Will Bill O’Reilly be tough enough to ask questions about Marxism?

Bill O’Reilly encourages us to send him questions for his pre Super Bowl Obama Interview.  Here is my top 1:

Hey Bill – with no evidence against Paul Ryan, the Left states he is out to gut health care and benefits for the elderly and creates a commercial with a Paul Ryan look a like pushing granny off a cliff.  So why can’t the conservatives get an opportunity to ask Obama a question where there is tons of evidence he is implementing a Marxist strategy to “fundamentally change” the US?  Please read the below to him:

Mr President – I was a Marxist scholar in college (1978) and at that time liked many aspects of Marxism but since then changed and became a free market capitalist.  Observing your 5 years as president it seems you have successfully implemented an onslaught of Marxist values on an unsuspecting public.  Your “war on work” and massive expansion of the “Dependency on Government” class have created a true “proletariat” class that may soon embrace a 21st century Obama version of Marxism.  Please comment

** Bill do NOT let him get away with spin.  Remind him that he seems to be following Vladimir Lenin’s main strategy that lead to Lenin’s version of Marxism.  That strategy is:  the quickest path to revolution is to debase a currency.  Cite the debt that has grown from 9.6 trill to 17.5 trillion in 5 years under Obama.

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Other 27 questions I sent to Bill :

Bill I dare you to ask even one of these hard questions.  How about asking  the 5 toughest ones and NOT letting BO “spin”?

Was Benghazi used to deliver weapons to Syria rebels, many of who were associated with al Qaida?

Where were you during the Benghazi crisis?

Defense Sec advised you right away Benghazi was a terror attack with al Qaeda influence.  Why did you for 2 weeks state it was due to a video?

What were the motives of the Benghazi terrorists?

Why is Clapper still in office as head of intelligence?  He lied under oath about NSA spying.

Why is Holder still in office?  He lied in Congress about his role in journalist wiretapping.

Why do you rarely speak favorably about the role of the private economy?

Do you believe the US should ultimately be a socialist nation?

What motivated you to take a job as community organizer in an organization founded by Saul Alinksky?

can you mention a few aspects of Alinsky’s rules for radicals that you still follow?

Do you consider that Saul Alinsky presented a more modern version of Marxism?

Why do you believe Government controlled health care is superior to one managed by private markets?

Are you worried your debt explosion may result in a dollar collapse?

If you are so concerned about income redistribution, why do you not take action to cut much gov waste?  If you did you would have more useful $ for all.

How can you justify the $430 billion annual cost in complying with the IRS and our tax code?  Is not that a huge waste and drag on the economy?

Pleas provide a few reasons why you are against the fair tax.  Please be aware the fair tax eliminated the IRS.

Why are you implementing immigration reform via executive fiat?

Why did you negate Clinton’s welfare reform without getting Congressional approval?

Why did you disobey a fed Court order that you rescind your sever restrictions on drilling oil off shore?

Where in the Constitution do you get such extensive powers to circumvent Congressional legislation while issuing executive orders?

Do you really think most Americans believe you were clueless about the IRS harassing of conservatives, NSA abuses, spying on journalists, fast and furious! and most of all that you did not lie stating that Americans would not loose their doctor with ObamaCare?

Did you and Candy Crowly rehearse how you would respond to the Bengahzi attack during the second Romney debate?  After all when you asked her to read the transcript it was on top of a huge pile of documents.

Did you lie about Benghazi  to get re elected?

Are you happy how you handled Benghazi – especially the part when you knew it was a terror attack but you said for 2 weeks it was about a video?

Vladimir Lenin stated that the quickest way to revolution is to debase a nation’s currency. Do you agree your policies mimic Lenin’s?  You started with a total debt of $9.6 trillion. It is now $17.5.

A result of many social welfare states over past century is that the lower income suffer most with growing income gaps.  Those with incentive learn new skills continuously and prosper.  many who become brainwashed by the Left believe they are victims of the rich and tend to loose focus, loose ambition, and loose jobs and income growth potential.  The Left needs this income gap and a villain in order to stay in power. They have been very effective in influencing the mindsets of many. we need more grass roots advocates of free markets and individual liberty.  Will you join  me in changing this mindset?

Twitter @Economics501

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Fair Tax Will Reverse US Progression to Deep Socialist Jungle

 

The Fair Tax (FT) changes dynamics for the poor and encourages them to create more income instead of relying on the Government.  The FT thus reverses the nanny state or the progression towards a deep socialist jungle.

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Since LBJ’s 1964 start of war on poverty (when poverty rate was 15%), the US has taxed, borrowed, and spent $21 Trillion on wide variety of poverty programs.  Since then the poverty rate has fluctuated between 11% and 15% and has been 15% the past 4 years.  Many poverty programs simply decreased the poors motivation to better themselves.  The Left brainwashed the poor, drilling into them, that they are poor due to greedy rich who take advantage of them and do not pay their fair share of taxes.  The rich are villains per the Left.  The elite Left know that if the poor better themselves that the Left will be out of power.  Hence they continue promoting policies that increase a Dependency on Government class.  The Left therefore attacks the FT as a give away to the rich but it is clearly not.  Some on the Right mistakenly attack the FT as an extension of the nanny state.  This also is incorrect.  Next we further debunk the Left and then focus on the attacks from the Right.

The poverty rate was in sharp decline when Johnson initiated the war on poverty program.  It fell from almost 23% in the late 1950s to 17.3% in 1965, a year after the program was announced and before it could have made any significant impact.

Meanwhile, an all-time high of Americans — nearly 9 million, 20% more than when Obama walked into the White House — are on disability. And not because they’re disabled, but rather because they can’t find jobs in Obama’s economy and have exited the workforce.  And what is Obama’s economy?  In a nutshell it is to increase the Dependency on Government class to keep the poor as poor and keep the Left in power.  Nearly a $trillion to the non productive public sector in stimulus was a total waste.  It is the private sector of the economy that creates new jobs that self sustain them, create ancillary jobs, new products, services, and industries. In essence Obama focused on the wrong sector.

(For more please reference IBD link below).

http://news.investors.com/ibd-editorials/010814-685709-johnsons-war-on-poverty-has-been-lost.htm

To the Right objectors:

The prebate is just up to poverty level and is fair; most poor will spend up to this point.  It is not a give away to the poor.  All will receive prebates up to the poverty level to offset the impact of the revenue neutral consumption tax.

FT taxes only new products and services and is revenue neutral.  The % is simple.  For something costing $77 one will pay total of $100.  This is 23% of the total cost or 23/77 or 30% of net cost.  Again this is required to make the FT revenue neutral.

Regarding Social Security (SS) and Medicare:  – all payroll taxes are eliminated for all.  Whoever works generates income which is not taxed at federal income level with the FT.  This pays for SS and Medicare.  By encouraging the poor to generate more income, the FT thus increases odds that the poor contribute more for payment of all entitlements by generating more income and consumption and thus tax and entitlement revenue.

