Obama Party has been able to keep the U.S. Economy Up by a Debt Formula
Government keeps on printing, printing, printing more, more, more Greenbacks
Bo-doe-doe-dee-oh-doe – Happy Days are here Again Democrats Do Sing
Market’s Rising, Unemployment’s Down, Obama Care Scare Plan has 7.1 Million
But When Obama Leaves Office US dollar will Not be World’s Trading Currency
The Great Bubble Obama has created Since 2011 will Pop to Change U.S. Lives
I am in Agreement with James Richard’s Excerpt From The Royal Bank of Scotland
April 6, 2014
http://www.tribulationperiod.com/
Haggai 1:5-7 – Now therefore thus saith the Lord of hosts; Consider your ways. [6] Ye have sown much, and bring in little; ye eat, but ye have not enough; ye drink, but ye are not filled with drink; ye clothe you, but there is none warm; and he that earneth wages earneth wages to put it into a bag with holes. [7] Thus saith the Lord of hosts; Consider your ways.
Haggai 2:6-9 – For thus saith the Lord of hosts; Yet once, it is a little while, and I will shake the heavens, and the earth, and the sea, and the dry land; [7] And I will shake all nations, and the desire of all nations shall come: and I will fill this house with glory, saith the Lord of hosts. [8] The silver is mine, and the gold is mine, saith the Lord of hosts. [9] The glory of this latter house shall be greater than of the former, saith the Lord of hosts: and in this place will I give peace, saith the Lord of hosts.
Micah 5:5-9 – And this man shall be the peace, when the Assyrian shall come into our land: and when he shall tread in our palaces, then shall we raise against him seven shepherds, and eight principal men. [6] And they shall waste the land of Assyria with the sword, and the land of Nimrod in the entrances thereof: thus shall he deliver us from the Assyrian, when he cometh into our land, and when he treadeth within our borders. [7] And the remnant of Jacob shall be in the midst of many people as a dew from the Lord, as the showers upon the grass, that tarrieth not for man, nor waiteth for the sons of men. [8] And the remnant of Jacob shall be among the Gentiles in the midst of many people as a lion among the beasts of the forest, as a young lion among the flocks of sheep: who, if he go through, both treadeth down, and teareth in pieces, and none can deliver. [9] Thine hand shall be lifted up upon thine adversaries, and all thine enemies shall be cut off.
Begin Excerpt from The Royal Bank of Scotland via Ynet News
US dollar weakening threatens runaway inflation
Rickards
11/04/2013
The United States risks importing uncontrolled inflation through its deliberate efforts to weaken the dollar. ‘Currency wars’ expert James Rickards says such scenario ultimately threatens the global monetary system.
US dollar weakening threatens runaway inflation – Rickards (PDF 189.1 KB)
James Rickards, author of ‘Currency Wars: The Making of the Next Global Crisis’, told the RBS Macro Conference in London that the world was witnessing the early blows of a battle that could last for years but which no one would win.
He said the US Federal Reserve, Bank of England and Bank of Japan had implicitly agreed to simultaneously weaken their currencies by turning on the printing presses and so gain an advantage over emerging market rivals.
“In the 1930s, countries devalued sequentially, like thirsty soldiers passing around the canteen. Today the US, Japan and the UK are saying ‘let’s all ease together, lets not fight currency wars among ourselves but fight them with the rest of the world’”.
Despite intense focus on the weak yen this year, Rickards said Washington was actually giving Tokyo a “pass to trash its currency” because of its geopolitical importance to Washington and also Tokyo’s willingness to soak up growing supplies of US Treasuries that China was now buying in smaller quantities.
Rickards said the whole aim of the currency wars was not as many believed a competitive devaluation to boost export sales, but a tactic to induce consumer spending by increasing inflation through pricier imports.
If inflation climbs above nominal interest rates then consumers are incentivised to borrow rather than save as real interest rates become negative. The ‘stick’ to encourage spending is then an ‘inflation shock’ of higher-than-expected price rises that create almost a panic buying mentality.
Such a tactic would backfire disastrously, Rickards said.
“The Fed thinks monetary policy is a thermostat to be dialled up or down. That idea is deeply flawed,” he said, likening it instead to a nuclear reactor that was unstable and which could not be reversed if it went into melt down.
The Federal Reserve, he said, was prioritizing its unemployment-fighting mandate and would allow inflation to rise upwards of 4 per cent. But its efforts to then rein in rising prices would fail and inflation would start to spin out of control on the back of growing consumer confidence and faster spending patterns.
A similar process over the 1970s ended with US inflation rising to 15 per cent by 1980.
“I don’t think it will take 10 years this time,” said Rickards. “It could take as little as two or three years and end up with inflation around 9 per cent.”
In contrast to the situation 33 years ago however, the sheer complexity of the global monetary system this time meant it would be far more difficult to control the causes of inflation.
The consequences would be dire.
“The risk of a generalised collapse of confidence in paper money around the world is very high. Trade wars, social unrest, shooting wars, they are all possibilities”.
Leveraged to the hilt, the Federal Reserve would then have insufficient firepower to act effectively. The eventual crisis would lead to the end of the dollar standard, Rickards said.
“The next time this happens the Fed will not be able to bail out the world. Their balance sheet will go from USD800 billion to USD3 trillion now and to 5 trillion by the end of next year.
If this crisis hits in a couple of years, what’s the Fed going to do? Take the balance sheet to USD10 trillion? At that point the only clean balance sheet in the world is the IMF’s.
“In an acute financial panic, the IMF will re-liquefy the world with SDRs (special drawing rights) so they will be the world’s central bank and SDRs will be the global currency”.
Disclaimer
The statements and opinions expressed in this article are solely the views of James Rickards speaking at an RBS Macro Conference in London on March 14, 2013 and do not necessarily represent the views of the Royal Bank of Scotland.
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