Russia Just Passed A Law That Could Be Very Bad For The U.S.

Russian President Vladimir Putin has introduced legislation that would deal a tremendous blow to the U.S. dollar.  If Putin gets his way, and he almost certainly will, the U.S. dollar will be eliminated from trade between nations that belong to the Commonwealth of Independent States.  In addition to Russia, that list of countries includes Armenia, Azerbaijan, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan and Uzbekistan.  Obviously this would not mean “the death of the dollar”, but it would be a very significant step toward the end of the era of the absolute dominance of the U.S. dollar.  Most people don’t realize this, but more U.S. dollars are actually used outside of the United States than are used inside this country.  If the rest of the planet decides to stop accumulating dollars, using them to trade with one another, and loaning them back to us at ultra-low interest rates, we are going to be in for a world of hurt.  Unfortunately for us, it is only a matter of time until that happens.

When I first read the following excerpt from a recent RT article, I was absolutely stunned…

Russian President Vladimir Putin has drafted a bill that aims to eliminate the US dollar and the euro from trade between CIS countries.

This means the creation of a single financial market between Russia, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan and other countries of the former Soviet Union.

“This would help expand the use of national currencies in foreign trade payments and financial services and thus create preconditions for greater liquidity of domestic currency markets”, said a statement from Kremlin.

For a long time, tensions have been building between the United States and Russia over Syria, Ukraine, the price of oil and a whole host of other issues.  But I didn’t anticipate that things would get to this level quite yet.  It is expected that Putin’s new bill will become law, and this is only one element of a much larger trend that is now developing.

You see, the truth is that Russia and China have both been dumping dollar-denominated assets for months.  The following comes from a recent piece by Mac Slavo

Last year Russia began unloading massive amounts of their US dollar reserves. In the month of December 2014 alone Putin sold some 20% of the country’s U.S. Treasurys, a move that further increased tensions surrounding what can only be described as economic warfare between East and West.

Then, as if part of a coordinated effort, this summer it was revealed that China had implemented a similar strategy, dumping half a trillion in dollar denominated assets.

But that’s just the beginning of the end for the US dollar. Amid a major meltdown in Chinese stock markets the People’s Republic sold off billions in dollar assets last week in what was reported to be an effort to stabilize their collapsing financial markets.

And now, as Russia’s economy collapses under the weight of American and European sanctions, including what many believe to be widespread downward manipulation of oil prices, Vladimir Putin is sending a clear signal to the central bank of the world’s reserve currency.

China has the second largest economy on the entire planet, and Russia has the tenth largest.  In recent years, these two superpowers have become much tighter.  For example, just consider this headline from Sputnik News that I came across just today: “Crippling US Foreign Policy Draws Russia, China Closer Together“.

And I don’t know if you have noticed, but U.S. relations with China have turned rather sour lately.  Lots of accusations about spying and trade violations have been flying around, and just this week five Chinese warships were spotted off the coast of Alaska.  In the months ahead, expect our relationship with China to continue to unravel.

If China and Russia were to both fundamentally reject the U.S. dollar at some point, much of the rest of the world may choose to follow suit.

So why is that important?

The fact that most of the nations of the world use our dollars to trade with one another creates a tremendous amount of artificial demand for our currency.  In other words, the U.S. dollar is valued much higher than it otherwise would be just because it is the de facto reserve currency of the planet.

As a result, we can import massive amounts of products at super cheap prices.  When we go to Wal-Mart or the dollar store, we can fill up our carts with lots and lots of ridiculously inexpensive stuff.  Our standard of living is way higher than it actually should be.

And because the U.S. dollar is used so widely in global trade, major exporting nations end up with giant piles of our currency which they have been willing to lend back to us at ultra-low interest rates.  This has made it possible to fund our massively bloated federal government and to go 18 trillion dollars in debt.

If the rest of the world stops using our dollars and stops playing our game, we will be in a tremendous amount of trouble.  The cost of imported products would absolutely skyrocket and our standard of living would go way down.

In addition, the federal government (along with state and local governments) would have to pay much more to borrow money which would rapidly create a gigantic debt crisis.

So Russia knows where they could really hurt us.  Most of the “power” that America currently projects around the world is based on having the de facto reserve currency of the planet.  If you take our financial power away, we would be far, far less imposing on the global stage.  Sadly, the truth is that the U.S. military is rapidly shrinking and has largely been defanged by the Obama administration.

A lot of people that will read this article will not understand this, but it is very, very important to keep an eye on this emerging Russian/Chinese alliance.  I believe that it is going to play a critical role in world events during the years ahead.

So do you agree with me or do you disagree?  Please feel free to join the discussion by posting a comment below…

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60 Comments

  1. YOU SHOULD SOBER UP… OR COME OUT OFF YOUR DRUG INDUCED COMA… BEFORE YOU POST IN A PUBLIC PLACE…. OTHERWISE PEOPLE WILL REALIZE THAT YOU ARE A TOTAL DRUG ADDICT OR GLUE SNIFFER!!! OR JUST ANOTHER ILLERATE RIGHT WINGER!!!

  2. THE COMMENT YOU JUST MADE IS TOTALLY INCOHERENT! A SECOND GRADER WOULD GET AN F FOR SUCH A POORLY WRITTEN SENTENCE… AND THAT IS NOT AN EXAGERATION!!! AND ALMOST EVERYTHING YU POST IS EVEN MORE POORLY WRITTEN!!!

  3. ignorant dillie still does not know who i am , even tho told numerous times .,, u can quote others , just do not add ur own rants , it proves u do not understand the topics discussed and
    u can not keep track of the topic . communist and communist do not ==== . u are showing ur ignorance again !

