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The lost money is borrowed money which wasn't real money to begin with except money as debt. Most of the world's financial system is based on money as debt. If it's the debt of a sovereign country in its own currency it's ultimately paid off by that country's central bank pushing a button creating more of it. The United States did the opposite in and about 1930 by contracting the money supply precipitating the Great Depression along with the help of the Smoot-Hawley tariff which then went world-wide. That depression was re-invigorated around 1937 by raising taxes.

Here's the danger ranger: a lot of countries have debt in another country's currency, especially the US dollar. Most public, I think, the rest private. The dollar is the gold standard for stability of value. It may be ultimately bogus, but that's the way it's seen now. The yen represents over double the public debt per capita than the dollar and Japan is a smaller economy. The pound is too small an economy. The Chinese currency is for China and things are too opaque or crazy things that pop to the surface with regularity. The three biggies are the dollar, the yen and the euro. Here's the euro kicker: all euro countries are no more than states in the United States respecting money sovereignty except Germany. A state in the US cannot pay its debts by pushing any button. Neither can Puerto Rico. Neither can Greece. Neither can any country with debt not in its own currency. We (oops!) are talking about international monetary system stability. This stability is not directly threatened by any truly sovereign country respecting its comportment to itself for all these countries will push money creation buttons until the cows come home. They all learned this lesson from the Great Depression. That they learned only half the real lesson and are still screwing up with the rest of it is why the world keeps moving closer to this world of shit we see in front of us. Anyway, of the three biggie countries, the euro is problematic and logically will, in say 20 years, become a purely German currency as European country after country takes back its sovereignty. You see, the euro was the Deutsche Mark all along.

--Brant

it was Barzini . . .

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A year from now, will will have a big laugh over hour implied predictions...

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The lost money is borrowed money which wasn't real money to begin with except money as debt.

Exactly.

The US economy is built upon the fantasy that debt is capital... which makes it vulnerable to inevitable cyclical returns to objective reality where only capital is capital.

Reality always prevails.

As long as people do exactly the same stupid things... they will get exactly the same stupid results they deserve.

Greg

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And the powers that be behave like those in the USA.

China's Central Bank to Provide Liquidity to Help Stabilize Stock Market (link; subscription needed for full article).

China's central bank will provide liquidity to help stabilize the country's crumbling stock market, according to a statement by China's top securities regulator late Sunday.

The People's Bank of China will inject capital into China Securities Finance Corp., which is owned by the securities regulator, according to the statement by the China Securities Regulatory Commission. The company will then use the funds to expand brokerages' business of financing investors' stock purchases.

The CSRC said Friday it would dramatically increase the company's capital to 100 billion yuan from the current 24 billion yuan.

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3349921566_672b99c98a.jpg

That's the perfect metaphor, Mike...

The economic atmosphere inside the bubble is artificially pressurized by the fantasy that debt is capital... until it bursts and the economy returns to the reality of ambient atmospheric air pressure that only capital is capital.

Greg

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And the powers that be behave like those in the USA.

China's Central Bank to Provide Liquidity to Help Stabilize Stock Market (link; subscription needed for full article).

The path is well worn. The template is set. The pattern is fixed... and the result is inevitable, because no one escapes the financial consequences of violating economic laws.

Reality always gets it's pound of flesh.

Greg

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There's a perfect storm brewing...

http://www.telegraph.co.uk/finance/china-business/11725236/The-really-worrying-financial-crisis-is-happening-in-China-not-Greece.html

Funny how practically the only media covering this is the telegraph. It's a better source for news than any domestic US media which is fully engaged in misdirection:

"Hey look over here, It's Greece!" :laugh:

Greg

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The crash of 1929 marked the beginning of the Great Depression but did not cause it. In this case we can let the Chinese worry about China. Then, as now, it's the United States that matters. The similarity between then and now is overuse of leverage. This time it's the Chinese grossly overusing it. Any depression in China will not migrate. There is another possibility, however, and that's war. Just like back then. The US didn't start WWII, but might end up in a big war with China, one it didn't start but China did against Taiwan. The US would likely lose several aircraft carriers in the first 24 hours.

