Yuan in the SDR...

Discussion in 'Politics' started by Detroitgator, Nov 30, 2015.

  1. Detroitgator

    Detroitgator General Factotum
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  2. Bammer

    Bammer Serving up sh*t sandwiches
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    Now let's see if they can get their fiscal house in order. They are in far worse shape than we are.
     
  3. Detroitgator

    Detroitgator General Factotum
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    Agreed, but what a clown car of manipulation that basket is... funny part is, the UK, the last major reserve currency of the world, is probably actually the "least manipulated" of the bunch.
     
  4. Bammer

    Bammer Serving up sh*t sandwiches
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    Something I was going to start another thread on but didn't think it worthwhile given the limited interest.

    Despite all of the monetary stimulus, CBs are still struggling to stoke inflation. One idea that has been floated is retirement of government debt / fiscal stimulus financed entirely by CBs (literally printing money with no intent to repay). While I like the idea in theory as it would certainly stoke inflation, I hate it in that if you offer the bear the honey pot once, he will be back for more sooner or later.
     
  5. AugustaGator

    AugustaGator Junior Member
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    I have interest in these topics.
     
  6. pilot-in-fla

    pilot-in-fla Deplorable
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    All part of the consequences of the weakening of the US economy due to Obamanomics.

    Time to start investing in precious metals then?
     
  7. Gator Fever

    Gator Fever Senior Member

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    Japan seems to almost be doing something close to that right now and have finally admitted their CB has been purchasing stock futures to assist the market and I think they still have hardly any inflation. Deflationary forces are really strong in most of the developed world right now.
     
  8. L-boy

    L-boy Senior Member
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    Do you have any more info on this? Years ago i heard that Ron Paul floated a proposal - as a way around the debt ceiling - for the Fed to just retire some of the bonds they already owned. I could never really fully wrap my head around it. Given the Fed is in theory independent I never really grasped the implications of that. Is this the same thing as the dreaded trillion dollar coin?

    As I understand it, much of the QE wasn't really printing money, but the result was an increase in bank reserves, so if Fed just renounced their interest in debt, what does that do to the bank reserves?
     
  9. Bammer

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    I don't. I read about it a few weeks ago.

    I think there is a political appetite for it in China - which is in fact facing deflationary pressures. Japan would be a tougher slog, but the BOJ lost its independence when Abe took office. The Bundesbank would fight it tooth and nail, but I'm not sure they would prevail in stopping the ECB. The Fed might would do it, but it would REALLY open Pandora's box.
     
    • Detroitgator

      Detroitgator General Factotum
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      No, you're blindly partisan... it started 100 years ago and then we've gone "hockey stick" (in climate change talk) under the last two administrations. In fairness to them both, they had NO CHOICE and the next person will have NO CHOICE but to continue this game unless they want to induce a smaller massive collapse than the collapse that inevitably has ALWAYS happened, 100% of the time, in history.

      There are two choices at this point: 1) 1991 USSR type of internal collapse or 2) roll the dice on a World War. I'd say we're in #2 already.
       
    • Bammer

      Bammer Serving up sh*t sandwiches
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      I would have thought you were engaging in hyperbole a few years ago. But I definitely think we're on a path to hell. And I think the international economy is in much worse shape than people currently realize.
       
    • AugustaGator

      AugustaGator Junior Member
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      Why is that Bammer? What has changed, in objective and explicit terms, in the last few years?
       
    • L-boy

      L-boy Senior Member
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      Just curious, what about the current situation makes you believe a collapse is inevitable? Not tried to start an argument, just more curious. I don't dismiss the possibility, but I guess I have to look at

      - Personal debt - still high at around 79% to GDP, but down significantly from peak of around 100%. I think average runs around 50-70% GDP.
      https://research.stlouisfed.org/fred2/series/HDTGPDUSQ163N

      - Govt debt - historically high, but Federal Debt held by the public, which nets intergovt debt, is about 73%. This is high, but nowhere near the 100%+ in WWII. Also, if I am correct I think included in that number is the amount of federal debt held by the Fed

      https://research.stlouisfed.org/fred2/series/FYGFGDQ188S

      Corporate debt is high, not sure of the numbers, but much of that is locking in low interest rates and also some of it is backed by record levels of balance sheet cash.

      So curious what you are seeing that makes you think everything will eventually become unhinged.
       
    • L-boy

      L-boy Senior Member
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      I see a **** ton of risk in the world wide economy, but that can work two ways. A world wide weak economy can definitely hurt us, but if we are in relatively better shape than the rest of the world that can work as a positive for our economy too.
       
    • Bammer

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      Russia's position is far more precarious than it was three years ago. If oil doesn't recover, the economy is headed towards a collapse. Given the financial straits in which Moscow finds itself, Putin is far more likely to use external endeavors to keep public support high.

      Saudi Arabia is quite literally on a path to financial ruin. They are burning through the reserves at a clip that would make even the most liberal spender blush.

      Iran is asserting itself in the region and has the potential to be the strongest economy in the ME. The workforce is educated and the economy is far more diversified than the other gulf states. They have proven completely willing to confront the Saudis. Will we stick next to our "allies" or will those ties fray?

      China is proving more territorial in the East. Do we attempt to counter that? How long before we have a SU-24?

      Japan has modified its constitution to take a more aggressive stance and Abe has shown himself to be more confrontational than his predecessors.

      Europe is economically only now coming out of the throes of its financial morass, but Portugal just elected an anti-austerity party. How is that going to play? Three years ago I would say that Europe has become too docile to engage in conflict, but the influx of immigrants is bringing out the vitriol.
       
    • Bammer

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      We can fly above the turbulence for only so long before we run out of fuel. I think we're getting to that point. Our strong dollar is starting to really weigh on top-line growth. And ~60-70% of the S&P 500 is exposed to international conditions.
       
    • pilot-in-fla

      pilot-in-fla Deplorable
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      Sounds like a good time to knee-cap the economy to address the imaginary global warming problem. Obama's got that covered.
       
    • Bammer

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      Someone please ban this a-hole. He adds nothing to this board.
       
    • pilot-in-fla

      pilot-in-fla Deplorable
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      You sound like a broken record. But have you at least solved your strange sexual perversion projection problem?
       
    • URGatorBait

      URGatorBait #TeamDubs
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      That wasn't exactly a bannable offense.

      However Pilot, please try to stay on topic. Cowboy is enough of a troll, we don't need his efforts doubled.
       

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