Articles About The Fed, The Treasury, And The Destruction Of The Dollar

As I wrote two days ago, my father died and I have flown to Paris. This will be the last entry until Monday/Tuesday.


I have published a bunch of research about the Fed, the Treasury, and the destruction of the dollar. Together, they should be enough keep people busy over the next few days.


If you read all these articles, you will begin to see how everything ties in together.

The Monetary Policy of the Federal Reserve
*****The Fed Debate in the 1960s over Sterilized Foreign Exchange Intervention*****
The 1995-96 Period: When US Intervention In The Market Reached A New Level
Fed Was Aware Of Deposit Reclassification
The Mexican Peso Crisis and The Treasury's Exchange Stabilization Fund
Watching The Dollar Die
Carter Glass's influence on the twentieth century financial history of the US
Bill Simon (Perhaps Our Best Secretary Of The Treasury In The Last Century)
The Smoking Gun On Fed Gold Manipulation
Extracts From "Citibank, 1812-1970"
Gold all there when Ft. Knox opened doors in 1974
The American Crisis Of 1907
Fed Independence Is A Myth
Separating Money And The State

Some of the themes/points to look for:

The 1995-96 Period is when serious US market manipulation began.
The constant political pressure to not let interest rates go up.
The treasury's dominance over the Federal Reserve
The lack of will to take the steps necessary to halt inflation
etc...


Gold Prices

Finally, I want to mention that gold prices are nearly hitting $1060. The dollar collapse is underway (it is still the slow beginning stages, things will pick up speed by year end).



I will respond to email about Regia Russia Agro Fund Ltd (the fund I am setting up to invest in Russian agriculture) when I get back Monday.

This entry was posted in Currency_Collapse, Federal_Reserve, Important_Announcement, Market_Skepticism, Treasury, Wall_Street_Meltdown. Bookmark the permalink.

48 Responses to Articles About The Fed, The Treasury, And The Destruction Of The Dollar

  1. Anonymous says:

    One thing is true Eric...

    You hit the start of the dollar collapse on the nose...

    From February of this year...

    That rocks!

    Made a believer me, but there is much that still needs to be played out...

    And one of them is how much damage this will cause to the American society and how much chaos...

    I doubt you will talk about such things, since you come to this from an economic stand point, but its something that, at lest for me, I think about a lot..

  2. dashxdr says:

    Whoosh! There went 79 comments and all evidence of cyber terrorism.

    Another slate cleaned!

  3. Anonymous says:

    Bravo Eric for keeping the mess off your blog by eliminating the trashy comments so one can concentrate on your great insight.

    Rest and think of happy times with your father.

  4. dashxdr says:

    Speaking of the 8-9 year timeline for dollar collapse, Jim Willie CB had something to say about it:

    http://www.marketoracle.co.uk/Article14068.html

    The conclusion is the death of the USDollar is written in stone, and a USTreasury default lies down the road. If you believe the 8-9 year timeframe cited by Fisk and denied by the Saudis, then you believe in fairy tales. This timetable is much more palatable to sell to the US/UK maestros, much less threatening in words for a total disruption with overturned tables. The timing of the transition away from the Petro-Dollar will not be 8-9 years, not in this world.

  5. Anonymous says:

    @dashxdr

    Even he says it will take 2-3 years...

    A lot longer then what you wanted...

    And also a lot longer then what Eric stated...

    Eric, I believe, stated that a full dollar collapse would happen by next year...

    Then again Willie could be wrong...

    It could come sooner, or much later...

    LOL!

  6. dashxdr says:

    @LOLAnon

    You never seem to answer my question.

    How will the US government / empire maintain operations when the world has stopped buying its debt and it has fixed, irreducible expenses?

  7. Anonymous says:

    @dashxdr

    You forget the biggest thing about America at this point in history...

    Its rise in power was not because of the coercive manipulations of owning the reserve currency...

    Or because it fostered an ideology of democracy, rooted in the free market...

