The entire world financial markets are a Ponzi scheme. What is so difficult for people to understand this? The Fed will ALWAYS inject liquidity into the markets and cause its own panics and booms. Everything in the financial markets are orchestrated by government, to Wall Street, to Media, to Main Street. You dont need a degree from Harvard to know this.
Excellent post. There is "no real money" is Stock markets, Real estate, Oil, Gold. The value of these investments and commodities increase or decrease everyday because of demand and supply. Big Players manipulate the price as per their wish and command. I had a discussion with a "Big player" and he said to me "We are the ones who move the markets".
Could it be that the root of the problem is that there are virtually no qualifications for being able to vote? or to hold office? Stosh
Indeed. Thanks for providing historical context. I agree 100%. Without reserve status, massive US deficits would not have been possible. A large part of our reserve status was based on productive capacity. Everyone in the world needed American Cars, American appliances, American computers. Hence the continual demand for American dollars and evolution into reserve status. There is some real cred behind the no production = no reserve argument. Another reason - Oil priced in dollars meant America got to print the total dollar amount of oil used DAILY, everyday, and spend it into circulation....on the worlds tab!! Its actually quite ingenious that America brokered oil sales in USD after WW2?! If you consider a currency backed by a static money supply, its exchange rate goes up as countries sell their currency to buy Dollars (for oil). There's no residual value in oil once its used, hence its analogous to a foreign country buying dollars then burning them. This puts unending upward pressure on the currency......unless a Country prints the equivalent daily demand amount - and spends it - thus keeping exchange rates in equilibrium... This is what the US did. Oil consumption is roughly 85 Million Barrels a day x 50 USD, per barrel average = 4 Billion a day in non-inflationary slush ready to tap for anything. Oil in USD goes a long way to explain the US presence in the middle east. Maybe its not so much about the Oil, but rather the 120 Billion a month in free cash the US gets out of it! That's a lot of Iraq Wars!! Explains the Saber Rattling against Russia, Venezuela, Iraq, Iran etc. All plan or have already abandoned Dollar-based pricing in favor of their national currency. They finally caught on.
This "Big Player" is from Saudi Arabia. He has business contacts with Prince of Saudi Arabia. Now everybody must have understood what actually goes on in the "world investment markets".
http://www.nytimes.com/2008/12/17/opinion/17friedman.html?em The US is full of ponzi schemes.... Some are "legal".... Some "are not" legal..... The damages caused by the "illegal" Madoff ponzi scheme.... Are dwarfed by the size of the damages caused by the "legal" ponzi schemes...... ................................................................................... The US needs to file one "grand bankruptcy" .... Learn from the mistakes.... And form a better overall structure....ie 10% consumption tax only....etc... At the moment ....the US is like one big GM....too many legacy costs, previous mistakes, etc...legal largesse baggage..... ............................................................................... And one can believe this.....even with all of the current financial issues....the true banana republics really are much worse..... Believe it or not......remember there are a lot of countries who still cannot provide reliable electricity or water ....and are much older than the US.......