Why do the gaps between the rich and poor continue to increase?

Two main factors are:

1 – Government policies that have encouraged many to become overly dependent on Government welfare programs.  Think of the Great Society programs that started in the mid 1960′s (already discussed).

2 – Archaic tax system that benefits the very rich at expense of the poor, small businesses and entrepreneurs.

The poor rely on the rich providing them with handouts and jobs.  New jobs are limited with a tax system that punishes success (income).   Our tax system retards our private entrepreneurial activity that in the past fueled our economy much faster.  Hence the poor stay poor while the rich become richer.

Given our tax system, many of the poor lack incentives to better themselves. Many have developed a mindset that entrenches them to stay poor long term if not forever.  Many of the poor likely realize that income is heavily taxed so why risk getting a job when the Government provides so much?

The Fair Tax, in Congress as HR 25, provides incentives for all, by not taxing income and thus encouraging one to generate more income.

The Fair Tax eliminates all deductions. It also eliminates federal personal and corporate income and payroll taxes and replaces that with a revenue neutral consumption tax. This will empower the private sector to significantly lead us back to prosperity as our businesses will be able to more strongly compete globally.

The elimination of federal income and payroll taxes will encourage all workers including the poor to improve their skills to earn more.  Upon examination, more of the poor will realize they can better themselves significantly by earning tax free income and not being punished by earning as much as they can.  This will encourage many to leap from their comfort zone of Government dependency.

The zero percent corporate income tax will entice domestic and foreign entrepreneurs to create new  businesses and jobs in the US.  The increased jobs growth will provide yet another incentive for the poor to strive for higher incomes.

In conclusion the FT is progressive while at same time reversing US drive to socialism.

More details in https://economics501.wordpress.com/category/tax-reform/.

To learn more also  please visit www.fairtax.org

Twitter @Economics501

 

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Tax Code Prevents Effective Capitalism – so Pass the Fair Tax

Ted recently had a letter to editor posted in the Daily Record – Morristown NJ local paper – again regarding the Fair Tax.  Below is the letter and link along with comments that followed on-line.  I invite all to join this debate and answer one question Ted raises:

Main argument here is that current tax system unfairly benefits large corporations. I propose the fair Tax as a remedy. To all readers – please propose your remedies, would love to read about them.

The letter:

Alex Pugliese is absolutely correct in his letter stating that “Capitalism works, when not playing favorites.” The current tax code by itself is a huge impediment to a more free market capitalist economy. Approximately $900 billion of annual corporate and individual tax deductions are of dubious value to economic growth. Many of these tax deductions are for large corporations. This mainly insulates them from threats from new, small, innovative companies. As a result our economy staggers. Clearly tax reform is needed.

The most promising tax reform alternative is the Fair Tax, now in Congress as HR25. It eliminates all personal and corporate income taxes, deductions and breaks, regressive payroll taxes, the IRS, and gruesome $430 billion annual compliance cost. It replaces that with a revenue neutral consumption tax on new products and services.

All will receive monthly prebates up to the poverty level to offset the consumption tax and render a progressive tax structure. Results will include domestic and foreign entrepreneurs investing in new industries, companies, jobs, thereby creating more wealth for all. To learn more please visit www.fairtax.org.

Ted Hruzd

The link:

http://www.dailyrecord.com/article/20131219/NJOPINION02/312190004/Tax-code-preventing-effective-capitalism

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Twitter @Economics501

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Fix #ObamaCare Now!

Fix #ObamaCare Now!

An immediate fix to our worsening health care plight can be accomplished as follows.

From congress 1 Democrat and 1 Republican will propose and immediately push through:

Strengthen private insurance industry and increase competition  and thus decrease costs by allowing all to contract with insurance companies across all 50 states.

Revert all ObamaCare insurance regulations except for these regarding pre-existing conditions.  Yes – allow consumers freedom of choice.  It is ok for a healthy 25 year old to opt for only catastrophic insurance.  Why must a 25 year old pay for colonoscopy insurance?  Why must a 60 year old woman pay for maternity care?

For the poor, increase funding for Medicaid and Medicare by as much as 50%.  Yes – this will cost billions and increase federal taxes for the (only 50%) that pay them.  But we must provide better quality care for the poor.  We are still a nation of strong morals.  ** I will need to calculate the total net cost of this.

What about those who choose not to buy insurance or cannot?  This may be 30 million. Continue to allow them to utilize ER services when needed.   Allocate a risk pool fund of $30 billion per year to handle this.  Care from this pool will not be as thorough or available as those who pay for insurance.  Hence it will be an incentive for those who can buy insurance to do so.  Why $30 billion per year?  Project 10% will require quite extensive coverage and thus multiple 3 million by $10,000; this is $30 billion.  This is just a rough projection and can be made more accurate.

Much damage has been done to current health care industry.  It will be expensive to fix it but we must.  Otherwise it will be extremely expensive and destroy our private health care industry, our world leading health care and tank our economy.

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Consider …

To leave our health care as is?  More have lost insurance than gained since Oct 1.

Sign up for #ObamaCare and you may be signing away your identity.
Many who expect to have signed up for insurance may find out Jan 1 that the insurance companies were not able to process applications due to web site back end processing bugs.  What about revenues for the insurance companies?  How about uncertainty among all corporations about ObamaCare impacts in late 2014 and 2015?  Any of these by themselves can tank the economy and cause long waits for health care services.  It is time for brave bipartisan team to tell BO this debacle is enough!  We will pass legislation veto proof to save our economy and health care.

How about Democrat Senator Joe. Manchin and Republican Senator Kelly Ayotte;  both are very bright and moderate.  Some must step it up now!  Time is of essence.

Twitter @Economics501

Dec. 8, 2013

Posted in Politics-National | Tagged , , , , | 1 Comment

China may pull Treasures, lead to Dollar collapse & Aftershock Economy, pending BO Economy, ObamaCare, Debt Debacles

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China may pull Treasures, lead to Dollar collapse & Aftershock Economy, pending BO Economy, ObamaCare, Debt  Debacles

 

 

 

 

US $ collapse is a definite possibility. China is closely watching our economy; they may pull the trigger that tanks the $.  What you are about to read is understood by only a very small fraction of all Americans.  Right now, the U.S. dollar is the world’s de facto reserve currency.  Most global trade is conducted in U.S. dollars, and almost all oil is sold for U.S. dollars.  More than 60 percent of all global foreign exchange reserves are held in U.S. dollars, and far more U.S. dollars are actually used outside of the United States than inside of it. 

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This has allowed the United States tremendous economic advantages. Most  Americans have no idea how much their current standard of living depends on the dollar remaining the reserve currency of the world.  Unfortunately, thanks to reckless money printing by the Federal Reserve and the reckless accumulation of debt by the federal government, the status of the dollar as the reserve currency of the world is now in great jeopardy.