    No, it was do to the fact of its coercive military campaigns since WWII...

    The world may have changed since WWII and the world may understand this, even work to end it...

    But no nation is as powerful as The United States is...

    It will fall back on what it knows well, and has been doing for well over a half century, before it goes out...

    And this you can take to the bank.

  8. Anonymous says:

    Quote---------------------------
    dashxdr said...
    @LOLAnon

    You never seem to answer my question.

    How will the US government / empire maintain operations when the world has stopped buying its debt and it has fixed, irreducible expenses?

    October 9, 2009 11:52 AM
    Unquote--------------------------

    It won't.

  9. Willy2 says:

    The USD will go up once more when the stock- and/or bond-market goes goes down once more. This is the result of the carry trade. Borrow USD at (near) 0% and invest that money in a higher yielding assest/currency.

    By monetizing more and more debt the FED and the US will blow up in the long run but I think other currencies are in danger as well.

    The US is hell bent to keep a current account deficit, that's the only reason they can maintain the socalled PETRODOLLAR. In that way they print as much USD as they want and loot the rest of the world. But the flipside is that US consumers are suffering under higher price inflation.

    I didn't read this but I think ALL currencies - in the long run - will go down in value. That's a thing not confined to the USD.

  10. Anonymous says:

    @Willy2

    That's right...

    Every paper currency, read fiat, throughout history has been devalued into nothingness...

    Would think we would have learned...

    Such as it goes for humanity...

    Reliving the pain...

    And to think some here have hope in humanity...

    LOL!

  11. dashxdr says:

    @LOLAnon

    Can you just come out of the closet and post with a real identity? I don't know if you're the same LOLAnon or another one.

    LOLANon #1 thinks dollar index is going backup to 82 and higher.

    LOLAnon #2 thinks the dollar is going to worthlessness, being fiat.

    My head is swimming. Maybe it's best to ignore anonymous posters...

  12. Anonymous says:

    @dashxdr

    Yes, both of those posts were made by me...

    However, I know it may seem like I'm this hardcore America, Dollar supporter...

    But the fact is I'm really not...

    Here is my basic belief on the dollar:

    The dollar will go up in value before it's final crash...

    The time line on the crash will not occur like most people believe (as a matter of fact most people that have predicted that the crash would happen are changing their time lines, though Eric is the only that isn't which is one reason why I like Eric so much)...

    And before the final nail gets put into the dollar, to seal it in the ground, America will make an aggressive move against another state...

    Every statement I made here has reflected these basic beliefs, though some cryptic...

    When the first happens many who don't understand the market really well and were just followers of other people's advice will lose faith in PMs...

    At that point you will see a slight downward movement in PMs...

    And when the last happens...

    Well, I'll leave that to your imagination...

    Wouldn't want to put you through any mental anguish...

    LOL!

  13. dashxdr says:

    @LOLAnon

    You do realize you're a psychopath, don't you?

  14. Anonymous says:

    my god sits in the back of the limousine
    my god comes in a wrapper of cellophane
    my god pouts on the cover of the magazine
    my god's a shallow little bitch trying to make the scene

    I have arrived and this time you should believe the hype
    I listened to everyone now I know that everyone was right
    I'll be there for you as long as it works for me
    I play a game
    it's called insincerity

    starfuckers
    starfuckers
    starfuckers, inc.
    starfuckers

    I am every fucking thing and just a little more
    I sold my soul but don't you dare call me a whore
    and when I suck you off not a drop will go to waste
    it's really not so bad you know once you get past the taste
    (ass kisser)

    starfuckers
    starfuckers
    starfuckers, inc.
    starfuckers

    all our pain
    how did you think we'd get by without you?
    you're so vain
    I bet you think this song is about you
    don't you?
    don't you?
    don't you?
    don't you?

    now I belong I'm one of the chosen ones
    now I belong (and everyone knows) I'm one of the beautiful ones

  15. Anonymous says:

    My condolences on your father's passing. Thanks for all your insights.