  4. corporations set prices, not value. most larger corporations do a lot of consumer research to determine what those prices will be, so in essence, it’s actually the consumers that are setting the prices. Wages are priced based on the value of the position and how many people are trying to fill it. The ‘value’ of currency (today) is completely set by the people’s confidence in the ability of the government to repay its debts cross-referenced with how much is in circulation. and since governments (or the Fed) can manipulate the supply of such outstanding debts, it in effect manipulates the confidence the people have for said repayment. Most people understand that creating something from nothing (ie. money printing… AND its injection into the market through velocity) is going to reduce the value of any currency they already hold, and changes behaviors to the point that each single unit of currency is worth less than it was before.
    for the record, I don’t wish gold to be the only currency, as I stated before. but I will also reiterate that humans cannot just create more gold (at least not at this point in time), and it therefore provides a base of confidence, and hence, value.
    so many Keynesians like to gloat about the quick growth with debt-based money, which is only partially true. There is a lot of (relatively) quick growth, but ultimately it stagnates, and the drops are therefore so much worse. I’d prefer a system that is sustainable over fast growth, infinite indebtedness, and giant bubble bursts that inevitably occur.

  5. WE IS US REAL AMERICANS!!! WHO YOU RIGHT WING DIMWITS ARE IS A MYSTERY… MAYBE YOU RIGHT WINGERS ARE ALL COMMUNIST CHINESE PLANTS, TRYING TO UNDERMINE OUR NATION FROM WITHIN VIA YOUR LIES AND RIGHT WING PROPOGANDA!!!

  6. IT IS GOOD TO SEE THAT YOU RECOGNIZE A GOOD QUOTE WHEN YOU SEE ONE… AT LEAST ONCE IN AWHILE! AND YOU DIDNT EVEN TWIST IT… EXCEPT YOU LEFT OUT SOME OF IT!!!

  7. Why The Three Biggest Economic Lessons Were Forgotten

    Tuesday, February 11, 2014

    Why has America forgotten the three most important economic lessons we learned in the thirty years following World War II?

    Before I answer that question, let me remind you what those lessons were:

    First, America’s real job creators are consumers, whose rising wages generate jobs and growth. If average people don’t have decent wages there can be no real recovery and no sustained growth.

    In those years, business boomed because American workers were getting raises, and had enough purchasing power to buy what expanding businesses had to offer. Strong labor unions ensured American workers got a fair share of the economy’s gains. It was a virtuous cycle.

    Second, the rich do better with a smaller share of a rapidly-growing economy than they do with a large share of an economy that’s barely growing at all.

    Between 1946 and 1974, the economy grew faster than it’s grown since, on average, because the nation was creating the largest middle class in history. The overall size of the economy doubled, as did the earnings of almost everyone. CEOs rarely took home more than forty times the average worker’s wage, yet were riding high.

    Third, higher taxes on the wealthy to finance public investments – better roads, bridges, public transportation, basic research, world-class K-12 education, and affordable higher education – improve the future productivity of America. All of us gain from these investments, including the wealthy.

    In those years, the top marginal tax rate on America’s highest earners never fell below 70 percent. Under Republican President Dwight Eisenhower the tax rate was 91 percent. Combined with tax revenues from a growing middle class, these were enough to build the Interstate Highway system, dramatically expand public higher education, and make American public education the envy of the world.

    We learned, in other words, that broadly-shared prosperity isn’t just compatible with a healthy economy that benefits everyone – it’s essential to it.

    But then we forgot these lessons. For the last three decades the American economy has continued to grow but most peoples’ earnings have gone nowhere. Since the start of the recovery in 2009, 95 percent of the gains have gone to the top 1 percent.

    What happened?

    For starters, too many of us bought the snake oil of “supply-side” economics, which said big corporations and the wealthy are the job creators – and if we cut their taxes the benefits will trickle down to everyone else. Of course, nothing trickled down.

    Meanwhile, big corporations were allowed to bust labor unions, whose membership dropped from over a third of all private-sector workers in the 1950s to under 7 percent today.

    Our roads, bridges, and public-transit systems were allowed to crumble under the weight of deferred maintenance. Our public schools deteriorated. And public higher education became so starved for funds that tuition rose to make up for shortfalls, making college unaffordable to many working families.

    And Wall Street was deregulated – creating a casino capitalism that caused a near meltdown of the economy six years ago and continues to burden millions of homeowners. CEOs began taking home 300 times the earnings of the average worker.

    Part of the reason for this extraordinary U-turn had to do with politics. As income and wealth concentrated at the top, so did political power. The captains of industry and of Wall Street knew what was happening, and some played leading roles in this transformation.

    But why didn’t they remember the lessons learned in the thirty years after World War II – that widely-shared prosperity is good for everyone, including them?

    Perhaps because they didn’t care to remember. They discovered that wealth is also relative: How rich they feel depends not just on how much money they have, but also how they live in comparison to most other people.

    As the gap between America’s wealthy and the middle has widened, those at the top have felt even richer by comparison. Although a rising tide would lift all boats, many of America’s richest prefer a lower tide and bigger yachts.

    A PRETTY GOOD LITTLE ESSAY… AND GENERALLY VERY ACCURATE… WRITEN BY ROBERT REICH… WHO JUST HAPPENS TO BE THE DEMOCRAT I WOULD MOST LIKE TO SEE AS PRESIDENT…. EVEN IF HE IS ONLY 4 FEET TALL!!!