Nations all over the globe use U.S. dollars to trade with one another.  This has created tremendous demand for U.S. dollars and has kept the value of the dollar up.  It also means that Americans can import products that they need much more inexpensively than they otherwise would be able to.

 

The largest exporting nations such as Saudi Arabia and China  end up with massive piles of U.S. dollars.  These exporting nations often reinvest much of that cash into low risk securities that can be rapidly turned back into dollars if necessary.  For a very long time, U.S. Treasury bonds have been considered to be the perfect way to do this.  This has created tremendous demand for U.S. government debt and has helped keep interest rates super low.  So every year, massive amounts of money that gets sent out of the US ends up being loaned back to the U.S. Treasury at super low interest rates.

 

It has been a huge advantage for our federal government to borrow money so cheaply, because the interest rate on 10 year U.S. Treasuries affects thousands upon thousands of other interest rates throughout our financial system.  For example, as the rate on 10 year U.S. Treasuries has risen in recent months, so have the rates on U.S. home mortgages.

 

Our entire way of life in the United States depends upon this game continuing.  We must have the rest of the world use our currency and loan it back to us at ultra low interest rates.  At this point we have painted ourselves into a corner by accumulating so much debt.  We simply cannot afford to have rates rise significantly.

 

For example, if the average rate of interest on U.S. government debt rose to just 6 percent (and it has been much higher than that at various times in the past), we would be paying more than a trillion dollars a year just in interest on the national debt.

 

But it wouldn’t be just the federal government that would suffer.  Just consider what higher rates would do to the real estate market.  About a year ago, the rate on 30 year mortgages was sitting at 3.31 percent.  The monthly payment on a 30 year, $300,000 mortgage at that rate is $1315.52.  If the 30 year rate rises to 8 percent, the monthly payment on a 30 year, $300,000 mortgage would be $2201.29.

 

Unfortunately, the truly bizarre behaviors of the Federal Reserve and the U.S. government fiscal policy under BO the past several years are causing the rest of the world to lose faith in our currency.  In particular, China is leading the call for a “de-Americanized” world.  The following is from a recent article posted in zerohedge.com:

 

For decades the US has benefited to the tune of trillions of dollars-worth of free credit from the greenback’s role as the default global reserve unit.  But as the global economy trembled before the prospect of a US default last month, only averted when Washington reached a deal to raise its debt ceiling, China’s official Xinhua news agency called for a “de-Americanised” world.

It also urged the creation of a “new international reserve currency… to replace the dominant US dollar”.

 

So why should we listen to China?

 

China now accounts for more global trade than anyone else does, including the United States.  China is also now the number one importer of oil in the world.

At this point, China is even importing more oil from Saudi Arabia than the United States is.

China now has an enormous amount of economic power globally, and the Chinese want the rest of the planet to start using less U.S. dollars and to start using more of their own currency.

 

The following is from a recent article in the Vancouver Sun

Three years after China allowed the yuan to start trading in Hong Kong’s offshore market, banks and investors around the world are positioning themselves to get involved in what Nomura Holdings Inc. calls the biggest revolution in the $5.3 trillion currency market since the creation of the euro in 1999.

 

Over the past few years we have seen the global use of the yuan rise dramatically

International use of the yuan is increasing as the world’s second-largest economy opens up its capital markets. In the first nine months of this year, about 17 percent of China’s global trade was settled in the currency, compared with less than one percent in 2009.

 

China just recently signed a major currency agreement with the European Central Bank

The swap deal will allow more trade and investment between the regions to be conducted in euros and yuan, without having to convert into another currency such as the U.S. dollar first, said Kathleen Brooks, a research director at FOREX.com.

“It’s a way of promoting European and Chinese trade, but not doing it with the U.S. dollar,” said Brooks. “It’s a bit like cutting out the middleman, all of a sudden there’s potentially no U.S. dollar risk.”

 

This last point is extremely critical.  There are now real alternatives to the $.

 

Major factors in China’s investment policies clearly are the explosive growth in US government debt, the weak US economy which results in even more debt, and incredible destructive fiscal polices such as ObamaCare, which, if allowed to continue, will devastate consumer discretionary spending (that is approx 2/3rd of our GDP).  Hence, China is viewing the US as a potentially and ever increasingly poor borrower with decreasing will and ability to repay debt.

 

So far much research for this post has come from the following exceptional analysis from Michael Snyder.  It is an excellent reference on China’s economy and actions in the foreign currency and trade arenas.

 

http://www.infowars.com/how-china-can-cause-the-death-of-the-dollar-and-the-entire-u-s-financial-system/

Michael Snyder
Economic Collapse
November 8, 2013

 

More … one more critical point from Michael Snyder:

 

Right now, the global move away from the U.S. dollar is slow but steady.  At some point, some trigger event will likely cause it to become a stampede.  When that happens, demand for U.S. dollars and U.S. debt will disintegrate and interest rates will absolutely skyrocket.

And if interest rates skyrocket that will throw the entire U.S. financial system into chaos.  At the moment, there are about 441 trillion dollars worth of interest rate derivatives sitting out there.  It is a financial time bomb unlike anything the world has ever seen before. There are four “too big to fail” banks in the United States that each have more than 40 trillion dollars worth of total exposure to derivatives.   The largest chunk of those erivatives is made up of interest rate derivatives.  In case you were wondering , those four banks are JPMorgan Chase, Citibank, Bank of America and Goldman Sachs.  A huge upward surge in interest rates would absolutely devastate those banks and cause a financial crisis that would make 2008 look like a Sunday picnic.

 

Right now, China seems content to use U.S. dollars for most of their international transactions.  China also seems content to hold more than a trillion dollars of U.S. government debt.  If that suddenly changes someday, the consequences for the U.S. economy will be absolutely catastrophic and every single American will feel the pain.

The standard of living that all of us are enjoying today depends largely upon China.  They can bring down the hammer at any moment and they know it.

 

More evidence of China’s role in pursuing a goal of the yuan becoming the world’s #1 currency, with prospect of potential $ collapse, comes from Michael Snyder’s Nov 22 post in http://www.infowars.com/china-announces-that-it-is-going-to-stop-stockpiling-u-s-dollars/

 

 

The central bank of China has decided that it is “no longer in China’s favor to accumulate foreign-exchange reserves”.  During the third quarter of 2013, China’s foreign-exchange reserves were valued at approximately $3.66 trillion

 

Right now, China owns nearly 1.3 trillion dollars of our debt.  Unfortunately, as CNBC is noting, if China is going to quit stockpiling our dollars than it is likely that they will stop stockpiling our debt as well…

 

Russia is also interested in moving away from the $.  This is nicely explained in

 

http://intellihub.com/2013/11/15/russia-tells-the-truth-about-the-decaying-dollar/

 

A Russian lawmaker, Mikhail Degtyarev, said the dollar was like a Ponzi scheme. He warned that the Russian government would have to bail out Russians holding onto dollars in the event of dollar collapse.