--Brant

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The crash of 1929 marked the beginning of the Great Depression but did not cause it. In this case we can let the Chinese worry about China. Then, as now, it's the United States that matters. The similarity between then and now is overuse of leverage. This time it's the Chinese grossly overusing it. Any depression in China will not migrate. There is another possibility, however, and that's war. Just like back then. The US didn't start WWII, but might end up in a big war with China, one it didn't start but China did against Taiwan. The US would likely lose several aircraft carriers in the first 24 hours.

--Brant

Well that is what the subs and stealth are for and the retaliation better be quick.

We almost got into it with the Yellow Peril over Quemoy and Matsu in the mid 1950's.

The First Taiwan Straits Crisis

11 August 1954 - 01 May 1955

During the First Taiwan Straits Crisis the Peoples Liberation Army launched heavy artillery attacks on the offshore island of Quemoy after the US lifted its blockade of Taiwan, making possible Nationalist attacks on mainland China. The Truman Administration had resisted calls by hard-liners to "unleash Chiang Kai-shek." But shortly after his inauguration, on 02 February 1953 President Eisenhower lifted the US Navy blockade of Taiwan which had prevented Chiang's force from attacking mainland China. During August 1954 Chiang moved 58,000 troops to Quemoy & 15,000 to Matsu. Zhou En-lai declared on 11 August 1954 that Taiwan must be liberated. On 17 August 1954 the US warned China against action against Taiwan, but on 03 September 1954 the Communists began an artillery bombardment of Quemoy, and in November, PLA planes bombed the Tachen Islands. On 12 September 1954 the US Joint Chiefs of Staff (JCS) recommended the possibility of using nuclear weapons against China. And on 23 November 1954 China sentenced 13 US airmen shot down over China in the Korean War to long jail terms, prompting further consideration of nuclear strikes against China. Despite domestic political pressure, President Eisenhower refused to bomb mainland China or use of American troops to resolve the crisis. At the urging of Senator Knowland, the United States signed the Mutual Defense Treaty with the Nationalist government on Taiwan on 02 December 1954

And we always thought then that we would have to face off in a war with China.

A...

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USA 2007-2009--the govmnt just poured in liquidity. Buffett said he was buying equities in late 2008. The market bottomed in early March 2009 and has been going up since without any significant corrections. China has to do a lot more than the US did. They are trying but in very ignorant ways. For instance, trading has been stopped on 43% of the stocks. It should have been all or nothing. Why? Because if you need to sell to raise cash you'll sell what you can or be sold out. This means tremendous additional pressure on the 57% still trading. Shanghai is still up 5% compared to a year ago down from 150% up from a year ago. I don't think it's over. Why? Too many traders and investors who were supporting prices a year ago have been wiped out. In that sense it's somewhat like what happened to the US real estate market after 2005. If you had put $20,000 down on a $200,000 house (2005) that's 10 to 1 leverage. In the US stock market, unlike the China stock market, your maximum leverage is 1 to 1. The house price drops 50% you're not wiped out if you can afford to keep up the payments--just underwater--and if the market value recovers to 170,000 you're still underwater--x all other friction (no need to go there but re commissions are usually about 6%)--$10,000 (well over $20,000 actually). From the end of WWII to the end of 2005 re was a continuous momentum investment in the United States. The greater fool was always there to bail out the previous greater fool. Musical Chairs that didn't stop playing for 60 years and would have kept going for a while longer if the govmnt hadn't decided everybody should be a homeowner 2000 onward. The philosophy of Barney Frank helped so well by Alan Greenspan who still must be wondering why John Galt didn't take that job so generously offered by Mr. Thompson. (Mr. Truman?)

--Brant

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The crash of 1929 marked the beginning of the Great Depression but did not cause it.

Yes.

A consequence of believing debt is capital, but not a cause of that belief. 2008 and its aftermath will also become known as a Great Depression by September this year.

It's the Perfect Storm to wash away the unethical something for nothing gamblers... and why Noah had his ark already built even before the clouds gathered.