  8. BY FAR THE MOST POWERFUL CENTRAL AUTHROTITY SETTING THE VALUE OF THE DOLLAR IS…. DRUM ROLL PLEASE… CORPORATE AMERICA… WHO SETS THE WAGES PAID TO AT LEAST 90% OF ALL WORKERS… AND WHO SETS THE PRICES FOR NEARLY ALL PRODUCTS SOLD. BY DOING SO, THEY DEFINE THE RELATIVE VALUE OF THE DOLLARS THAT ALL THE REST OF US MAKE USE OF. ALL THE REST OF THE DETERMINATION OF THE VALUE OF DOLLAR IS PURE FREE MARKET ECONOMICS… THE EXCHANGE RATES DETERMINED BY BUYERS VERSUS SELLERS, ALL VALUING WHAT THEY BUY OR SELL ON HE BASIS OF THE RELATIVE VALUE OF WHATEVER THEY ARE BUYING, OR SELLING, WITH THE DOLLAR SIMPLY BEING THE CONVENIENT MEDIA OF EXCHANGE. IF GOLD WAS THE ONLY CURRENCY, THE SAME DYNAMICS WOULD OPERATE PRETTY MUCH THE SAME WAY! GOVERNMENT HAS VIRTUALLY NO ROLE IN ANY OF THIS… AT ALL!!!

  9. Well at least i made it past and through 2nd grade , , but every time i hear/see u respond in your nasty angry ill informed ignorant way , i know america is domed ! Your presence is a detriment , your facts misapplied and you can not even answer a question , ! Your mind wonders and your mouth has di·ar·rhe·a ! You supposed intellect is not queastionable – it is imagination on ur own part [ a poor one at that !]

  10. of course value is a human-defined trait. it’s a belief, nothing more. so it should be obvious that values change as circumstances change. What I meant was that in our current system, a central “authority” defines this value by manipulating the quantity in circulation. Abundant resources are naturally less valuable than rare resources. No system is perfect, not even a metals-based system. But history proves that people as a whole tend to ‘believe’ that such metals retain some value, whereas broken promises are long forgotten.

  11. G13MAN… THE SECOND GRADER WHO NEVER LEARNED TO READ AND WRITE, TRYING TO INSULT THOSE WHO HAVE LEARNED THOSE AND MANY OTHER INTELLECTUAL SKILLS!

  12. SO… YOU ARE TELLING US THAT ANY ECONOMIC SYSTEM IS UNACCEPTABLE TO YOU… BECAUSE ALL STORES OF VALUE ARE INHERENTLY ARTIFICIAL… EVEN GOLD AND SILVER! SOMEONE HAS SET AN ARTIFICIAL VALUE ON EVEN THOSE METALS, AND THUS THEIR VALUE FLUCTUATES… SOMETIMES WILDLY… EVEN OVER SHORT PERIODS OF TIME. THE OUNCE OF GOLD YOU USE AS MONEY TODAY TO BUY FOOD AND WATER WITH WILL BE VERY RAPIDLY DEVALUED IN THE CASE OF A CRISIS IN WHICH FOOD AND WATER ARE IN SHORT SUPPLY! THAT WOULD APPLY TO ANYTHING OVER ANY PERIOD OF TIME… TRUE VALUE IS SET ONLY BY THE BUYER AND THE SELLER OF ANY GIVEN ITEM, WHEN THEY AGREE UPON A PRICE FOR THAT ITEM. AND EVEN THEN, THERE IS NO TRUE VALUE… BECAUSE IN MANY CASES, A BUYER IS FORCED TO PAY A PRICE HE DOES NOT REALLY WANT TO PAY. HE AGREES WITH THE PRICE ONLY BECAUSE HE IS… IN EFFECT… BEING EXTORTED BY THE SELLER. AND QUITE OFTEN,THE REVERSE IS TRUE… A SELLER IS EXTORTED BY A BUYER, BECAUSE THE SELLER NEEDS TO SELL, SO THE BUYER PAYS WHATEVER HE CAN GET AWAY WITH. MANY TENS OF MILLIONS OF WORKERS ARE EXTORTED INTO ACCEPTING WAGES THAT THEY FEEL ARE MUCH TOO LOW, BECAUSE THEY HAVE NO OPTION BUT TO ACCEPT THE OFFERED WAGES… OR TO REMAIN UNEMPLOYED, AND STARVE ON THE STREETS BECAUSE OF IT!!! IN OTHER WORDS… ANY AND ALL VALUES ARE ARTIFICIAL… AND ANY AND ALL MEDIA OF EXCHANGE ARE THUS ALSO ARTIFICIALLY VALUED!!!

  13. ignorant dillie remains , read before u rant stupid , where is your brains ? it is below or above .. you jumped to rant again , so stupid u are , a legend in ur own trapped mind

  14. actually I don’t care what it would be as long as:
    1) the ‘store of value’ cannot be created by humans
    2) the government or ANY central party is not ‘in charge’ of the currency (ie. the representation of the ‘store of value’)
    3) counterfeiting is both difficult/impossible to create and easy to detect by the layman

    if fact, i like the idea of having a few systems (emphasis on few) that operate independently, which gives people the options if/when any 1 system would begin to fail.

  15. actually a LOT of people survive earthquakes, tornadoes, hurricanes, etc. and MANY of them are able to prepare and do just fine. people in tornado alley get shelters and/or build solid houses able to withstand them. people susceptible to hurricanes barricade their homes or at least have an evacuation plan.

    yes, sometimes you are put in situations in which you cannot control, but at the very least, by preparing for the most likely events, you can increase your chances.

    If you choose not to prepare for events which you can easily survive, then you only have yourself to blame for the unfortunate consequences that result.

