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by Ashraf Laidi
Posted: Feb 22, 2010 5:00
Comments: 2338
Posted: Feb 22, 2010 5:00
Comments: 2338
Forum Topic:
USD
Discuss USD
FEds statutory durty is inflation and unemployment
all wrong.
FED has no interest in economy and unemployment. FED's biz is to SELL bucks.
Now assume all that liquidity which is the value of a variable is converted in cash.
What a biz. To print a 100$ bill costs say 2 USD. Makes 98 USD profit.
My forecast is that the FED will be eliminated because their actions are sinking the US economy. Their actions only help the banks which are the shareholders of the FED.
The FED will be eliminated in a couple of years when the dollar will lose its status of a global reserve currency. Just watch out where Gold and Silver are headed and you will see. The US dollar is doomed.
The only thing that is placing a footing below the US dollars is the still massive derivatives market which is nominated in US dollars. But this will change. And after watch out.
Karl Marx - The Capital. You are kidding me to base your assumptions on this. Better read Friedrich Hayek and von Mises. Good luck!
Now you say China can only buy dollars and US treasuries. :)) Everything has 2 sides. Nothing goes up forever :)
You seem to not get what is happening in the USA. Their future econ growth cannot eliminate their debt burden. Their social security system is imploding due to awful demographcs. That is why Fed is pumping liquidity to ignite more and more growth and to decrease the joblessness. But what actually happens is this liquidity goes in other parts of the World (this is the only right thing in your opinion) and ignites growth somewehere else.
Japan tried the same thing. To ignite growth by pumping liquidity for years. But what happened is they got 20 years of almost zero growth and they are not better off vs late 1980s.
wrong again.
In order to become indepent or less dependent on export they must print more yuan bills because the domestic market goes up and needs more cash. But this is a very long way to go
and for 10 or more years the development of domestic market requires support by exports.
China is in a trap. They made too many yuan and hence the domestic market is subdued by far too low wages and far too high food prices. China so far same as Russia depends on state of global economy. FEd is in the driver's seat.
"they will NOT need to collect greenbacks anymore but will start to unwind"
i have a mission fajita for you
they cannot unwind...rather they must wind up...
because the massive printing of yuan and the credit easing is backed with USD reserves.
After I understood Marx I understand how FED works ...unbeatable.
It is as it is.
You see...the FED prints central bank liquidity but not greenbacks. The liquidity is exported
and drives the inflation up in China ( and Russia, and now Eurozone) thus due to lack of cash
inflation remains low in US and the FEd can print more liquidity.
Since greenback is rare the value of USD cash rises, cannot fall.
This can only be broken if someone wants to convert liquidity in cash. Then it becomes evident FED's liquidity is not backed by anything. And then USD no does not fall but skyrockets.