD because of the ultra low rates. There was 9 trillion dollars loaned out to countries and companies. But now that the USD started to strengthen the carry trade has blown up and currencies around the world are cratering. Because of that USD denominated debt all around the world is defaulting. And what happens when the you default on debt and cant pay it back? POOF, it disappears. USD's are vanishing all over the globe because companies and countries were paying nothing in interest on the borrowed USD debt, but they were earning money or collecting taxes in local currencies. Once the dollar began to increase it didnt matter that they were paying next to nothing in interest. The depreciation of the local currency far outweighed the ability of the debtors to repay in dollars. All of it is being written off. There is now a global shortage of dollars and that is why im not surprised the treasury market has not collapsed because of china selling off their reserves. I know a good conspiracy by the FED to prop the market up sounds great and make sense but it is just not the case. There is a strong bid for USD debt.

Don't forget everyday billions of people work and have money siphoned off their cheques towards retirement savings and pension plans. Those fund managers need to park that money somewhere and the US debt market is the only market big enough in the world that can accommodate that kind of savings. As crazy as it sounds with the US 18 trillion in debt and issuing more bonds everyday it still isn't enough.

It is just simple supply and demand

[NASA Test Pilot]

Although debt may be written off in a default, the originator of the loan is paying with the capital that they had stored up (saved) and lent out. The originator has lost their capital as it was not returned to them to be productively used in another endeavor. The issue with treasury bonds, in general, is that as more individuals and entities pile in, the yield and the price should change (inversely of course): but when the U.S. Treasury Bonds change by a trillion dollars and the yield stays the same, something is rotten. Two plus two does not equal five and that is what is being said. The details of this rottenness need to be uncovered so that capital can be put to use productively. If this does not happen then people (institutions) will suffer more losses. Losses in the capital markets and bond markets will increase (to the point of failure) which can lead to a lack of confidence in the currency (government) or currencies (governments). If that should occur, depending on the how serious the lack of confidence, most of the (non-physical) capital will suffer a loss directly related to the lack of confidence.

Therefore, as more U.S. Treasury bonds are being issued, the question becomes who is purchasing all of these bonds? The Chinese, for example are buying the 3 month and 6 month U.S. Treasury NOTES, not the Bonds? Of course individuals and institutional investors are plowing in, but not 80+ billion per month. One of the main points I am contending is that the Exchange Stabilization Fund (ESF) is sucking these U.S. Treasury Bonds like a puta with a cock count that is so high that it is almost inconceivable. But no one can confirm that the puta has a cock count because there are no records, so therefore they say she is a virgin, and people confidently bid for her hand.

Another thing to consider is what happens to these bonds (as they mature and/or are rolled over) as the interest rates goes negative. Are individuals and institutions going to loan various governments (including the U.S.) their capital and expect no return or eventually pay the governments to accept their capital? Why not just keep it in the bank? You can pay the bank to hold your money. How about put it under the bed? Great, until further changes are made to make that more difficult and the inflation they say that does not exists erodes the purchasing power of the currency stashed under your bed.

[thoughtgypsy]

The Federal Reserve recently gave out $26 Trillion, much of which was given to foreign banks as illuminated in a 2011 GAO audit. Page 131 shows $16 Trillion in bailout money, and page 205 shows $10 Trillion in direct currency swaps.

http://www.gao.gov/assets/330/321506.pdf




I am sure much goes on behind closed doors at the Fed which we will never know about.