  16. AGAIN, WHAT QUESTION WOULD YOU LIKE ME TO ANSWER??? PLEASE STATE IT IN COHERENT ENGLISH… RATHER THAN IN YOUR USUAL TOTALLY INCOMPEHENSIBLY INCOHERENT RAMBLINGS!!!

  17. and my rebuttal even before u answer
    THE WE is none existent because people like u and other liberal and power blocks do not promote USA for betterment of all { through hard work and responsibility } but divide it over race , education , prejudice [u], party affiliation [u] , ignorance [u] , and profit !
    The .1% have lied to lead the Liberal to believe in a false dream and over work those who do not see the mislead path taken !

  18. from dillie the divider,

    CONFIDENCE IN THE SYSTEM IS THE KEY… AND GIVEN THE ALTERNATIVES TO THE
    SYSTEM THAT WE HAVE, MOST RATIONAL AND SENSBLE PEOPLE REALIZE THAT THEY
    HAD BETTER MAINTAIN CONFIDENCE IN THAT SYSTEM! FOR ALL OF OUR PROBLEMS

  19. I just can’t get it through my thick cranium the concept that fifty years ago the democrats began a long line of fool-proof plans to rid the nation of poverty, and a half century later the poverty problem has gotten massively worse, yet all of the poor folks still vote democrat. Seems that the party of the libs is pretty much one big con job, led by a bunch of grifters that will tell lies to add and retain voters, but who have no actual interest in better the lives of those same voters. Either that or they are completely incompetent in all things economics.

  20. I WOULD LIGHTEN UP A BIT… EXCEPT THAT A 20 POUND SLEDGE HAMMER IS NO MACH FOR THE CONCRETE THEY MADE YOUR BRAIN OUT OF!!! TOUGH STUFF, AND TOTALLY IMPERMEABLE!!! KNOWLEDGE AND NEW IDEAS AND WISDOM RUNS OFF OF IT LIKE RAINWATER OFF A DUCK!!!

  21. Yep, it’s all the fault of republicans, yet since the the democrats declared war on poverty beginning with the Great Society, the number of impoverished has skyrocketed. Oh, and you are still not being paid by the word nor on your cut and paste skills, so maybe you should lighten up a bit.

  22. AND YOUR ALTERNATIVE TO THE EXISTING FLAWED SYSTEM IS???? SOMETHING THAT IS EVEN WORSE, NO DOUBT, BECAUSE THAT IS JUST THE WAY RIGHT WINGERS ROLL!!!

  23. NOT REALLY!!! SINCE WHEN DO EARTHQUAKES TORNADOES HURRICANES REPUBLICANS FAMINES PESTILENCES OR CIVIL INSURRECTIONS PICK AND CHOOSE THEIR VICTIMS???? IF A MAC TRUCK HAPPENS TO GO OUT OF CONTROL RIGHT IN FRONT OF YOU, YOU ARE TOAST, NO MATTER WHAT PREPARATIONS YOU MAY HAVE TAKEN. IF A FREIGHT TRAIN DERAILS AND TIPS OVER WHILE YOU ARE STILL IN ONE OF THE HALF LOADED FREIGHT CARS…. AS I AVOIDED BY LESS THAN 10 SECONDS ONCE UPON A TIME… YOU ARE IN BIG TROUBLE!!! IF YOU ARE ON A JET LINER THAT JUST GOT HIJACKED, AND IT IS HEADED STRAIGHT FOR THE WORLD TRADE CENTER… YOU BETTER MAKE YOUR PEACE WITH GOD PDQ… BECAUSE ITS GONNA BE LIGHTS OUT RDS!!!

  24. So now I want to maintain the existing system that i’ve advocated over and over is horrible? and the same one you constantly protect? now you are saying just the opposite.

  25. so according to you, planning and preparations make NO difference whatsoever in one’s ability to survive? that’s quite laughable to say the least.

  26. The Rise of the Working Poor and the Non-Working Rich

    Monday, March 30, 2015

    Many believe that poor people deserve to be poor because they’re lazy. As Speaker John Boehner has said, the poor have a notion that “I really don’t have to work. I don’t really want to do this. I think I’d rather just sit around.”

    In reality, a large and growing share of the nation’s poor work full time – sometimes sixty or more hours a week – yet still don’t earn enough to lift themselves and their families out of poverty.

    It’s also commonly believed, especially among Republicans, that the rich deserve their wealth because they work harder than others.

    In reality, a large and growing portion of the super-rich have never broken a sweat. Their wealth has been handed to them.

    The rise of these two groups – the working poor and non-working rich – is relatively new. Both are challenging the core American assumptions that people are paid what they’re worth, and work is justly rewarded.

    Why are these two groups growing?

    The ranks of the working poor are growing because wages at the bottom have dropped, adjusted for inflation. With increasing numbers of Americans taking low-paying jobs in retail sales, restaurants, hotels, hospitals, childcare, elder care, and other personal services, the pay of the bottom fifth is falling closer to the minimum wage.

    At the same time, the real value of the federal minimum wage is lower today than it was a quarter century ago.

    In addition, most recipients of public assistance must now work in order to qualify.

    Bill Clinton’s welfare reform of 1996 pushed the poor off welfare and into work. Meanwhile, the Earned Income Tax Credit, a wage subsidy, has emerged as the nation’s largest anti-poverty program. Here, too, having a job is a prerequisite.

    The new work requirements haven’t reduced the number or percentage of Americans in poverty. They’ve just moved poor people from being unemployed and impoverished to being employed and impoverished.

    While poverty declined in the early years of welfare reform when the economy boomed and jobs were plentiful, it began growing in 2000. By 2012 it exceeded its level in 1996, when welfare ended.