  16. Numonic says:

    Silent Weapons for Quiet Wars. There is a silent run on the dollar that allot of people are unaware of. There is a Quiet War being fought between the Bureau of Engraving and Printing and the people using US dollars that allot of people are unaware of. The BEP is on the ropes and about to loose this war.

  17. Numonic says:

    Mr Pinnion said...

    The BEP ,as you call them, will win.
    there trying to make the debts pay-offable by lessening the value of the dollar through massive inflation. and they will do this.

    That is NOT what the BEP is trying to do. The BEP is only trying to save the seigniorage by preventing defaults. The BEPs printing does not increase the money supply, it only fills the hole that is already there. Meaning the BEP is only creating physical dollars for electronic money that already exists. For instance, I have a checking account but I choose to withdraw the physical cash from my checking account instead of use my debit card and electronically charge for what I want to buy. That physical cash is not adding to the money supply, it's only replacing the electronic money. It's not like if I couldn't get the physical cash I wouldn't spend the money. The money would still get spent, only I would have to do it with electronic money instead of physical cash. And when that mandatory action takes place, that will be the end of the seigniorage and prices will be rising. This is what the BEP is trying to prevent.

    As far as debts being paid, you really should go back to the last great depression blog where I explained that in a ponzi scheme economy there is nothing preventing debts from being re-paid as all that is needed is for someone to borrow from one place to pay back the loan of another place. This is how the economy has been working for decades. Welcome to the real world.

  18. Numonic says:

    Anonymous said...

    @dashxdr

    You forget the biggest thing about America at this point in history...

    Its rise in power was not because of the coercive manipulations of owning the reserve currency...

    Or because it fostered an ideology of democracy, rooted in the free market...

    No, it was do to the fact of its coercive military campaigns since WWII...

    The world may have changed since WWII and the world may understand this, even work to end it...

    But no nation is as powerful as The United States is...

    It will fall back on what it knows well, and has been doing for well over a half century, before it goes out...

    And this you can take to the bank.

    You are sadly mistaken Anonymous. The reason the US became the reserve currency was because it was the last loser during the gold standard. It held the most of world's gold. It didn't get this gold through military might, it got the gold through production and exporting and other nations exchanged the gold for American goods and services.

  19. Anonymous says:

    @Numonic

    "You are sadly mistaken Anonymous. The reason the US became the reserve currency was because it was the last loser during the gold standard. It held the most of world's gold. It didn't get this gold through military might, it got the gold through production and exporting and other nations exchanged the gold for American goods and services."

    LOL!

    Actually the genesis and the base of America's world domination was in fact as you state...

    But America's budding hegemony, based on pure economic strength, only lasted up to the early 50s...

    From there America found it could only go so far within the free market ideology...

    Socialism and Communism threatened American world hegemony...

    These states that lived by a different ideological and economic rational could not be won via capitalism...

    The only way was to use the American military...

    If you think I'm full off shit you need to read, or listen too, Dwight D. Eisenhower's farewell speech to Americans...

    From there on we, America, marched into full world hegemonic power...

    And no one stopped us...

    And thus most of the world now, in part, has not only accepted capitalism, but also our values...

    But then that is what an empire does to people...

    They make those that are weak submit to their authority...

    LOL!

  20. Numonic says:

    Anonymous I agree that the USA has spread itself across the world but it was only able to do so based on it's former reputation of liquidity. When the US defaults and it's seigniorage ends like is happening in Zimbabwe, US' military power will end along with it's currency.