 

“If the U.S. national debt continues to grow, the collapse of the dollar system will take place in 2017,” said Mr. Degtyarev of the Liberal Democrat Party.

 

Russia is looking to deal with China and other countries directly in their own currencies instead of using dollars as some sort of international standard. Even if it is partly political theatre, partly to artificially raise demand for the ruble and entirely unlikely to happen at this point, it means things are going south for the dollar when politicians of other major gangs (governments) call the dollar out for the dying, overprinted currency of a hopelessly indebted nation-state that it really is. 

 

The weak US Economy:

 

 

The U.S. is running a $17.5 Trillion current account deficit (up from $9.6 Trillion January 2009) well over out annual GDP of approximately $16 Trillion.  We are in “Greece territory”.  Our debt requires foreigners to purchase new Treasuries to afloat.  Better investments for our foreigners are becoming more obvious – such as investing in their own economies.

 

ObamaCare is devastating as most economics well trained in free market vs socialist policies foresaw –  job loss, cancelled insurance, loss of doctors, and increased premiums and deductibles. All of which this president guaranteed would not happen, “period.”

 

Increased premiums and deductibles reduce disposable income and the velocity or turnover rate on the $.  Both are significant factors in economic growth.  Hence, ObamaCare is presently adding further impediments to economic growth.  How the public reacts to further economic slowdown will be critical over the next few months.  At a minimum we must try to shape public opinion to the point where there will be overwhelming outcry to fix this mess before it clobbers our economy greater than 2008-09.

 

 

http://news.investors.com/ibd-editorials/110713-678405-obama-recovery-remains-worst-since-the-depression.htm

 

 

 

Had Obama’s recovery been only as good as the average of the past 10 recoveries, the economy would be $1.3 trillion larger. That’s $4,038 for every person in the U.S., or $10,451 per household. And had job growth been just average, there’d be 7.3 million more people with jobs today. That means 64% of those now looking for work would be employed. Tax hikes, regulations, ObamaCare, the war on coal — that have deadened what should have been a strong rebound from the deep 2007-09 recession.

As long as those remain in place, Obama’s recovery will continue to underperform.
Next Steps

What can we do?

 

We need to have a mindset change where people exercise individuality and self responsibility that lets a free enterprise capitalistic system thrive.  

 

Even if we can wave a magic wand and significantly free up markets with less regulation and taxes, it would take some time for our citizenry to strongly embrace this.  However, it would be a tremendous start and in several years our economy might start growing close to its potential. Therefore, it is critical we defeat the Left’s drive to single payer government health care.  Our political leaders who champion free markets and individual responsibility must immediately present a clear plan as alternative to ObamaCare.  That plan should argue for competitive benefits of choice of private plans across states for consumers.  The next step after that would be to demand that states decrease state regulations on their own insurance companies. However, with choice among states, there would be great incentive for states to lessen regulations on insurance companies.  This would increase subscribers to the states that allow insurance companies more market flexibility.

 

If we win the above health care battle and more true free market capitalist Republicans lead effort to capture the Senate, we will be in stronger state to reverse BO’s destructive economic policies and rein in out debt.  This then may be our only chance to prevent a $ collapse and AfterShock economy.  Spread these points and tweet them to all!

 

Twitter @Economics501

 

References and Blogs ….

http://www.zerohedge.com/news/2013-11-08/623000-full-time-jobs-lost-last-month

 

 

More (nice charts) at ..

http://www.zerohedge.com/news/2013-11-08/whopping-932000-americans-drop-out-labor-force-october-labor-participation-rate-drop

 

http://www.breitbart.com/Big-Government/2013/11/08/720-Americans-Leave-Labor-Force-in-October

exodus pushed the labor force participation rate down to 62.8%, the lowest level since 1978

 

 

http://news.investors.com/newsfeed-ap/110813-477978-us-added-unexpectedly-strong-204000-jobs-in-oct.aspx#ixzz2k4tbJKjo 

 

http://www.infowars.com/obama-secret-service-agent-its-worse-than-people-know-and-im-not-trying-to-scare-you-either/

 

 

http://www.infowars.com/how-china-can-cause-the-death-of-the-dollar-and-the-entire-u-s-financial-system/

 

 

http://www.infowars.com/10-facts-about-the-growing-unemployment-crisis-in-america-that-will-blow-your-mind/

 

 

 

http://news.investors.com/ibd-editorials-obama-care/111113-678781-obama-admits-government-in-charge-of-health-care-is-inept-webhed-obama-admits-inept-govt-now-in-charge-of-health-care.htm#ixzz2kQrrbp00 

 

Great details in 

http://www.infowars.com/how-china-can-cause-the-death-of-the-dollar-and-the-entire-u-s-financial-system/

 

 

http://online.wsj.com/news/articles/SB10001424052702304868404579194101530086112?mod=WSJ_hps_LEFTTopStories

 

http://beforeitsnews.com/economics-and-politics/2013/11/obama-signs-deal-with-china-that-should-we-default-on-our-loans-they-can-take-u-s-property-2458518.html

 

http://www.examiner.com/article/impeachment-time-obama-grants-eminent-domain-rights-to-china-to-secure-debt

 

http://online.wsj.com/news/articles/SB10001424052702303460004579194213036953446?mod=WSJ_hpp_LEFTTopStories

 

 

http://intellihub.com/2013/11/15/russia-tells-the-truth-about-the-decaying-dollar/

 

 

http://news.investors.com/politics-andrew-malcolm/111513-679363-obama-obamacare-fix-affordable-care-act.htm#ixzz2kzrwCp3H 

 

 

http://news.investors.com/politics-andrew-malcolm/110613-678120-obamacare-if-you-like-your-health-plan-you-can-keep-it-not.htm?p=full

 

 

http://news.investors.com/ibd-editorials-obama-care/111513-679530-what-obama-is-trying-to-fix-is-the-constitution.htm#ixzz2kzulPBrX 

 

http://news.investors.com/ibd-editorials-obama-care/111513-679530-what-obama-is-trying-to-fix-is-the-constitution.htm#ixzz2kzv0JoxD 

 

http://www.infowars.com/congressman-warns-of-obamacare-secret-security-force/

 

http://online.wsj.com/news/articles/SB10001424052702304243904579200281204381194?mod=hp_opinion

 

http://beforeitsnews.com/alternative/2013/11/national-call-to-action-the-fate-of-the-country-is-now-in-our-hands-time-for-a-change-of-government-leadership-to-save-the-republic-gen-paul-e-vallely-2826518.html

 

http://www.investors.com/editorial-cartoons/michael-ramirez/679668

 

http://news.investors.com/ibd-editorials-obama-care/111813-679646-now-its-ok-to-talk-about-obamacare-repeal.htm

 

 

 http://www.foxbusiness.com/personal-finance/2013/11/18/wal-mart-criticizes-affordable-care-act-for-impacting-holiday-sales/

 

 

http://news.investors.com/economy/111913-679768-official-unemployment-rate-distorted-by-workforce-exit.htm

 

Today, America is a society where far too many of its members want/expect handouts & do not accept much or any personal responsibility for anything.  The country is deteriorating because there are enough Americans who have a love affair with government that has killed the desire for freedom.  There are too many Americans who want someone else to take care of them – they don’t want freedom, they want security.  We need to have a mindset change where people exercise individuality and self responsibility that lets a free enterprise capitalistic system thrive.