    At the same time, the ranks of the non-working rich have been swelling. America’s legendary “self-made” men and women are fast being replaced by wealthy heirs.

    Six of today’s ten wealthiest Americans are heirs to prominent fortunes. The Walmart heirs alone have more wealth than the bottom 40 percent of Americans combined.

    Americans who became enormously wealthy over the last three decades are now busily transferring that wealth to their children and grand children.

    The nation is on the cusp of the largest inter-generational transfer of wealth in history. A study from the Boston College Center on Wealth and Philanthropy projects a total of $59 trillion passed down to heirs between 2007 and 2061.

    As the French economist Thomas Piketty reminds us, this is the kind of dynastic wealth that’s kept Europe’s aristocracy going for centuries. It’s about to become the major source of income for a new American aristocracy.

    The tax code encourages all this by favoring unearned income over earned income.

    The top tax rate paid by America’s wealthy on their capital gains – the major source of income for the non-working rich – has dropped from 33 percent in the late 1980s to 20 percent today, putting it substantially below the top tax rate on ordinary income (36.9 percent).

    If the owners of capital assets whose worth increases over their lifetime hold them until death, their heirs pay zero capital gains taxes on them. Such “unrealized” gains now account for more than half the value of assets held by estates worth more than $100 million.

    At the same time, the estate tax has been slashed. Before George W. Bush was president, it applied to assets in excess of $2 million per couple at a rate of 55 percent. Now it kicks in at $10,680,000 per couple, at a 40 percent rate.

    Last year only 1.4 out of every 1,000 estates owed any estate tax, and the effective rate they paid was only 17 percent.

    Republicans now in control of Congress want to go even further. Last Friday the Senate voted 54-46 in favor of a non-binding resolution to repeal the estate tax altogether. Earlier in the week, the House Ways and Means Committee also voted for a repeal. The House is expected to vote in coming weeks.

    Yet the specter of an entire generation doing nothing for their money other than speed-dialing their wealth management advisers is not particularly attractive.

    It puts more and more responsibility for investing a substantial portion of the nation’s assets into the hands of people who have never worked.

    It also endangers our democracy, as dynastic wealth inevitably and invariably accumulates political influence and power.

    Consider the rise of both the working poor and the non-working rich, and the meritocratic ideal on which America’s growing inequality is often justified doesn’t hold up.

    That widening inequality – combined with the increasing numbers of people who work full time but are still impoverished and of others who have never worked and are fabulously wealthy – is undermining the moral foundations of American capitalism.

    I TRIED A NUMBER OF TIMES TO CREATE LINKS TO THIS AND OTHER STORIES BY ROBERT REICH AND JIM HIGHTOWER AND BILL MOYERS… ALL IN HONOR OF LABOR DAY… AND IN THE ALMOST CERTAINLY VAIN ATTEMPT TO KNOCK SOME REAL SENSE INTO YOUR ARROGANT AND SELF IMPORTANT BRICK BRAIN… BUT OF COURSE, THE RIGHT WINGERS WHO RUN THIS SITE DO NOT WANT LIBERAL LINKS PUBLISHED HERE!!! REAL LIBERAL THOUGHT MIGHT UPSET ALL THE RIGHT WINGERS WHO NORMALLY HAUNT THIS SITE!!! OR GIVE THEM SOMETHING TO TWIST AND DISTORT SO IT FITS THEIR PRE CONCIEVED NOTIONS OF WHAT LIBERAL DEMOCRATS REALLY THINK… LIKE YOU SO ROUTINELY DO!!!

  27. Funny stuff. Must be more of the tall tales in those mysterious “published” economics works that have never seen the light of day. Oh, and too bad that you don’t get paid by the word, with bonuses for capitalization and droning on – you might have a shot at getting out of the poor house.

  28. NO ITS NOT!!! APPARENTLY YOU HAVE NEVER TAKEN EVEN A BASIC ECONOMICS CLASS, OR YOU WOULD KNOW THAT THE NUMBER ONE INFLUENCER OF A CURRENCYS VALUE IS THE INTEREST RATES IT IS PAYING ON ITS GOVERNMENT AND CORPORATE DEBT, AND ON THE INFLOWS OF FOREIGN MONIES BEING USED TO BUY THE STOCKS AND BONDS… AND GOODS AND SERVICES… OF A COUNTRY… VERSUS ITS OUTFLOWS FOR THOSE SAME ASSETS AND SUCH. STRONG DEBT GROWTH, COUPLED WITH STRONG ECONOMIC GROWTH, WHICH IS USUALLY INDICATED, AT LEAST IN PART BY HOW STRONGLY ITS EQUITY AND BOND MARKETS ARE GROWING… DETERMINES A CURRENCIES RELATIVE VALUE. T HAT CAN BE INFLUENCED BY POLITICAL AND OTHER FACTORS, AS WELL, BUT THOSE FINANCIAL STATISTICS ARE WHAT USUALLY COUNT THE MOST! THE UNITED STATES HAS BY FAR THE WORLDS LARGEST DEBT LOADS… IN ABSOLUTE TERMS… ALTHOUGH CHINA AND MANY OTHER NATIONS OWE MORE RELATIVE TO THE GDP THAN WE DO JAPAN FOR INSTANCE OWES ALMOST 3 TIMES AS MUCH AS WE DO. AND GUESS WHICH MAJOR CURRENCY IS THE STRONGEST IN THE WORLD RIGHT NOW!!! THE UNITED STATES CURRENCY IS STRONGEST, FOR A NUMBER OF REASONS… BUT THE BIGGEST ONE IS THAT WE ARE PAYING MUCH HIGHER INTEREST RATES THAN OTHER NATIONS ARE… FOR GOVERNMENT DEBT, BUT ALSO FOR CORPORATE BONDS AND SUCH. WE ARE PAYING ALMOST 3 TIMES WHAT GERMANY IS PAYING, FOR EXAMPLE, AND PAYING EVEN MORE THAN ITALY AND OTHER RELATIVELY WEAK EUROPEAN STATES!!! AGAIN… I AM NOT SAYING THAT THIS IS A GOOD THING… BUT THAT IS THE REALITY, AND YOU SEEM TO BE OBLIVIOUS TO THAT REALITY… BUT NOTHING UNUSUAL ABOUT THAT!!!