Greg

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And we always thought then that we would have to face off in a war with China.

A...

It's strange that the Chinese theft of millions of Federal Employee personnel records wasn't considered an act of war.

I'm glad cyberwar is the new war... way less messy and even inconsequential if you're not net dependent. :wink:

Greg

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And we always thought then that we would have to face off in a war with China.

A...

It's strange that the Chinese theft of millions of Federal Employee personnel records wasn't considered an act of war.

I'm glad cyberwar is the new war... way less messy and even inconsequential if you're not net dependent. :wink:

Greg

Correct Greg, however, you would have to have a Chief Executive Officer of the United States who had the concept of "war" as an understandable concept.

We do not.

Therefore, this attack on American citizens and it's government is viewed as just another piece of the struggle to transform this nation.

What amuses me today, as it did the night that candidate O'bama stated clearly that he was going to transform America, is that folks still do not understand that he meant every single word of that statement.

He has transformed close to 40% of the economy and has set in motion the seeds of administrative control that grows every day.

So the war that this President cannot see will get very messy very quickly, sad to say.

A...

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And we always thought then that we would have to face off in a war with China.

A...

It's strange that the Chinese theft of millions of Federal Employee personnel records wasn't considered an act of war.

I'm glad cyberwar is the new war... way less messy and even inconsequential if you're not net dependent. :wink:

Greg

Correct Greg, however, you would have to have a Chief Executive Officer of the United States who had the concept of "war" as an understandable concept.

We do not.

Therefore, this attack on American citizens and it's government is viewed as just another piece of the struggle to transform this nation.

What amuses me today, as it did the night that candidate O'bama stated clearly that he was going to transform America, is that folks still do not understand that he meant every single word of that statement.

He has transformed close to 40% of the economy and has set in motion the seeds of administrative control that grows every day.

So the war that this President cannot see will get very messy very quickly, sad to say.

A...

Yeah... Obama can't even effing name the enemy! :laugh:

In my opinion that's because they both share the same hatred of American values. But don't forget the majority of the people living in America today who elected Obama also share that same hatred.

What's the bottom line in the light of the impending confluence of all these unfolding political and economic events?

BUILD AN ARK...

NOW

Greg :wink:

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Several of the responders on this thread have been proven correct. Way to go. What a difference a day makes. Now based on your success and the SUPPOSED reason for the US stock market shrugging what will happen tomorrow?

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I remember that. The Nationalists were using early Sidewinder missiles to shoot down Chinese Migs.

--Brant

Maybe you would know Brant...I have always want to track down the quote that Mac Arthur allegedly told to President Kennedy, who contrary to every Democratic President after Kennedy never put his ass in the line of fire.

"Anyone wanting to commit American ground forces to the mainland of Asia should have his head examined."

Did you ever hear that Mac Arthur said something like that? We used it heavily in the '60's in draft arguments and debates as well as opposition to a war with our forces being hamstrung by "policy."

https://books.google.com/books?id=KS-6XrdalGkC&pg=PA102&lpg=PA102#v=onepage&q&f=false

It refers to a footnote 43 and I cannot seem to navigate to it.

A...

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I remember that. The Nationalists were using early Sidewinder missiles to shoot down Chinese Migs.

--Brant

Maybe you would know Brant...I have always want to track down the quote that Mac Arthur allegedly told to President Kennedy, who contrary to every Democratic President after Kennedy never put his ass in the line of fire.

"Anyone wanting to commit American ground forces to the mainland of Asia should have his head examined."

Did you ever hear that Mac Arthur said something like that? We used it heavily in the '60's in draft arguments and debates as well as opposition to a war with our forces being hamstrung by "policy."

https://books.google.com/books?id=KS-6XrdalGkC&pg=PA102&lpg=PA102#v=onepage&q&f=false

It refers to a footnote 43 and I cannot seem to navigate to it.

A...

Adam,

I'm not able to add the image of the page but the reference is:

"The Bay of Pigs Invasion: A Comprehensive Chronology of Events," in Bay of Pigs Declassified, edited by Peter Kornbluh (New York: New Press, 1998), pp. 269-70.

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