It’s Official: The Crash of the U.S. Economy has begun

ok couldn't wait to post till october

the federal reserve has a dillema , it fears cutting intrest rates to help falling dollar, because they would'd further KO subprime mess and hurt stock markets

however if the fed were to raise rates and help protect the falling dollar, it would do 2 things it would protect the dollar and this would keep price inflation at bay in the united states which for the large part it has been.


the united nations has stepped into to try to negotiate a orderly escape from the dollar to keep a world-wide recession at bay, but the wealthy elite holding these dollar assets were never known to do something in the greater intrest of the masses

but anyway it is intresting that THE u.s press has not said MUCH of anything about the UN story (over a month old)

ASLO the BIS the world's central banks headquarters (head bank) says that intrest rates should rise in the country's with the largest deficits (they said this in the annual report that came out last week) again with little fanfare. wonder why? but the central banks do not always follow big brother's analysis and may analysists are calling for the opposite (rate cuts) because of how deeper and widespread the mortgage housing probelms are becoming

this will test the dollar support level and probably why the united nations urged a orderly slow withdraweral from the dollar, lets see what happens



[edit on 25-7-2007 by cpdaman]

There is no doubt the US dollar will continue to decline in value. There is no doubt the euro will become the new world currency standard as the US dollar is reduced to peso status.

The simple fact is the US federal govt. is bankrupt and your average US citizen has a net worth of zero. The wealth is concentrated in the hands of a few elitists and everybody else has nothing. These elitists have been moving out of dollars and into euros for 6 years now. Everybody from central banks to sultans have been getting into euros and dumping the dollar. Russia has been telling its citizens to sell dollar investments and get into euros and gold for 3 years.

The sad fact is most US citizens don't even realise their net worth is zero. They don't know their pension plans were used to back subprime loans that are now worthless. They won't be getting a dime from those. The social security trust fund has been raided....they won't be getting a dime from social security. Their only other investments - their houses - are actually losing value in real terms as the dollar continues its long downtrend. What is left?

The US has been sucked dry. Most US citizens are nothing more than financial slaves. They work as hard if not harder than anyone else yet they have no national health care system, no free tertiary education system, save absolutely nothing and in the end have absolutely nothing. Where do all those tax dollars go? Why is every other developed country running massive federal government surpluses, providing free health care and education and taking care of its citizens?

We have all been duped. Don't be a financial slave. Do not go into debt, live below your means, start saving at once and most importantly diversify your savings OUT of US dollars.

well no doubt the dollar has fallen of late, but wether or not that will continue thru the next few months is yet to be seen. some anaylsists call for central banks to unite to support a dollar that has fallen to an area of critical support

regardless 65% of the world's current central bank reserve's are $$, the euro although gaining ground is far behind, although it may be that the dollar fall's and instead of being "replaced as world reserve currency" it shares the spotlight

either way as long as commodities (OIL) are prices in dollar's the devaluation of the dollar (which is what congress is saying when it claims the chineese yuan need's to appreciate) will continue from increasing the printing presses, it is just wether or not the other central banks step in to provide support for a dollar that is being devalued. th

as long as comodities are priced in dollars and the dollar is being devalued you can bet that OIL prices (stocks) will RISE at least in Value. on a side note the DJIA is down almost 400 points today. so besides oil stocks and a few commodities i would say get out of DJIA diversify carefully.

central bankers supporting a dollar will hold off a world wide recession, the dollar index value may fall a bit , but support could still be found in the neighborhood of 75-78 if that is what the banks want.

U.S stocks will probably fall like i said in this thread earlier to a position near 12,000 which would be about 15% decline since the summer top.

the fall in the DJIA to 12,000 will have profound psychological effect on investor sentiment (duh) but this is often underestimated.

the biggest threat to the world financial system is the severe debt (which has created an illusion of wealth) as well as the de-regulation of the financial system which resulted in the Dervivatives Market which is complex and accounts for around 600 trillion, not to mention 60 trillion (larger than the world's GDP!)of that is on shaky ground and related to mortgage backed securities.

[edit on 26-7-2007 by cpdaman]

That is the bottom line. The people who have the most to lose are the ones fighting to keep their nest eggs safe. They are also the ones who control the system.

People like myself who have nothing to lose, could care less what they do to try and protect their greedy hords. They already took what little monies I had saved.

The Government is just as guilty of this as anyone. It is the system that will suffer the most. People will still go on living.