  29. And a nation’s currency is devalued by this debt. Apparently you missed that day in economics class as well.

  30. WHAT QUESTION WOULD YOU LIKE ME TO ANSWER??? PLEASE STATE IT IN COHERENT ENGLISH… RATHER THAN IN YOUR USUAL TOTALLY INCOMPEHENSIBLY INCOHERENT RAMBLINGS!!!

  31. if, at some point, we the people stop using said ‘money’, and remove our confidence in the value of said ‘money’, only then can we remove those elites from power. THEY CALL THOSE KINDS OF EVENTS… REVOLUTIONS… AND THEY USUALLY ARE VIOLENT AND SOCIALISTIC REVOLUTIONS… LIKE THE REVOLUTIONS THAT THE FRENCH AND THE RUSSIANS AND THE CHINESE CARRIED OUT…. OR A FAIRLY PEACEFUL AND DEMOCRATIC STYLE REVOLUTION… ALSO VERY SOCIALISTIC…. LIKE THE ONE THAT FRANKLIN ROOSEVELT AND HIS MANY ALLIES AND SUPPORTERS PULLED OFF… THEY CALLED IT THE NEW DEAL… AND IT WAS THE FOUNDATION OF ABOUT 40 YEARS OF RAPIDLY RISING WEALTH AND PROSPERITY IN THIS NATION., ALONG WITH THE BECOMING A GLOBAL SUPER POWER! I WOULD ADVOCATE JUST THAT SORT OF REVOLUTION…. BUT YOU REPUBLICANS WOULD RATHER MAINTAIN THE EXISTING SYSTEM, I SUSPECT! THOSE DANG LIBERALS AND SOCIALISTS WANT A JUST ECONOMIC, SOCIAL, AND POLITICAL SYSTEM THAT IS FAIR TO EVERYONE… AND REPUBLICANS AND OTHER CONSERVATIVES JUST COULD NOT HANDLE THAT SORT OF THING!!! THEY WOULD WANT THEIR RICH MASTERS IN TOTAL CONTROL OF THINGS… AND WOULD WANT TO BE ABLE TO KISS UP TO THEIR RICH MASTERS… NO MATTER HOW MUCH IT HARMED THEM TO DO SO!!! REPUBLICANS ARE SUCH IGNORANT MASOCHISTS THAT WAY!!!

  32. YOUR ACCURATE COMMENT…. when things go to h3ll in a handbasket, people are not rational or sensible. CONTRADICTED BY…. I agree that we can’t stop such events from happening, but we can control how we get through them. WHEN THINGS FALL APART… AS THEY ULTIMATELY ALWAYS DO… THOSE WHO SURVIVE DO SO MOSTLY BECAUSE OF PURE DUMB LUCK! OR BECAUSE THEY ARE THE MOST VICIOUS CRIMINALS IN THE AFFECTED AREA.I MYSELF WOULD NOT WANT TO SURVIVE IN A REGIME CONTROLLED BY THE MOST VICIOUS CRIMINALS! OF COURSE… THAT LEADS TO A DILEMMA… IF ON DOES SURVIVE A CATASTROPHE VIA PURE DUMB LUCK… DOES HE OR SHEE JOIN THE VICIOUS CRIMINALS… OR DOES HE OR SHE BECOME ONE OF THEIR VICTIMS… OR DOES HE OR SHE WANDER OFF AND TRY TO SURVIVE TOTALLY APART FROM THE AREAS CONTROLLED BY VICIOUS CRIMINALS??? THAT IS NOT A QUESTION THAT I WOULD EVER WANT TO HAVE TO ANSWER FOR MYSELF OR MY FREIDNS OR FAMILY! BUT THAT IS A QUESTION THAT MILLIONS OF SURVIVORS OF HORRENDOUS EVENTS HAVE HAD TO ANSWER THROUGH THE AGES! VERY TOUGH CALL, THAT!

  33. what u think about me proves u are ignorant ! , I write plainly and have stated ,
    But u are able not to comprehend !
    even when i agree with you , u go off on a nonsensical blathering rage !

    so answer the question !

  34. Yes, it is all built on debt, and you’re right about the elites at the top not wanting it to be repaid due to the interest they earn. however, those are the people who are creating ‘money’ from nothing, so of course they aren’t going to care about some people not paying them back. if, at some point, we the people stop using said ‘money’, and remove our confidence in the value of said ‘money’, only then can we remove those elites from power. this is the very reason we need a currency that cannot be created by humans.

  35. “MOST RATIONAL AND SENSBLE PEOPLE REALIZE THAT THEY HAD BETTER MAINTAIN CONFIDENCE IN THAT SYSTEM!”

    when things go to h3ll in a handbasket, people are not rational or sensible.

    “THE SYSTEM WE HAVE IS FAR FAR FAR BETTER THAN ALMOST ANY OTHER SYSTEM OUT THERE… AND EVEN FAR FAR FAR BETTER THAN ALMOST ANY SYSTEM THAT HAS EVER EXISTED!”

    This is a matter of opinion.