 

 

http://www.newyorker.com/online/blogs/johncassidy/2013/11/inequality-and-growth-what-do-we-know.html

 

 

http://www.infowars.com/the-october-2012-pre-election-jobs-report-was-faked/

 

 

 

http://news.investors.com/ibd-editorials/111913-679856-us-issues-1-trillionin-new-debt-in-just-6-weeks.htm

 

http://online.wsj.com/news/articles/SB10001424052702303985504579206210388287976?mod=hp_opinion

 

http://online.wsj.com/news/articles/SB10001424052702303653004579210172838389630

 

In February 2009, BO got $831 billion of stimulus spending. Not even seismographs can detect the results. Every speech he outputs about “middle-class folks” offers them the same solutions: more public spending on education, on public infrastructure projects and, even now, on alternative energy. As he tirelessly repeats what remain promises, the Labor Department’s monthly unemployment-rate announcement on Friday mornings has become a day of dread.

 

A normal post-recession growth rate of at least 4% would have made it possible for Mr. Obama and his progressive allies to chase virtually any pie-in-the-sky policy they wanted. Instead, the U.S. has fallen far off its normal 3.3% growth rate.

 

A U.S. president, faced with such devastating labor-market problems and persistently weak growth, should do anything—anything—that will give the American workplace more lift. Instead, he’s willing to entertain just one idea: more federal spending.

 

You know the theory here: Spend a public dollar and you get $1.50 of economic output. It hasn’t happened, but Barack Obama is gonna crank his old Keynesian Multiplier, created during the 1930s in the era of the Hupmobile, until it sputters to life.

 

Ponder, though, a partial list of the public-policy decisions that have flowed steadily out of the Obama administration and directly into a job-starved U.S. economy:

 

The no-decision on the Keystone XL pipeline and its union jobs; the 2,000-page regulatory law draped in 2010 across the entire financial sector; the shutdown in 2010 and then the slow-walking of offshore oil drilling; siccing the EPA on the utilities industry and the National Labor Relations Board on all industry; a 2010 FCC decision to regulate Internet growth; a significant tax increase this year; support this month for jacking up the federal minimum wage to over $10, certain to smother new jobs; the Justice Department’s $13 billion looting of J.P. Morgan JPM +2.00%  bank; and of course Hurricane ObamaCare.

 

Barack Obama has the U.S. economy on lockdown. It’s the worst thing this president has done. American resilience, and elections, mean it won’t stay this way forever. But for a lot of poor and middle-class folks, living with mom in the basement is getting old.

 

Write to henninger@wsj.com

 

 

Regarding Harry Reid’s nuclear option (Economics501):

Dems think they are in perpetual power now and wanted to solidify that with the filibuster elimination.  Why?   The demographics favor the Left.  So does huge and growing Dependency on Gov class AKA nanny state.  Those of us who favor free markets and limited gov better make our case plain and clear else we will be 100% socialist soon with an abysmal economy.  A good start will be to hammer the Dems over ObamaCare and convince all that greater the freedom our private markets have the more freedom of choice and prosperity for all.

 

 

http://news.investors.com/ibd-editorials-obama-care/112013-680068-obamas-run-down-america-to-save-obamacare.htm

 

http://news.investors.com/ibd-editorials/112013-680069-obamacare-website-has-major-security-flaws.htm

 

 

http://news.investors.com/ibd-editorials/112113-680266-senate-democrats-destroy-two-centuries-old-right-to-filibuster.htm#ixzz2lKy0IDir 

Follow us: @IBDinvestors on Twitter | InvestorsBusinessDaily on Facebook

 

http://news.investors.com/ibd-editorials/112113-680266-senate-democrats-destroy-two-centuries-old-right-to-filibuster.htm

 

http://nypost.com/2013/11/22/the-war-america-lost/ by William McGurn

 

Obamanomics (from Investors Business Daily – link below) : Amid reports of a spike in welfare spending and millions leaving the labor force comes more troubling news: The number of people on disability has leapt 20% under Obama as the U.S. jobs disaster worsens.

 

This surge in disability isn’t accidental, pardon the pun. There’s no mass epidemic causing literally hundreds of thousands to declare themselves disabled. It’s a result of the most miserable job creation in this nation’s modern history.

 

 

http://news.investors.com/ibd-editorials-obama-care/112213-680406-rising-disability-payouts-is-sign-of-job-market-distress.htm#ixzz2lQOLak2u 

 

Source for below stats:  socialsecurity.gov

 

No doubt about it: the numbers are alarming. When President Obama entered office, some 7.44 million Americans were receiving federal disability checks, according to data from the Social Security Administration. By October of this year, the number had swollen to 8.94 million Americans, a 20% gain. Total spending on disability has likewise risen by $31.3 billion to $140.3 billion, an increase of 29%.

 

 

Why is this happening? One obvious reason is that going on disability is an obvious and easy choice for many middle-aged and older Americans who can’t find jobs in Obama’s slow-growth economy. Yes, many are truly disabled. But the idea that a 20% jump in disability would take place in just four years strains all credulity.

 

Fact is, with minimal documentation you can go from unemployed and struggling to pay your bills to disabled and, at least, eating and paying for basics with a disability check. For some, that’s their only choice.

 

Evidence suggests hundreds of thousands of workers are doing just that. Add this to the disgraceful number of people on food stamps — 47.7 million, a near 50% gain since Obama took office — and the 46.5 million people now officially declared in poverty, and you have the makings of a social revolution of sorts.

 

With a smaller and smaller share of people paying for it all — 45% of the population pays no federal income tax — this is a recipe for serious social upheaval.

 

Millions of people no longer go to a private-sector job each day, but rather await a government check. As “compassionate” as that might seem, it isn’t. It’s creating a new class of dependents who’ll be more likely to vote for more and bigger government and higher taxes on businesses and those who do work — in short, a perfect voting class for so-called progressive Democrats.

 

Last week, about the same time as the disability data were reported, the Heritage Foundation released its own 2013 Index of Dependence on Government. Its broad-based government welfare index stood at 257 when Obama entered office in 2009. Just three years later, it stood at 332 — up 29% to its highest level on record.

 

These are frightening trends. The combination of soaring debt and growing dependence on government, as evidenced by the surge in disability recipients, endangers the nation, says Heritage, a think tank not prone to hyperbole.