    See the thing about you is that you seem to think that the strength of the US dollar depends on what the world does with the US dollar and believe that the world will do what the US wants it to do because of US military might and threats. You don't realize that the world is not in control of the value of the dollar, nor is the US through influencing the world by bullying them in to accepting US debt. The problem with the US economy is not what you think it is. The problem with the US economy is a shortage of physical cash. These other nations who are lending us the physical cash see their vaults emptying and see the inevitable. You don't realize that what these other nations are doing by buying gold and silver and commodities is/will not be the cause for the destruction of the dollar but is just/will be the effect. The move of these other countries to buy up commodities is a preemptive defensive move by these other nations because they see the inevitable. The US dollar being removed as the world reserve currency won't be the cause of the US dollar's collapse, it's the other way round, the US dollar's collapse will be the cause of it's removal as world reserve currency. The US will have no one else to blame but itself and economic law for the destruction of the US dollar. The world is trying their best to save the US dollar but they too must protect themselves when they see the imminent. The source of the problem right now is with the Bureau of Engraving and Printing and the people using US dollars. No one is trying to destroy the dollar, the US has just failed in trying to turn users of the US dollar in to a cashless society. If the US could only convince everyone to stop withdrawing any physical Fed Notes at all while at the same time give everyone with a right to these Fed Notes the freedom to withdraw physical cash without any consequences, then the US dollar's problems would be solved. But no matter how hard they tried with ads of credit and debit cards and trashing using physical cash, even from the start by making the currency a cheap worthless commodity (cotton-linen) so that no one would have incentive to hold the physical currency, they still failed. It wasn't that their attempts did not work at all, on the contrary it worked well, as most transactions are done electronically. It's only that it didn't work well enough as that small percentage of transactions done in physical cash is now too much for the Bureau of Engraving and Printing to take.

    And this isn't only a problem with the US dollar. Many other nations are practicing Quantitative Easing and are printing up their physical currencies in mass as well.

  21. Anonymous says:

    @Numonic

    "... The problem with the US economy is not what you think it is. The problem with the US economy is a shortage of physical cash."

    I stopped reading right there...

    How you can turn this back into your manta is beyond belief...

    However, one day you will see why your talk of a shortage of physical cash is meaningless..

    Until then, it's pointless to have a discussion with you...

    Peace.

  22. Anonymous says:

    "When war becomes peace,

    When concepts and realities are turned upside down,

    When fiction becomes truth and truth becomes fiction.

    When a global military agenda is heralded as a humanitarian endeavor,

    When the killing of civilians is upheld as "collateral damage",

    When those who resist the US-NATO led invasion of their homeland are categorized as "insurgents" or "terrorists".

    When preemptive nuclear war is upheld as self defense.

    When advanced torture and "interrogation" techniques are routinely used to "protect peacekeeping operations",

    When tactical nuclear weapons are heralded by the Pentagon as "harmless to the surrounding civilian population"

    When three quarters of US personal federal income tax revenues are allocated to financing what is euphemistically referred to as "national defense"

    When the Commander in Chief of the largest military force on planet earth is presented as a global peace-maker,

    When the Lie becomes the Truth."

    http://www.globalresearch.ca/index.php?context=va&aid;=15622

  23. Numonic says:

    Yeah anonymous keep running away and ignoring the truth.

    You're afraid to answer the question of why the Bureau of Engraving and Printing is printing so many more new Federal Reserve Notes.

    I don't know why you fear that question.

    The only answer to printing more new Federal Reserve Notes is because the current amount is close to not meeting demand.

    But of course you'll ignore this simple fact.

  24. Anonymous says:

    It really is interesting as to why the world's financial system has problems in regard to blowing another bubble in real estate and consequently the derivatives on this real estate. Why not proclaim that every "off-balance sheet" derivative of major banks are void. How hard can that be? Or even better, let central banks buy every-single derivative they have. That would free their capital, what's left of it anyway. No, the problem seems to be much deeper. Numonic has an interesting explanation, but would like to hear from you (Numonic) how come this problem hasn'surfaced before? I mean, as you say and i agree, people /were/are withdrawing paper (FRN) the whole time this bubble in derivatives expanded. Do you feel that now the pace of withdrawals has incresed and if so, why?