I was in import/export for 10 years in the 1990's. I saw it then. I felt that I might see it in my lifetime. I had a stroke 2 years ago....I am still kicking, so that might be a possibility yet to see.

end rant

Just know that I am still reading this information, and finding it relevant.

Ok what to look for in the coming days, weeks, and months

well when the 2'nd quarter GDP forecast comes out tomorrow if it less than the forecast amount of 2.7% there will be a drop in the markets

the bigger issue is what will Ben Bernanke and the Federal Reserve do later this summer/fall with intrest rates. thinking worse case scenario he could take weak GDP report like this;

"well growth in the second quarter moderated slightly more than forecast but significantly increased from the first quarter, and we expect this trend to continue albeit slowly due to the continued drag in the housing sector , but as we move forward into the summer we will focus primarily on the upside risk's to inflation which are in regards to some of our indicators getting a bit out of our comfort zone.

what this would due is two fold. the stock market will drop if only a 2% gdp report comes out, regardless of what bernanke says later about it. and worse if that (transpires) and his biggest concern remains inflation then that signals he will likely Raise intrest rates in the summer/fall and this will put a further squeeze on the stock markets, the consumer and liquidity, which will lead to a recession IMO

also if he cuts rates, the dollar will be hurt and it is already looking injured , what they need is central bank intervention around the world (Like the U.N) were calling for earlier in June, because a rate cut would help the economy and the housiing situation (but be plausible if only central banks around the world supported the dollar, and thus the global economy) i know alot of this sounds like gibberish and confusing, and they may just hold steady longer and do nothing with rates , but the central bank of central banks the BIS in it's annual report last week said they recommend rate hikes in country's with large deficits and sighted some of the bigger risks could be a big fall in the u.s economy (funny this did not get much media attention)

good news this morning (didn't think i would say that did you)

GDP forecast came in above forecast and even better news is inflation (core) was lowered significantly from 2.4 to 1.4 %. this should keep the fed from raising rates for a while

It does seem to be a matter of time.

You keep digging fill out of a pit, to shore up the edges of the pit. Sooner or later, you will be in big trouble if the pit starts to get swamped.

That is the best way I can describe what I have seen as the probable future for the USdollar. Why the USD, that is what the traders in the international import/export market use as their base currency.

I am wondering how long it will take to change to the EURO or something else, for use as the currency of choice for international trade? Has that already started?

I would hate to use the USD as the currency of choice, on a letter of credit worth $1,000,000, for an import/export. That happened to an Ostrich export insurance claim. I was lucky that it went in my favour to the tune of 50,000 dollars. Had it gone the other way, I would have lost monies on the export.

apparently the "good news" was not really good news the dow dropped 200 plus, and the key is the credit is drying up, and when the switch is flipped, the switch is flipped

i'm afraid the market will continue to fall at least thru 12,000 maybe more , the brokers telling there clients to hold and wait it will lift back up and then some are selling hot air.

the fed well who the heck knows what they will do but the funnier things is secretary paulson announcing a few weeks ago , that this is the healthiest economy he has ever seen. i don't know who he thinks he is kidding ( i think he went a little over the top on that one lol)

anyway history shows many public "servants" being trotted out to the public saying all is well before a big fall,of course to manage public perception, and buy some time for those who know what's going on to get out, and to keep the gullible public well , waiting for the ball to bounce back up

what i am waiting to see is how the standard of living for those not getting a beating in the markets goes, because i am concerned that prices may go up and the consumer's will be out of gas and unemployment may run rampant over the 2008 year. because i see the stock markets signaling a major swing in wealth from the "west" to the "east."

the currency (USD) i'm not sure, so many people are saying down down down that i wouldn't be surprised when world markets are shaken to see them flee toward the dollar, (and only the insiders may be leading the way) i mean, again what will else will they flee 2, the EURO? if the euro rises much more , the foreign country's who's exports are priced in it will become....a bit tuffer to sell so ...

the world's financial system's may be more delicate and interconnected than most think

so houston.....we may have a problem

so that is why the world central banks need to have a co-ordinated effort to prop up the dollar or we will have a global problem with gold probably sky-highing, i think they are trying to co-ordinate a steady fall and not a free fall of the dollar.

so i see the safe haven being gold, and if you live in the united states the party may be over now, although depending on a slow exit from the dollar, you may have almost a year

but the biggest threat is the russian announcement to sell oil in rubles instead of dollars starting, the first half of next year this is on top of iran asking japan to pay in yen instead of dollars.