 

“The U.S. has reached the point at which it must reverse the direction of both trends or eventually face economic and social collapse,” Heritage said.

 

The White House keeps touting its “recovery.” But a different picture emerges from the real economy — one where the real unemployment rate is closer to 13% than the official 7.5%, and millions of people have dropped out of the labor force and onto the dole.

 

Government dependency is poison to a republic such as ours. If we don’t break it soon, we’ll live to regret it.

 

 

Read More At Investor’s Business Daily: http://news.investors.com/ibd-editorials-obama-care/112213-680406-rising-disability-payouts-is-sign-of-job-market-distress.htm#ixzz2lQPjOfp6 

Follow us: @IBDinvestors on Twitter | InvestorsBusinessDaily on Facebook

 

 

 

 

…..  more from Investors Business Daily (IBD)

 

Millions of people no longer go to a private-sector job each day, but rather await a government check. As “compassionate” as that might seem, it isn’t. It’s creating a new class of dependents who’ll be more likely to vote for more and bigger government and higher taxes on businesses and those who do work — in short, a perfect voting class for so-called progressive Democrats.

 

Read More At Investor’s Business Daily: http://news.investors.com/ibd-editorials-obama-care/112213-680406-rising-disability-payouts-is-sign-of-job-market-distress.htm#ixzz2lQP82Ieg 

Follow us: @IBDinvestors on Twitter | InvestorsBusinessDaily on Facebook

 

Obamanomics: Amid reports of a spike in welfare spending and millions leaving the labor force comes more troubling news: The number of people on disability has leapt 20% under Obama as the U.S. jobs disaster worsens.

 

This surge in disability isn’t accidental, pardon the pun. There’s no mass epidemic causing literally hundreds of thousands to declare themselves disabled. It’s a result of the most miserable job creation in this nation’s modern history.

 

No doubt about it: the numbers are alarming. When President Obama entered office, some 7.44 million Americans were receiving federal disability checks, according to data from the Social Security Administration. By October of this year, the number had swollen to 8.94 million Americans, a 20% gain. Total spending on disability has likewise risen by $31.3 billion to $140.3 billion, an increase of 29%.

 

But this is just one of the many elements of the welfare system that are wreaking havoc on America’s finances.

 

The “trust fund” for disability spending has now been in the red for four straight years. The last time there were even three years in a row of red ink was during the stagflationary Ford-Carter era of the mid-1970s.

 

Why is this happening? One obvious reason is that going on disability is an obvious and easy choice for many middle-aged and older Americans who can’t find jobs in Obama’s slow-growth economy. Yes, many are truly disabled. But the idea that a 20% jump in disability would take place in just four years strains all credulity.

 

http://www.infowars.com/china-announces-that-it-is-going-to-stop-stockpiling-u-s-dollars/

 

http://investingchannel.com/article/266665/The-Great-Disconnect-United-States-Debt-vs-Growth#.UpBFdOKrqSp

 

http://beforeitsnews.com/economy/2013/11/obamacare-the-neutron-bomb-that-will-decimate-the-u-s-economy-2572932.html

 

http://www.ncbi.nlm.nih.gov/pubmed/21993024

 

http://www.zerohedge.com/news/2013-11-23/todays-wealth-destruction-hidden-government-debt

 

 

http://bastiat.mises.org/2013/11/got-the-wrong-right-but-the-right-wrong/

 

Blog by Economics501:

ObamaCare debacle is red herring.  Real battle is Start of BO total war against capitalism. Already insurance companies are blamed. All private companies will be vilified as never before.  This is classic Saul Alinsky tactics.  In crisis of your own making shift claim to your enemy, demonize it, and make it a moral battle – the “haves” vs “have nots”.  In the past with no evidence, the Left created a video with Paul Ryan pushing a granny off cliff. With much evidence, our Saul Alinsky trained, private economy hating BO is now in all out war to replace capitalism with his Alinsky variant of Marxism.  This is right in front of our eyes.  We must all resist peacefully and demand return to principles that made the US greatest nation ever – free markets and limited government.

 

 

From IBD:

The annual deficit for fiscal-year 2013, which ran from Oct. 1 to Sept. 30, totaled $680.28 billion, the Treasury Department said Wednesday, down from $1.089 trillion in the prior year. The latest report, released nearly three weeks late because of the partial government shutdown, arrived as a congressional panel started negotiations on government spending for the rest of the current fiscal year.

 

Despite the drop, the deficit remains high by historical standards.

 

The deficit fell to 4.1% of the country’s gross domestic product, the broadest measure of economic output, down from 6.8% in 2012. This measure, preferred by economists because it offers greater context, also remained historically high. The deficit peaked at 10.1% of GDP in 2009 but from 2002 to 2008 ranged between 1.2% and 3.5%.

 

For the full fiscal year, the Treasury collected $2.774 trillion, up 13% from the prior year and the highest level on record. The Treasury attributed the increase to a stronger economy, increased wages and higher taxes. Revenues equaled 16.7% of GDP in fiscal-year 2013, while spending totaled 20.8%.

 

Spending, at $3.454 trillion, was a little lower than a year ago, because of the troop drawdown in Afghanistan, less spending on unemployment benefits and automatic spending cuts known as the sequester. Contributions from mortgage giants Fannie Mae FNMA -8.68%  and Freddie Mac, FMCC -9.40%  the two mortgage-guarantee firms taken over by the government during the financial crisis, also helped lower the deficit.

 

“The nation’s deficit has fallen for the past four years, the fastest pace of decline over a sustained period since World War II,” Treasury Secretary Jacob Lew said in a statement.

 

In 2008 the deficit was $458.55 billion, and in 2007 it was only $160.70 billion. The last time the federal government ran a surplus was 2001.

 

 

http://online.wsj.com/news/articles/SB10001424052702304527504579168021920881270?mod=WSJ_hps_LEFTTopStories

 

http://news.investors.com/ibd-editorials-obama-care/103013-677356-the-phony-keep-your-plan-promise-was-key-to-getting-obamacare-enacted-webhed-obamacare-was-built-on-keep-your-plan-lie.htm

 

Blog by Economics501

 

Myth

Insurance companies were providing many substandard policies and ripping off customers with high proves.  ObamaCare with many more requirements will provide customers with much better prices.

 

Fact

In a free country consumers decide what policies they want.  Many ‘substandard’ policies were fine with consumers and they continued buying them.  After these policies were invalidated by ObamaCare, most consumers are paying much more than they did before and are paying for services they will never use.  This is a loss of freedom and a crime.

 

CNN reports that in September of 2010, in an attempt to let people keep their insurance plans, Senate Republicans tried to block the grandfather rule that is currently resulting in millions of Americans having their insurance policies cancelled. Democrats, including many who are facing re-election next year, unanimously voted to support the rule. The result, as we have seen, is two million already losing the insurance plan Obama repeatedly promised they could keep.