  25. Numonic says:

    Anonymous this problem has surfaced before(in previous recessions), only we were able to print our way out of it. Today the problem has gotten too large to bear because today there are too many people with money in the bank. This money in the bank is an obligation for Federal Reserve Notes upon demand and even though transactions done with Federal Reserve Notes are only minor, when you increase the number of people making transactions, you are also increasing the number of these minor transactions.

    The banks always have the power to increase lending. There is nothing physically holding them back from typing electronic numbers and transferring them to another computer. If they wanted, they could bring the housing market and everything back up to where it was at the top of the boom, but they are choosing not to because creating more people with wealth is potentially putting more holes in the dike. A dike the Bureau of Engraving and Printing is trying to stop from sinking.

    There is allot of evidence that there are too many holes in the dike for the BEP to plug and dike will sink.

  26. Numonic says:

    mr. pinnion did you read my previous response to what you said?

    About the BEPs reasons.

  27. Anonymous says:

    Numonic: I wasn't reffering to previous recessions but to the time period from 2004 - 2008 when the bubbles (stockmarket, real estate) were blown. During this period people had to be withdrawing paper at certain pace and if anything I would expect that they are currently holding back on spending and that would imply decrease in amount of withdrawals. On the other hand I can find logic in increased amount of withdrawals due to uncertainity in banks (good old bank-run). DO you think this is what drives the proccess? If not can you explain how things are diff. now than before the crisis (2004 - 2008 time period) regarding the amount of withdrawls? I can also see that in case of rising prices the amounts withdrawn would be larger.

  28. Anonymous says:

    My good friend is a producer of medical marijuana, and is not concerned about the dollar collapse. He says marijuana would maintain its value in the face of any collapse. What do you think eric?

  29. Anonymous says:

    That is the war to come...

  30. Numonic says:

    Anonymous Anonymous said...

    Numonic: I wasn't reffering to previous recessions but to the time period from 2004 - 2008 when the bubbles (stockmarket, real estate) were blown. During this period people had to be withdrawing paper at certain pace and if anything I would expect that they are currently holding back on spending and that would imply decrease in amount of withdrawals. On the other hand I can find logic in increased amount of withdrawals due to uncertainity in banks (good old bank-run). DO you think this is what drives the proccess? If not can you explain how things are diff. now than before the crisis (2004 - 2008 time period) regarding the amount of withdrawls? I can also see that in case of rising prices the amounts withdrawn would be larger.

    But it was taking place during the inflation of the bubble. It's continuing on to today because, that money is locked in an obligated account that must deliver the Fed Notes upon demand. So more people were withdrawing as the bubble was inflating and it finally reached a breaking point, the banks saw their vaults getting empty and shut off the credit hose(this is when we consider the bubble popped).

    It is true spending has decreased but it hasn't decreased enough to fix the problem.

    I don't agree with the idea that there are people withdrawing physical cash from banks in fear of the banks loosing that physical cash. I explain how stupid it would be to even be hoarding physical cash during a banking crises when the currency is paper unless the person doing so is also keeping a large amount of his savings in private physical precious metals(in which case there would be incentive to hoard the physical cash as it would put stress on the BEP to print enough for the banks and the hoarding would be helping to cause banks to default in turn ending the Federal Reserve Note seigniorage and subsequently increasing the value of precious metals in relation to the FRNs). I explain that in the last blog about the Cause of the Great Depression.

    No what is causing a run on the banks is just minor ordinary transactions, only there are too many people now making these minor ordinary transactions.

    It's simple math. 1% of 1 million is greater than 1% of 1 thousand and that is basically what is happening. The percentage of transactions in physical cash for each person is for example 1% and stays 1% but when you increase the number of people now making those transactions, the amount in that 1% is larger(it's still 15 though). There are more people with a bank account now than before the boom. That means there are more people making these minor transactions in physical cash.