[edit on 27-7-2007 by cpdaman]

[edit on 27-7-2007 by cpdaman]

This is all very fascinating and reminds me how interesting I found economics to be when I was studying it to graduate High School. People talk about ideology or religion being the driving force behind change and behind war, but the truth of the matter is that resources, AKA MONEY are what drive it. I only wish I had the education and the financial means to truly digest this information and then maybe do something about it. Unfortunately what little wealth I had (about 3,000 dollars) was used up paying the rent on my mother's apartment for two months, paying for the internet, and buying groceries. In a few weeks I'm getting a cheap apartment with my friend (and I'll have to find a job since I'll finally be somewhat stable) but it's back to square one.

look for another stock fall off, starting this week , the model for this drop may be 1987

Surely , as an Ameriican and capatalist , a protaganist for a free market , you should not decry the Iranians for wanting to sell their own resources for whatever they wanted, be it bananas or Yen or Euro's. But you do want to, you want to see 'strong arm' tactics used to 'preserve your way of living ' .

You know what that means of course , people die .. lots of them . But that is ok, long as the US military is there to preserve your way of life should a country go about deciding to sell it's own products for whatever it chooses to barter in exchange , always there to bomb them back to dealing the way you want them too eh ?

America , capitalism and the free market, can't beat it . More like the Mafia everyday .

If you want to use military might to dictate market forces , you cant go around pretending to be some 'do good' american, your a more in line with the nazi party of germany circa 1940 , trouble is, there are a lot of americans just like you , and is the reason you are becoming the lepers of the rest of civilized society . Nobody looks upon america as a decent society anymore , they distrust it , they despise it . One day when the likes of you that would cause death to others for your way of life to be preserved are gone , america too will despise it's past .

[edit on 1-8-2007 by Gun Totin Gerbil]

[edit on 1-8-2007 by Gun Totin Gerbil]

[edit on 1-8-2007 by Gun Totin Gerbil]

Originally posted by cpdaman
look for another stock fall off, starting this week , the model for this drop may be 1987

well...the futures are down.

I did read that if the markets end up lower today, it would be 10% correction in total so far.

IF the markets continue to fall after that, expect a 15-20% correction in total.

Hey Gerbil

The irony of that is a majority of US nationals feel the same way about their leaders. Right now, the way things are set up, it is minority rule. The president is pretty much a puppet for the system. That system is ruled by a few people, which has nothing to do with elections.

I look forward to the collapse. Not because I want to see people hurt, but that is the only way to get rid of the parasites. Cut off what feeds them $$$$$$$$$.

We could send them your way.

Yes, gun totin you are correct in assuming our (american) way of living is not decent anymore. The concept of free market capitilist society is the greatest concept I know to be the key for survival. The problem is that, like many great civilizations, kingdoms,ect. before us, we were founded on great principles, but the wrong people took advantage of these principles to meet their own ends. We did not elect Bush, I dont care what anyone says, I did not, and noone (except for my super naive parents that is) did elect him. But how did he get in the position to be elected in the first place? Exactly!!!! When we as true Americans live in a 'real' capitalist society then it will be legit, because the people who work hard for what they want will get it, and those who dont will not. Unfortunately when we have a seriously screwed welfare system, and we have lazy little s%#ts getting inheritance for something they lifted no finger to achieve, well then, we end up the way we are now.
'Dont hate the playa, hate the game' (sorry, but that slang quote seemed to fit)

You only thought it was your money!!

Bear Stearns and Company has decided to liquidate their two troubled hedge funds in the Cayman Islands instead of NY. This will hamper the creditors' and investors' ability to get their money back, and they will more than likely get much less back. Of course, the 2005 bankruptcy law is helping them in this!!

www.bloomberg.com...

And, then, Frankfurt Trust, the mutual fund manager of Germany's BHF-Bank, has halted redemptions on their FT ABS-Plus fund....which of course includes residential mortgage-backed securities.
The decision to stop the withdrawals from the fund was made after the investors removed 20 % of their investments. To have more withdrawn would have forced the Trust to liquidate the securities for far below their fair value.

www.bloomberg.com...

It kind of reminds me of the good ole days at the end of the roaring 20's when all were enjoying their glorious porsperity and then all of a sudden........
the banks closed their doors and wouldn't let anyone have their money back!

Gun Totin Gerbil, currently America is no longer a government of by and for the people, instead it is a government of by and for the corporations. Americans aren't the problem, capitalism is not the problem, but corporatism is.

