Paper "AMERO" will replace the dollar by spring!? - page 31
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Yura, what's the conclusion. is the default good for america or not?
I read in an article that the Fed is the brains of the world economy and America the body! Will the brains be allowed to lose the body in a massive default?
I read in an article that the Fed is the brains of the world economy and America the body! Will the brains lose the body in a massive default?
In fact the USA is a parasite of the world economy and the Fed is the sex organ of that very parasite, through which external debts are fostered.
I read in an article that the Fed is the brains of the world economy and America is the body! So will the brains allow the body to lose its body in a massive default?
Will leave the body when another one is ready.
It could be China, Russia, India....
China is ready for it now.
Will leave the body when another one is ready.
It could be China, Russia, India....
China is ready for it now.
You need a dumb and fat body for brains! The Chinese are too skinny and hungry! Russians are too smart and the roads are bad!
On the subject of the amero.
The dollar is the world's currency, as recognised by the Bretton Woods agreement 60 years ago and firmly embedded in the global financial system of developed countries. Although the friends of the US did not print dollars themselves, they had a lot to gain from this machine. And they still do. But the debt pyramid must collapse at some point. Who will suffer? That question has not been solved amongst themselves.
On the other hand, the dollar is the national currency of the USA. At home, the Americans can do whatever they want. Their domestic pyramid is as big as the international one. It has to be kept from collapsing by the same money supply. It is a very unpleasant combination for the world's financial system.
Now suppose America switches to the Amero and the dollar is in default.
The Amero is not a world currency and will never be. Who, you ask, would agree to this unless all the debts are secured? And if they are secured, why the transition at all? U.S. liabilities are denominated in dollars and failure to meet them in any form, default or dishonest exchange for amero, will cause appropriate reaction of the creditors. As a result, the US will be left with its Amero in almost complete financial and therefore economic isolation. This is the end of the line for America, it cannot exist without the rest of the world.
That is why even if the Amero is introduced, it will be an ordinary regional currency, no better than the ACU. Personally, I don't see any point in the US pushing this project.
I don't mean to spite you. I just want to get this straight. Let's say I buy shares. All the firm is bankrupt. The trustee sells off assets. Something will come back, the bank has assets. buildings, offices, etc.
Taking bonds thinking the U.S. economy is the largest in the world. Your words. Are we buying into this economy? No. In a default they won't cut off a piece of arizona (silicon valley), i.e. we are buying an asset that is backed by a "word of honour" - a merchant's.
I'm just sitting here thinking, I started the printing press, printed the necessary paper money, bought real assets, land, production facilities, controlling interests, etc. And then I told everyone to go fuck themselves... I defaulted. What have I got to lose? A good name? I never had one. Assets? No, I got them all. I bought them up.
But I'm losing my debts, and I don't have any debt service claims on me. I forgive everyone I owe, and if they say 'no', I will print two more bags and let them go.
Russia defaulted in 1998. Is that the end of the world?
I think it is the best way out for america. But you have to prepare your citizens for it and find someone to blame. It's all in the bag.
And the guy's already been picked. His wife's got a vegetable garden outside the white house.
interesting lectures - even surprising
http://pravdu.ru/lessons/petrov/
It seems to me that these bonds are not backed by anything but "word of honour". It's up to each investor to decide whether to take the word of America or not.
Suppose there were to be a default, like in 1998, would the US pay with its production capacity? I think not.
You seem absolutely right. Bonds are by definition not backed by anything but the word of honour of the issuer. There are bonds with collateral, but that is a separate small branch on the bond tree.
When you issue a bond, the price of the bond is always the same 100,000 and you set a nominal yield of, for example, 10% and a maturity of, for example, 10 years. This means that the holder of the bond will receive 5,000 every six months for 10 years and will also receive 100,000 at the end.
The real price is determined by the bidding process, how much investors are prepared to pay for this pleasure. As always, everything is determined by the level of income and risk. If the yield is serious (all the same 10% per annum) and the risk is minimal (the largest economy in the world blah blah blah), then the investor is willing to pay more than the initial 100,000, thereby reducing the real yield of the bond.
Conversely, if the investor can earn more elsewhere (just in a bank account if the interest rate is high enough) and/or the level of default risk increases, then the price of the bond falls below 100,000 and the real yield rises.
There is a category of "junk" bonds, issued by companies whose prospects are very dim, where the yield can be 30% per annum as the risk of default is very high.
Once again, in the event of default, the bond is unsecured. Therefore, if the risk of the bond issuer defaulting grows, even if the interest rate stays unchanged, the price of the bond will go down and so the yield will go up.