    I'm glad that you see that in the case of rising prices the withdrawals would be larger which is why I say the govt. truly wants a strong dollar which also means the govt. doesn't want the banks to return to their previous easy lending habits. The govt. wants the credit contraction to continue for as long as the BEP needs to print the needed amount of Fed Notes. Expanding credit is like I said, potentially putting more holes in the dike the BEP is trying to stop from sinking.

  31. Anonymous says:

    LOL!

    From Moronic...

    "No what is causing a run on the banks is just minor ordinary transactions, only there are too many people now making these minor ordinary transactions."

    I mean wtf....

    You guys are taking this guy serious?

    "It's simple math."

    LOL!

    Its a run on physical cash people...

    Never mind that we have electronic cash, because its value isn't the same!

    Moronic, stop the drug abuse...

    And check into the mental hospital that dashxdr visits...

    When you do tell him hi for me...

    LOL!

  32. Numonic says:

    Anonymous, Who the fuck ever said the value of the electronic money was not the same?

    Don't put words in my mouth like you shove the govt.'s dick down yours.

  33. Anonymous says:

    LOL!

    LOL!

    LOL!

    LOL!

    LOL!

    LOL!

    x3

  34. Anonymous says:

    To Numonic: even though i haven't seen similar explanation of the current crisis on the internet i remember reading an essay on german hyperinflation in the 20' which in part confirms your idea and that is that the demand for notes back then was also rising and the printing presses weren't physically capable of producing the amount of notes to satisfy the demand by the public.

    If you're right then there has to be evidence that the real printing presses are working at full speed producing notes at record levels. Do you have any info/facts on that matter or is it just your "speculation" that this is actually taking place? Of course the ultimate evidence would be the introduction of a 5.000 dollar bill.

  35. Numonic says:

    So far the evidence i have that there is a shortage of physical cash is 1. FDIC's funds running low(which I believe their funds are physical cash), 2. the monetary base increasing as much as it is, 3. bank reserve requirements being brought to 0. By the way slightly contrary to what Eric was saying when discussing US banks operating without reserve requirements, I believe the lowering of reserve requirements was an EFFECT of the crisis, not the CAUSE. The crisis really began from the beginning of the banking system. From the start there was a war with getting people to use the promises(electronic money) instead of the payment(physical money) in order to take the stress off of the printing press, unfortunately expanding credit only delayed the inevitable. Physical cash still remained to be used although in minor transactions but with credit expanding so much over the decades and more and more bank accounts being created, the number of these minor transactions with physical cash was also increasing and it became so much that banks had to use up the cash in reserves as the printing press could not print up the physical cash fast enough. This is why reserve requirements have dropped so low because banks had to take from reserves to fulfill the obligations of physical cash withdrawals.

    But basically right now my strongest evidence is the monetary base, FDIC funds, Reserve Requirements oh and the Fed Funds rate which measures how much the Fed charges for taking physical cash from the Fed, it's at 0 to .25 which means the Fed is trying to make it as easy as possible for these banks to get physical cash. I actually have allot of evidence. More and more evidence comes visible to me from time to time.

  36. Numonic says:

    The $5,000 bill won't be introduced until after prices have risen high enough to warrant such large denominations. The fallacy allot of people make is that they think that during hyperinflation such as in Zimbabwe the larger denominated bills are what caused prices to rise, this is false. The prices were rising before the larger denominations were created. The larger denominations were only created to make it more convenient to continue to use the currency otherwise if it became to inconvenient to use the currency people would begin to look for other more convenient forms of currency such as an ounce of gold or silver instead of 1 million $100 bills. The move to using gold and silver as barter/currency would hurt the already damaged paper currency even more being that gold and silver are so rare, the use of it in place of the currency would totally destroy the currency. So this is why they would create larger bills but as you can see in Zimbabwe's case and in every other hyperinflation case for that matter, the creation of larger denominations could not fix the problem. From that moment on the ball was already set in motion and all the creation of larger denominations did was to stall the inevitable. That's all that the banking system has been doing from the start, stalling the inevitable. The inevitable is the return of the currency to it's intrinsic value. And look on the market for yourself, what is the intrinsic value of 1 gram of cotton-linen? worthless. Many times less than one cent.