In its report, CNN points out that the whole point of the GOP efforts was to protect millions from losing their insurance. So what we have here is yet more proof that the GOP has been warning for years about this avoidable catastrophe, while the media and Democrats covered their ears and screamed happy talk.  

 

In September 2010, Senate Republicans brought a resolution to the floor to block implementation of the grandfather rule, warning that it would result in canceled policies and violate President Barack Obama’s promise that people could keep their insurance if they liked it. …

On a party line vote, Democrats killed the resolution, which could come back to haunt vulnerable Democrats up for re-election this year.

 

The bad news for Democrats is that every single Senate Democrat facing a tough 2014 reelection — Mary Landrieu, Jeanne Shaheen, Mark Pryor, Kay Hagan and Mark Begich — is now on record voting for a rule that will not only result in up to 20 million losing insurance they were happy with, but doing so after being warned that this would happen.

 

https://docs.google.com/document/d/13fJ6hPyCAJmaqOJ67GdmUXeYfGhQxK6pepkCLMgU_pM/mobilebasic?pli=1&viewopt=127

 

 

 

http://online.wsj.com/news/articles/SB10001424052702304655104579163761182702046?mod=hp_opinion

 

 

 

 

 

 

 

 

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Stop Myths that Conservatives Shut Down the Government

Fact
Conservatives such as Senators Ted Cruz and Mike Lee stated up front that their goal was to fully fund all of the Government except for ObamaCare.

Fact
The US Constitution specifies that budget funding starts in the House.  This then enables the House the option to combat an overextended president.  Our founders purposely set this up.  ObamaCare is now much different than the law that was passed given all of the exemptions.  The House was justified and brave in efforts to defund.

Fact
When defund effort failed, the House immediately passed bills to fund core Gov functions and also tried to compromise on delaying the individual mandate for 1 year.  Harry Reed refused to take votes on any of these.  Hence the Gov remained down.  Little would the Left know that few weeks later some of their own would push for this delay.

Fact
The House and Conservatives tried to compromise with at least 2 very reasonable options – delay tax on medical devices for 1 year and delay the individual mandate.  The Left refused.

Fact
Few Senate Dems (expect more) now support delay in individual mandate given the web site debacle.  Man, if they only accepted this in earlier then the Government shutdown would have been much shorter.

Fact
ObamaCare weak link clearly is how many in the 18-35 age group sign up so the young can in essence pay a lot more than they should to provide adequate funding for all others.  The critical number is 2.5 million in the 18-35 age group.   Good luck. At this rate this looks unlikely and the whole ObamaCare may unravel.

Michael Ramirez Cartoon

http://www.investors.com/editorial-cartoons/michael-ramirez/676685

 Maybe the Left will listen to Conservatives next time?

 Maybe not.  Consider the following:

 Fri 10/25 Megan Kelly 9 pm on FOX
Megan interviewed the Rahm Emanuel’s brother – Ezechiel? Call him E. E is a doctor and was a prime ‘architect’ of ObamaCare. He was condescending but Megan handled him well. One key part was E’s response to facts that over million have lost their insurance (from companies or their private employer) or have had substantial increases to premium and/or lost their doctor. Per E, BO did not lie. E lambasted the insurance companies and private companies for raising rates and dropping insurance plans.

*** The above is very significant. Why? This is classic Saul Alinsky tactics – shift blame on a crisis of your own making to your enemy, demonize your enemy, propagandize it is a moral battle – greedy “haves” versus “have-nots”. It may the opening battle to destroy private insurance companies leading to single payer health care. The underlying real battle here is traditional American capitalism (what little is left of it) versus expanding Socialism.  BO is closely following Vladimir Lenin’s revolutionary strategy from creating a culture of dependency, class warfare, confiscating wealth via ultra progressive taxation (your 401K and IRA may be next if ObamaCare costs explode), and most importantly – debasing the currency via increasing total debt from $9.5 Trillion to $17.3 Trillion in under 5 years. “debasing the currency is the quickest step to revolution” – Vladimir Lenin. This may be BO version of “fundamental change”. Let’s fight him every step of the way, restore free markets, limited government, our freedom.

 Twitter @Economics501

 

 

Posted in Politics-National | Tagged , , | 2 Comments

US Dollar Collapse more likely with Oct 17 Debt Ceiling Agreement – Wiedemer AfterShock Economy may come under BO

US Dollar Collapse more likely with Oct 17 Debt Ceiling Agreement – Wiedemer AfterShock Economy may come under BOThe probability of $ collapse under BO is now very likely.  Why?  The total debt continues to increase much faster than GDP 6 years strong and indefinitely under BO.  This is the main reason this week that China’s Dagong Global Credit Rating agency cut its credit rating on the U.S. by one notch to A- on par now with Brazil. Each day the US borrows average of $4 billion per day in treasury certificates and has the Fed buy $1.5 trillion of these treasuries in secondary markets to artificially keep interest rates low! is a day closer to a $ collapse. The debt ceiling agreement ensures this daily risk continues. This week also China signed a 350 billion RMB trade swap agreement with the European Central Bank. The ultimate goal? Replace the $ with the RMB as the world prime currency. Momentum is building.

Please review the table below where GDP and Debt are calculated in nominal dollars.

Year % ChgGDP YOY % ChgPubDebt-YOY
2008 1.66% 10.29%
2009 -2.05% 18.26%
2010 3.75% 14.22%
2011 3.85% 9.46%
2012 4.58% 9.10%
2013 2.56% 4.67%
Ave 2.39% 11.00%

Data source: Federal Reserve Bank of St. Louis web site, last accessed
October 16, 2013.

Majority of creditors would not buy US Treasuries if the Fed stopped QE.  Why?  We have an active Ponzi scheme and many creditors still try to time it.  They buy new debt then sell to the Fed in secondary market for a slightly higher price.  This can not last forever.  Another factor – creditors may soon run out of financial resources even if they wanted to buy new Treasuries.  Why? Our total debt is now $17.3 Trillion while the world annual economic product is barely over $70 Trillion.  At some point ($18, $20, or $22 Trillion??) the world will lack the means.
http://beforeitsnews.com/obama/2013/10/chinas-calls-to-pull-the-plug-on-the-us-dollar-and-de-americanize-asap-obamas-america-called-world-parasite-2456682.html

Notice actions of central banks around the global economy. In specific, after years of selling their gold bullion reserves, central banks are accumulating gold bullion again.

My belief is that central banks are losing trust in the dollar. Central banks could be realizing the devaluation of the U.S. dollar is inevitable, and thus, they are moving away from the $.

China-ECB swap details:
This week, the European Central Bank (ECB) and the People’s Bank of China built a bilateral currency swap line. Through this swap line, which will last three years, 350 billion yuan will be provided to the ECB and 45 billion euros will be given to the central bank of China.

