Fiat currency wars against hard assets. Global central banks keep printing and want you to accept paper as if its backed by hard assets. Ultimately it is, everything is priced. With massive money supply increases globally. Hyperinflation is in the cards. Why are currency rates within relatively narrow bands? Because everyone is printing. With printing comes the need to convert that paper into hard assets quickly. The velocity of conversion will create asset bubbles in various asset classes. The dollar is holding up well because counter party central banks are in the same demise. With money supply increases, the central banks are stealing money from masses. As money supply increases it forces you to hold less of it. If you hold cash, you loose value. ---The velocity of money will keep increasing. Interest rates will rise. The central banks control the short end, the long end indirectly or directly through QE. As QE tapers long end gets out of whack quickly. The yield curve will steepen. 1) central banks print 2) money supply increases 3) velocity of money increases 4) short end interest rates held low fixed 5) long end held low fixed with QE 6) hints of QE taper, long end snaps up. 7) long bond yields jump up to 15%. The question becomes when will they decide to break the system. And why would they even need to. Austerity will be forced on the USA. The system breaks when counter parties wont accept the dollar for trade or will demand multiples of the amount to buffer against dilution of value. If asians refuse to buy US debt, the FED steps in and buys unlimited quantities of it. Yields can be drifted higher and higher till the wealth held overseas gets decimated. You effectively destabilize your counter party's books. Holding hard assets is the best scenario to protect against dilution of paper wealth.
Don't worry! China soon will pay a huge lump sum as well as yearly fees for long term leasing of some ports in the US/ EU as free trade zones. http://en.wikipedia.org/wiki/Free_trade_zone http://en.wikipedia.org/wiki/List_of_free_ports http://www.scmp.com/business/china-...ernational-law-could-be-used-free-trade-zones https://webcache.googleusercontent....firefox-a&gfe_rd=ctrl&gws_rd=cr&hl=en&ct=clnk http://en.wikipedia.org/wiki/United_States_Virgin_Islands Problem resolved!
The SHTF scenario will just have to happen at some point? Are we really sure about that? Politicians and bankers could get together and do something tricky maybe? I don't think they will get together and do something incredibly intelligent, tricky maybe... What if the rest of the world is relieved when the US melts down? They won't have to prop it up anymore, they could go into a multi-decades boom and laugh at the US while they are at it. They should hasten it actually, like tearing off a bandage and getting it over with rather than carefully removing it.
If a company or person goes bust then their assets are sold off to pay their debts. So why not a country ? The politicians responsible for the mess should be tried in a court. I know that will get the Nationalists and the patriotic lot in a lather of rage but I am only stating the obvious. Some people should try and accept that countries just can't keep on printing more money to escape their responsibilities.
awesome bikes Spec, gonna try out the Ducati this spring, sort of just got turned on by them, always was a cruiser guy. just reading the tech notes made my heart beat a little faster.
China or any other country pays only as far as US holds the power or as long as the dollar remains strong and once even the cues of declining dollar strength due to decline in trade margin and also blowing of asset bubble, US is gone.