    Right now the demand is for the currency denominations only problem is that that demand is close to exceeding the speed that the printing press can print to meet that demand. When the printing press fails to meet that demand, that 1 gram of cotton-linen piece of paper called a Federal Reserve Note will no longer be seen as a Federal Reserve Note but for what it is 1 gram of cotton-linen. The value of the Federal Reserve Note is the same value as the electronic money you hold in your bank account(ANONYMOUS) and the source of the FRNs(dollar's) value comes from the printing press and the printing presses ability to print enough to meet obligated demands(prevent default). Because that is what seigniorage is. Seigniorage is a minting cost. The govt. charges an outrageously high minting cost for it's pieces of cotton-linen paper and throws in legal tender laws monopolizing the money system and making each individual in the US act as if they are the Federal Reserve themselves by making the Federal Reserve Notes payable for all debts. Which is why the FRN maintains it's outrageously high minting costs regardless if it is coming straight from the Federal Reserve or if it is coming from you. It's not like a car where as soon as it leaves the dealership it drops in value if you try to sell it. What the legal tender law does is make it as if everyone was the owner of the car dealership and in that way, the value that the car was sold at from the original dealership(Federal Reserve) remains the same value when sold by any one else(this of course is not taking in to account supply and demand but I don't want to confuse things because as I stated before there are 2 ways the dollar can loose value: (1) is by defaulting and (2) is by too many dollars chasing too few goods[which would more likely happen with electronic dollars than physical] and for now I'm focusing on the former(defaulting) because that's the path I see the dollar's taking to destruction).

  37. Numonic says:

    Right now the demand is for the currency denominations

    This should read: Right now the demand is for the current denominations

  38. Anonymous says:

    To Numonic: I understand you perfectly.

    From your arguments I can derive that the probability of a hightened inflation (as in rising prices) and hyperinflation through government spending/printing is acutally extremely low. Would you agree?

  39. Anonymous says:

    Numonic said...

    "Fed Funds rate which measures how much the Fed charges for taking physical cash from the Fed, it's at 0 to .25 which means the Fed is trying to make it as easy as possible for these banks to get physical cash."

    I swear to god you're on crack...

    And anyone that listens to you needs medical help...

    LOL trillions in loans...

    And all in physical cash...

    Yeah, you're brain dead...

    And dashxdr stop fucking feeding him...

  40. Anonymous says:

    You know what, skip my last comment...

    I'll bit and play nice...

    @Numonic

    "So far the evidence i have that there is a shortage of physical cash is..."

    You been going on for a while now about this idea of yours...

    You stated that many people (well noted economists and economic commentators, on both sides of the issue, and even Eric) have been wrong about what the cause of this crisis really is...

    And to you, from what I have been able to read, is that you think it stems from a lack of physical cash..

    Some here have pointed out to you, me included, that society today isn't as relent on physical cash as it once was...

    Make no mistake, we live in the age of digital money...

    But be that as it may I would like you to answer a few questions that I have for you...

    In giving out your points you stated:

    "1. FDIC's funds running low(which I believe their funds are physical cash)..."

    Has there ever been, since this crisis, a panic over bank closings, over 80+ banks, that people are demanding that their money be taken out of banks?

    So much so as to explain your rational as to why there is a shortage of physical cash?

    No, there hasn't been...

    So could that mean that when the FDIC looks at their books and see that when they sold a bank's assets they get less then book value?

    And over time, having to cover for everything these failed banks did, and then also to cover the difference between the book value and the price the bank was sold...

    Couldn't be this why they are running out of money?

    And when they sell these assets and cover the banks past actions, do they demand physical cash from the buyers, or settle what the bank owns in physical cash or is each done electronically?