Did you all see Cramer freak out? Holy cow!

www.youtube.com...

Cramer should not be surprised (and i don't think he is....just PO'd)

if you listen closely to him he is asking the FED's Plung protection team to Buy large amounts of futures to squeeze the shorts....trying to bail out his buds

The federal reserve is run Privately by international bankers

they do what's best for them , and a healthy U.S economy has been for awhile (and for the globe as well) but ....right now a U.S dollar may not be able to handle a rate cut which will potentially shake the foreign markets (global markets) while providing those at home a needed respite (while potentially leading to higher inflation as a result of a dollar sell-off down the road)

they are trying to co-ordinate (among the banks) a slow erosion away from the dollar, and a rate cut would not help this, once you realize they have no affiliation with the u.s government this should be easier

and it will be more fun (based on the speech they made yesterday) to continue to downplay and mention in passing the economic indicators while playing the inflation card to it's fullest ....i am now fairly confident that a rate cut will not happen

there worst fear is a global deflation but they will say inflation, when cutting rates may deflate the dollar and cause a deflationary global recession, so they say inflation is there chief concern but ironically do so to justify a policy that supports a global currency (dollar) which provides the infastructure to continue the global inflationary policies

[edit on 9-8-2007 by cpdaman]

also it is most important to understand there is a large disconnect in the stock markets in regards to being a reflection of the U.S economy

from globalguerrillas.typepad.com...

The disconnect between corporations on the stock market and the fortunes of US denizens grows This is a good quote from a money manager: "The distinction between US companies and foreign companies is getting very hard to draw." Companies like IBM, Coca-Cola, and Intel – all among the 30 in the Dow Jones Industrial Average – derive well over half their revenue stream from overseas.

what is also important to watch is the Chineese stock market. should this market collapse and many think it is unsustainable the chineese will sell the huge mound of dollar holdings and the dollar will fall, the question is what will the FED DO THEN

[edit on 9-8-2007 by cpdaman]

Originally posted by Ironside

Originally posted by Equinox99
Do you guys think the collapse of the US will cause effects to other
nations?
I heard that China has lots of US bonds and such what would happen
to their money?

Effects? You want to hear effects?

Though many of you may disagree with me, the United States IS the police of the world. This would cause a collapse in peace among countries and attacks would be much larger. Wars wou;d break out and billions would die.

To the China comment: Seeing as it is invested so much in the U.S. China would also fall, creating poverty throughout the worl.



"I don't know what weapons they will use in WWIII, but WWIV will be fought with sticks and stones."
--Albert Einstein

First I have to say I love that Einstein Quote, that's my favorite by him. Second I do agree with you, the U.S. Keeps a lot of the world in check, without us I can see a sudden out break of war, not only that but all out war in the Middle East, Without the U.S. many countries over there will do there best to get to Israel, and thus giving rise to the biblical predictions of the end times (if you believe that stuff.)

however that's just what I see happening, who knows what really will happen.

the thing with the treasury bonds being held by all the country's and particularly China and japan is that if china sells it's shares they may not in fantasy land have a giant piece of the pie, but in reality land if they sell there shares that will effect market PSCHOLOGY and cause other country's to sell off before they are stuck with a pile of worthless dollars

inflation will really effect everyone's quality of living, much more so than the coming stock market decline to 11800 or so, which will most likely pick back up a bit after that but trail other markets for certain.

now other markets are following the fed's inflationary policies with bubbles being built up as opposed to allowing natural corrections (recessiions) to occur, because the people elected know that they will not be re-elected if they allow a natural recession to occur.
So the world may get caught up in a large inflation driven boom in the next few years (sans U.S.A) and then ......well.........we are sorta in uncharted territory unless you consider the dark ages something you can remember.

look for China to bite the bullet when there markets slide (hopefully) and the u.s congress to back away from the stupidity of there ideas

FAnnie Mae is going to be secretly monetizing the mortagage backed security's debt which will provide a floor for securities and money to lenders who without this bailout would go belly up and the contagion would spread worldwide.

this large infusion of money maybe funded by the usual suspects at least at first, but look for a slow diversification from oil prices in dollars and a gradual increase in importing inflation over the next couple years, as opposed to the usual exportation of inflation they american's have enjoyed over the last few decades at the expense of asians and opec country's citizens.

a possible problem will be when russia launches it's oil bourse as well as the chineese stock market "correcting in 2008.

the dollar should have a long slow fall

[edit on 9-8-2007 by cpdaman]