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Russia overtakes China in gold reserves race to end US dollar dominance
Topic Started: Feb 26 2018, 11:27 AM (383 Views)
Siberian
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the trick with the debt is that taking a credit you increase your consumption only once, let us say - for 1 year. then you have to reduce your consumption to pay off the debt.
you may not reduce consumption (what really happened) , but you have to increase your debt, and you'll return to nessesity to reduce your consumption even more in 2 years.
or to incrrase your debt even more, and your debt must grow in not a linear way, but exponentially, with acceleration.
not 2-4-6-8
but 2-4-16-256-65536
if your interest rate remains high or even the same you of course goes bankrupt in the very beguinning of this process.
but you may postpone it if you decrease your interest rate - and it actually happened in the US, the debt grew, but interest rate was falling and annual payment remained the same more or less for 30+ years.
But when you come to the natural limit - zero - you 1) kill your bank system which cannot work with zero or negative interest rate and 2) you must find a way to subsidize debtors in some other way, not via %.
Like tax cuts suggested by "Trump".

The Fed pretends it raises the interest rate - then the government must directly subsidize all debtors.
The money is going to be thrown out of helicoptets on all debtors...

Anyway, as you can see the US bank system, the economy is on life suppirt, a dead alive, it has already reached zero interest rate and the SYSTEMIC character of the crisis is not overcome, the debt keeps growing, the government cannot drop interest rate into negative territiry, quite contrarilly, to keep all you zombied it must talk and even simulate raising %.
But as mathematics say - either debt or direct subsidies must grow exponentially.
So, the US federal budget deficite is goung to explode and start grow with acceleration.

The US economy is finished.
Just since the US managed to seize and dominate the Whole workd and Dollar is still the World trade and reserve currency - the size of World economy smoothes the collapse, it lives sucking blood from small still not overdebted economies, exploiting their reserves of stability.

Until some Russia or China stops accepting dollars, declaring own currencies or gold as the only nean of exchange.
And then you and the World economy will collapse. Both China and Russia still do not do it since we are in the same boat, and even if we suffer less than the West - we will be hit very hard too. We are also hostages.

But as soon as our reserves are substituted with gold, our industry gets more self-sufficient (thanks to sanctions too) , and if Russia encounters real agression - I think it may trigger unilateral action whatever consequences are.
Edited by Siberian, Feb 28 2018, 05:42 PM.
Goood morning GULAG!!!
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Robertr2000
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PATruth
Feb 28 2018, 03:19 PM
If our currency collapses I want land, guns, ammunition, a power source and plenty of food. Gold is a pretty worthless commodity when it comes to survival.
And women.
"if that **** wins we'll all hang from nooses"
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PATruth
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Robertr2000
Feb 28 2018, 06:06 PM
PATruth
Feb 28 2018, 03:19 PM
If our currency collapses I want land, guns, ammunition, a power source and plenty of food. Gold is a pretty worthless commodity when it comes to survival.
And women.
Of course, that goes without saying..
"No. No he won't. We'll stop it."
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Siberian
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so, developing my explanation - why collapse of the US/World economy is inevitable.
even without debt pyramid cyclic crisises of overproduction are an integral and inevitable part of any capitalist economy.
and every time consumption, production, GDP are to fall by certain % to let the least efficient bankrupt.
There are short, long, various cycles (discovered by a Russian economist Kondratiev), sometimes their culminations, of small and big ones coinside to create Great depressions like in 1929 - even without debt pyramid.

in early 70s the US was at doorstep of the big cyclic economic crisis, while it was the peak of the Cold war, Soviet economy was in its peak shape, more and more 3d World countries were joining Soviet camp, so the American establishment could not afford itself a crisis of 1929 scale, so the establishment decided to stimulate US economy with credit expansion.
the Fed eliminated the golden standard in 1971, which allowed it to expand credit emission by multiple times. Money became endless and potentially however you wish cheap. Now you could create any amount of money and boost cobsumption -> economic grouth.
But as I said before - in this model of debt driven growth without exponential growth of debt you very soon have to cut consumption/production to pay off the debt plus you will face the previously postponed cyclic crisis and your debt payment - related cut of consumption will aggrevate the cyclic crisis.
i.e. having stepped on the path of building the debt pyramid - with every year the exit will be more painful and devastational. And at some point you pass no-return point when it will be not just painful but leads to total collapse of economy, started with mass bankrupcies -> collapse of bank system -> deflationary collapse of multiple 1929 scale turning in your/our case into hyperinflation since central banks expanded monetary base far beyond normal proportion -> collapse of first international and then domestic trade -> desintegration of both international and national industrial cooperation chains.
After point of no-return is passed the goal of elites changes from preventing to postponing the final crisis at any cost, even if it means greater destruction, because no elite can survive as an elite a crisis of such proportions. The goverent will either have to kill a considerable part of own population and to establish GULAG style regime to keep the population under control or will be hanging on the trees which is much more possible since nothing will be working properly, including the army and police, no salaries will be paid or if paid - becoming worthles as in Zimbabwe or Russia in 90s.
This makes every sell side talking head in your TV talking about ecinomic growuth, about gold being useless dirt etc.etc.

niw I hope even v4r understands :)
I could not resisting the pkeasure of explaining to you why the US us inevitably to have such a crisis.
If you eish I can explain how the final collapsecis going to develop in dufferent countries :)
and with what will end


Edited by Siberian, Mar 1 2018, 03:47 AM.
Goood morning GULAG!!!
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