    "2. the monetary base increasing as much as it is..."

    Is the monetary base measured only in physical cash or does it also include digital?

    The answer, if you haven't guessed, is both...

    So this doesn't prove anything, at least to me, that the crisis is tied to a lack of physical cash...

    "3. bank reserve requirements being brought to 0."

    True, some backs are not required to have a reserve..

    Such as banks having 10.7 million or below in deposits...

    But lets take a look at what the laws says for a second on transaction liabilities:

    "Total transaction accounts consists of demand deposits, automatic transfer service (ATS) accounts, NOW accounts, share draft accounts, telephone or preauthorized transfer accounts, ineligible bankers acceptances, and obligations issued by affiliates maturing in seven days or less.

    Net transaction accounts are total transaction accounts less amounts due from other depository institutions and less cash items in the process of collection."

    Source

    Note the bold section, it means two things:

    (1) All transactions are less then what bank has in physical cash (these banks will still have physical cash to pay to people or businesses that withdraw physical cash)...

    And (2) It also means that almost all of those transactions are electronic in nature and thus no need for physical cash, and if you don't believe click on the links of each transaction type ...

    What is really sad here is that I had to do this to prove to you how flawed your logic is...

    Numonic, this isn't the 30's we, the world, doesn't depend on physical cash...

  41. Anonymous says:

    And when I say all transactions, that even goes for those above the 10+ million mark...

  42. Anonymous says:

    To Anon: strange things happen in interesting/uncertain times. Did you hear about the investor buying up 90% of tin on LME, which just sits in warehouses across London? That's an ultra speculative position or maybe someone just wants some hard asset. It doesn't have to be rational in just has to be in large enough amount to spark a panic.

    I am sure when paper note was introduced in the past and people started using them instead of coins (gold, silver) because paper was easier to carry, people were just us happy as we are now, when we use digital cash. But that fact didn't deter the hyperinflation event.

    It may turn out that Nnumonic has a valid point. I would like to explore this further of course and am interested how Numonic explains why he thinks FDIC operates with physical cash or why he thinks China buys USTreasury bonds with physical cash he mentioned a fewweeks ago

  43. Anonymous says:

    this place is getting ugly

  44. Numonic says:

    I'm in a rush and will say more later but for now all I have to say is that the electronic part of the base money is only what the banks give to the Fed in exchange for the physical money. The Fed exchanges physical cash for the banks electronic assets.

  45. Numonic says:

    Anonymous it's obvious you are not reading what I've been typing. The simple math of 1% of one million is larger than 1% of one thousand proves that there can be a run on cash without the panic that you say has to happen.

    How anyone can question if FDIC operates with physical cash is beyond me.

    I have broken it down to the bone, if you can't understand it, you are simply not even trying to understand it.

  46. Anonymous says:

    @Numonic

    "Anonymous it's obvious you are not reading what I've been typing."

    LOL!

    LOL!

    LOL!

    LOL!

    LOL!

    LOL!

    x3

  47. Anonymous says:

    Quick question on the dollar collapse. regardless of the cause, what happens if the currency does collapse? What becomes the new currency? The Amero? Something else?

  48. Numonic says:

    Well Anonymous I don't trust any debt based currencies right now because I see all current currencies following either of the 2 destructive paths. I see most currencies collapsing through default(read up about the world wide Quantitative Easing going on) and the rest collapsing through too many chasing too few goods(mainly due to world producers becoming consumers faster than world consumers become producers). So all debt based currencies(which today are all paper) will return to their intrinsic value. So that means if you're looking for the best safe haven, you have to be looking at things for their intrinsic value. Precious Metals will do best because of their intrinsic value. As bad as I see things getting I'd even suggest hoarding copper coins. As far as what will be the next currency, I say it will be a mix of gold, silver and copper. Gold and Silver at first will be fighting for more valuable status but after some time gold will be more valuable because it is more rare in total supply.

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