    “….IS NOT SOMETHING THE HEALTHY MIND SPENDS MUCH TIME ON…. BECAUSE WHEN THOSE THINGS FINALLY HAPPEN, THERE IS NOTHING ANYONE WILL BE ABLE TO DO ABOUT IT!!!”

    I argue that healthy minds analyze all possibilities (or as many as realistically possible), and position themselves to the best of their abilities. I agree that we can’t stop such events from happening, but we can control how we get through them.

  36. And 3rd world countries will be happy to have the Corporate weight on their backs removed so they can be free and thrive !SO… YOU BELIEVE THAT CORPORATIONS ARE OPPRESSIVE??? I THOUGHT THAT YOU WERE A TRUE BELIEVING REPUBLICAN WHO THOUGHT THAT CORPORATIONS AND CAPITALISM CREATED WEALTH AND JOBS AND OPPORTUNITIES, WHEREVER THEY EXIST!!! OF COURSE… BOTH ARE TRUE. CAPITALISM DOES CREATE WEALTH AND JOBS AND OPORTUNITIES… BUT OFTEN AT A VERY HIGH COST TO THOSE WHO ARE OFFERED THE JOBS AND WEALTH AND OPPORTUNITIES! THE REAL MEASURE OF THESE MATTERS SHOULD BE… JUST HOW MUCH WEALTH AND JOBS AND OPPORTUNITIES ARE OFFERED… VERSUS THE LONG TERM TRUE COSTS OF THOSE JOBS AND OPPORTUNITIES AND WEALTH CREATION!

  37. NOT VERY MUCH LARGE SCALE DEBT… PUBLIC OR PRIVATE…EVER GETS REPAID. IT JUST KEEPS GETTING ROLLED OVER AND OVER AND OVER,,, ACCUMULATING NEW DEBT MOSTLY TO PAY INTEREST COSTS AS TIME GOES BY. YOU RIGHT WINGERS CANNOT UNDERSTAND WHY THE GOVERNMENT AND CORPORATIONS KEEP GETTING DEEPER AND DEEPER INTO DEBT…. BECAUSE YOU CONVENIENTLY FORGET THAT THE LENDERS MAKE HUGE AMOUNTS OF MONEY BY COLLECTING INTEREST ON WHAT THEY HAVE LOANED OUT!!! WHY WOULD THEY EVEN MUCH CARE ABOUT COLLECTING THE PRINCIPLE ON MOST DEBT… WHEN THEY MAKE THERI MONY BACK 2 AND 3 AND 4 TIMES OVER, JUST FROM THE INTEREST PAYMENTS THEY COLLECT??? WHY DO YOU THINK THAT THIS NATIONS DEBT MARKETS ARE 3 TO 4 TIMES THE SIZE OF THE NATIONS TOTAL STOCK MARKET??? ITS BECAUSE THE RICH MAKE MOST OF THEIR MONEY BY LENDING OUT A HUGE CHUNK OF THEIR NET WORTH TO ALL THOSE CORPORATIONS AND GOVERNMENT ENTITIES WHO BORROW JUST TO KEEP THINGS GOING! IF ANYONE WAS WORRIED ABOUT DEBT BEING REPIAD… YOU WOULD THING IT WOULD BE THE LENDERS! BUT THEY ARE NOT MUCH WORRIED… BECAUSE… ASSUMING THEY MANAGE THEIR ASSETS PROPERLY.. THEY ARE MAKING TRILLIONS OF DOLLARS A YEAR FROM THIS WHOLE SYSTEM… AT THE EXPENSE OF ALL THE REST OF US… AND WITH VERY LITTLE RISK! DEBT DEFAULTS GENERALLY COSTS THE WEALTHY ONLY A SMALL FRACTION OF WHAT THEY ARE MAKING FROM INTEREST INCOME! UNDERSTAND THIS SIMPLE REALITY… AND ALL OF A SUDDEN, YOUR WHOLE VIEW OF THE ECONOMIC AND POLITICAL SYSTEM WILL CHANGE DRAMATICALLY… AND BECOME FAR MORE REALSTIC THAN ANYTHING YOU RIGHT WINGERS SEEM TO BELIEVE IN!!! I AM NOT DEFENDING THIS RATHER CRIMINAL AND HIGHLY PARASITIC SYSTEM… BY THE WAY… I AM MERELY EXPLAINING IT… AS IF ANY EXPLANATIONS WOULD SINK INTO YOUR CONCRETE RIGHT WING SKULL!!!

  38. who is this WE u refer to ?
    If the WE is the USA ,
    It will not matter to rest of the world when they figure out that the USA can not pay its bill !
    And 3rd world countries will be happy to have the Corporate weight on their backs removed so they can be free and thrive !

  39. You seem completely oblivious to the fact that the US government has forgotten about the repayment of debt part. Shocking.

  40. LOOK AT ANY BANKS BALANCE SHEET…AND THE VAST MAJORITY OF THEIR ASSETS ARE LOANS THAT THEY HAVE MADE… OR BONDS THAT THEY HAVE PURCHASED FROM CORPORATE OR GOVERNMENT BORROWERS! THAT MAY SEEM BIZARRE… AND PROBABLY IS… BUT THE MODERN WORLD IS BUILT ALMOST ENTIRELY ON FINANCIAL CASH FLOWS… AND DEBT…AND REPAYMENT OF DEBT… ARE MAJOR SOURCES OF CASH FLOW.