The ECB, in announcing this deal, said, “The swap arrangement has been established in the context of rapidly growing bilateral trade and investment between the euro area and China, as well as the need to ensure the stability of financial markets.” The central bank added, “From the perspective of the Eurosystem, the swap arrangement is intended to serve as a backstop liquidity facility and to reassure euro area banks of the continuous provision of Chinese Yuan.” (Source: “Press Release: ECB and the People’s Bank of China establish a bilateral currency swap agreement,” European Central Bank, October 10, 2013.)

What will be the next move for central banks around the global economy? Do you really think they will continue to buy currencies that can be printed out of thin air? I doubt it.

The bottom line here? The U.S. dollar is in trouble. Congress has kicked the debt ceiling problem down the road again, this time until February of 2014. Meanwhile, gold is having its best day of the month. A new trend? Maybe even a permanent one.

http://www.infowars.com/33-stats-that-prove-that-something-desperately-needs-to-be-done-about-the-national-debt/

What to do?

Brace for an economic collapse under BO that will be more severe than the 2008-9 Great Recession.  Upgrade your job skills with immediate urgency and passion.  Competition for decreased labor force will be intense.  Make this commitment today.  Then you will also be in a position to lead the US back to prosperity after all economic hell breaks loose on BO’s watch.

References

http://www.breitbart.com/Big-Peace/2013/10/17/Why-China-Wants-to-Dump-the-Dollar

http://www.infowars.com/33-stats-that-prove-that-something-desperately-needs-to-be-done-about-the-national-debt/

http://news.investors.com/ibd-editorials/101813-675865-government-by-continuing-resolution-an-embarrassment.htm#ixzz2iDeCcQQ3

http://news.investors.com/ibd-editorials/101813-675865-government-by-continuing-resolution-an-embarrassment.htm#ixzz2iDeXPB5R

http://news.investors.com/ibd-editorials/101813-675865-government-by-continuing-resolution-an-embarrassment.htm#ixzz2iDfC82MW

http://news.investors.com/ibd-editorials-on-the-right/101813-675778-president-gets-control-of-debt-ceiling.htm#ixzz2iDleIesX

http://www.infowars.com/in-23-advanced-economies-u-s-adults-rank-21st-in-math-skills/

http://www.infowars.com/9-signs-that-china-is-making-a-move-against-the-u-s-dollar/

Excerpt from above follows:

So if the U.S. financial system is the core of the global financial system, then U.S. debt is “the core of the core” as some people put it.  U.S. Treasury bonds fuel the print, borrow, spend cycle that the global economy depends upon.
That is why a U.S. debt default would be such a big deal.  A default would cause interest rates to skyrocket and the entire global economic system to go haywire.
Unfortunately for us, the U.S. debt spiral cannot go on indefinitely.  Our debt is growing far, far more rapidly than our GDP is, and therefore our debt is completely and totally unsustainable.
The Chinese understand what is going on, and when the dust settles they plan to be the last ones standing.  In the aftermath of a U.S. collapse, China anticipates having the largest economy on the planet, more gold than anyone else, and a respected international currency that the rest of the globe will be able to use to conduct international trade.
And China is not just going to sit back and wait for all of this to happen.  In fact, they are already doing lots of things to get the ball moving.  The following are 9 signs that China is making a move against the U.S. dollar…
#1 Chinese credit rating agency Dagong has downgraded U.S. debt from A to A- and has indicated that further downgrades are possible.
#2 China has just entered into a very large currency swap agreement with the eurozone that is considered a huge step toward establishing the yuan as a major world currency.  This agreement will result in a lot less U.S. dollars being used in trade between China and Europe…
The swap deal will allow more trade and investment between the regions to be conducted in euros and yuan, without having to convert into another currency such as the U.S. dollar first, said Kathleen Brooks, a research director at FOREX.com.
“It’s a way of promoting European and Chinese trade, but not doing it with the U.S. dollar,” said Brooks. “It’s a bit like cutting out the middleman, all of a sudden there’s potentially no U.S. dollar risk.”
#3 Back in June, China signed a major currency swap agreement with the United Kingdom.  This was another very important step toward internationalizing the yuan.
#4 China currently owns about 1.3 trillion dollars of U.S. debt, and this enormous exposure to U.S. debt is starting to become a major political issue within China.
#5 Mei Xinyu, Commerce Minister adviser to the Chinese government, warned this week that if the U.S. government ever does default that China may decide to completely stop buying U.S. Treasury bonds.
#6 According to Yahoo News, China has already been looking for ways to diversify away from the U.S. dollar…
There have been media reports this week that China’s State Administration of Foreign Exchange, the body that handles the country’s $3.66 trillion of foreign exchange reserve, is looking to diversify into real estate investments in Europe.
#7 Xinhua, the official news agency of China, called for a “de-Americanized world” this week, and also made the following statement about the political turmoil in Washington: “The cyclical stagnation in Washington for a viable bipartisan solution over a federal budget and an approval for raising debt ceiling has again left many nations’ tremendous dollar assets in jeopardy and the international community highly agonized.”
#8 Xinhua also said the following about the U.S. debt deal on Thursday: US politicians have done nothing substantial but postponing once again the final bankruptcy of global confidence in the U.S. financial system”.  The commentary in the government-run publication also declared that the debt deal “was no more than prolonging the fuse of the U.S. debt bomb one inch longer.”
#9 China is the largest producer of gold in the world, and it has also been importing an absolutely massive amount of gold from other nations.  But instead of slowing down, the Chinese appear to be accelerating their gold buying.  In fact, money manager Stephen Leeb says that his sources are telling him that China plans to buy another 5,000 tons of gold.  There are many that are convinced that China eventually plans to back the yuan with gold and try to make it the number one alternative to the U.S. dollar.
So exactly what would happen if the Chinese announced someday that they were going to back their currency with gold and would no longer be using the U.S. dollar in international trade?
It would change the face of the global economy almost overnight.  In a previous article, I described some of the things that we could expect to see happen…
If China does decide to back the yuan with gold and no longer use the U.S. dollar in international trade, it will have devastating effects on the U.S. economy.  Demand for the U.S. dollar and U.S. debt would drop like a rock, and prices on the things that we buy every day would soar.  At that point you could forget about cheap gasoline or cheap Chinese imports.  Our entire way of life depends on the U.S. dollar being the primary reserve currency of the world and being able to import things very inexpensively.  If the rest of the world (led by China) starts to reject the U.S. dollar, it would result in a massive tsunami of currency coming back to our shores and a very painful adjustment in our standard of living.  Today, most U.S. currency is actually used outside of the United States.  If someday that changes and we are no longer able to export our inflation that is going to mean big trouble for us.
The fact that we get to print up giant mountains of money and virtually everyone around the world uses it has been a huge boon for the U.S. economy.
When that changes, the word “catastrophic” is not going to be nearly strong enough to describe what is going to happen.

For details about what an Aftershock may be please read – https://economics501.wordpress.com/2011/11/25/aftershock-economy-book-review/

Twitter @Economics501

 

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