  41. CONFIDENCE IN THE SYSTEM IS THE KEY… AND GIVEN THE ALTERNATIVES TO THE SYSTEM THAT WE HAVE, MOST RATIONAL AND SENSBLE PEOPLE REALIZE THAT THEY HAD BETTER MAINTAIN CONFIDENCE IN THAT SYSTEM! FOR ALL OF OUR PROBLEMS, THE SYSTEM WE HAVE IS FAR FAR FAR BETTER THAN ALMOST ANY OTHER SYSTEM OUT THERE… AND EVEN FAR FAR FAR BETTER THAN ALMOST ANY SYSTEM THAT HAS EVER EXISTED! WE ALL KNOW THAT WE ARE GOING TO DIE SOMEDAY… BUT RATIONAL PEOPLE ONLY THINK ABOUT THAT WHEN THEY ARE IN A POSITION TO INCREASE THEIR ODDS BY AVOIDING DANGEROUS PRACTICES, OR BY BUILDING HOSPITALS AND SYSTEMS THAT CAN HELP IN TIMES OF CRISIS. THINKING ABOUT DEATH… OR ABOUT THE COLLPASE OF MODERN CIVILIZATION, IS NOT SOMETHING THE HEALTHY MIND SPENDS MUCH TIME ON…. BECAUSE WHEN THOSE THINGS FINALLY HAPPEN, THERE IS NOTHING ANYONE WILL BE ABLE TO DO ABOUT IT!!!

  42. are you implying that debt is the only asset that exists? how do you define an asset? it’s obviously not the same way I do.

  43. some take longer, some shorter… just think about how long it used to take for communication and general human sentiment to cascade throughout the population in those days. now we do so around the world in an instant. the internet has changed the game, so that same 1000 years COULD happen in a matter of days. All it takes is enough people to lose confidence in the system and then it’s all over. All I know is when you prepare for the worst of times, you’ll be much better off all around.

  44. LET SEE NOW.. ONE MANS DEBT IS ANOTHER MANS ASSET. AND SINCE GETTING RICH REQUIRES ONE TO AQUIRE AND ACCUMULATE ASSETS… THAT IMPLIES THE ACCUMULATION OF DEBT! AS THE FINANCIAL EMPIRES OF THE RICH GROWS EVER LARGER, THE EMPIRES OF DEBT THAT THAT REQUIRES WILL ALSO GROW EVER LARGER. PAYINGDOWN ALL THAT DEBT MEANS THAT THE RICH WILL NO LONGER BE ABLE TO COLLECT HUGE AMOUNTS OF INTEREST INCOME, AND WILL NO LONGER BE ABLE TO PAY AROUND WITH THEIR ASSETS BECAUSE THEY WILL NO LONGER EXIST. SO… RICH REPUBLICANS WILL NEVER DO ANYTHING TO REDUCE THE GROWTH OF DEBT, HENCE WE NEED NOT WORRY ABOUT THE DEBT SPIRAL CONTINUING TO GROW… JUST LIKE IT HAS FOR THOUSANDS OF YEARS!

  45. WELL… THE ROMAN CITY STATE/REPUBLIC/EMPIRE/KLEPTOCRACY LASTED ABOUT A THOUSAND YEARS. WE ARE PROBABLY DOOMED TO FALL SOMETIME WITHIN THE NEXT 500 YEARS!!! WE WILL BE MONITORING THAT SITUATION CLOSELY… AT LEAST ONCE OR TWICE PER DECADE!!!

  46. RUSSIA AND CHINA ARE CONSPIRING TO DUMP THE DOLLAR, AND ARE RECRUTING MANY MINOR NATIONS TO DO THE SAME! IN RELATED NEWS, A BUNCH OF JUNIOR HIGH KIDS DECIDED TO STOP DOING BUSINESS WITH MCDONALDS, AND TO HANG OUT AT A WENDYS INSTEAD!!! SO FAR, THEY HAVE GOT ABOUT A DOZEN KIDS TO GO ALONG WITH THE PLAN!!!

  47. oh my GGOODNESS
    those who do not learn history , are doomed to repeat it !
    And those who learn history , are doomed to watch it repeat !

  48. Just like the Roman Empire also cannot fall, we too are a force too great to ever consider the possibility of such nonsense….

    wait, the Roman Empire fell, you say??? oh shi……..

    normalcy bias at its finest.

  49. To ignore the threat in this article will be disastrous! The BRIC countries have made waves like this recently. Losing the “reserve currency” role will cost us dearly to the point where just the interest on our debt will destroy our economy. Liberal economists claim that it will never happen but our out-of-control spending belies that. This is the major reason to reduce our debt!

  50. Michael Snyder partially correct and makes some sense. The US has been living on debt since the we went off the gold standard in 1972. The federal reserve has been a liability since its creation around 1913. We cannot continue to over regulate and over tax business and individuals to fund big socialist gov’t institutions. Many studies have shown that we could eliminate 50% of our federal and state gov’t agencies/departs. and would not effect the average tax payer since 70% of tax payers never benefit form gov’t programs. If we cannot borrow anymore everything will collapse. But then again you can only borrow so long before it does. Obummer and the fed have ben propping this fake economy for 6 years and we have not grown as an economy. Horrible job creation, average family income down four thousand $, 52 million on welfare(17 million increase), and over 51% of immigrants receiving welfare. Big banks and the yop 3 percent have benefites but that never reached the average person. Pookie still receives his welfare check and now get free Obummer phones. More spent on taking care of pookie instead of protecting our borders and national security.
    How sad of nation we have become.

  51. Good God the same old..old..old nonsense, please take your head out of the sand and look around. Oh sorry I forgot, you’re not paid to do that!

  52. I agree with the writer.
    The US has the god-gven right to impose all sorts of trade sanctions on Russia, but those reds have no right to offload their dollars trying to defend themselves.

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