The SHTF Turning Point Quietly Happened, Last Week – Have you been Paying Attention?

I read about this last week - so now I am going to insert it

U.S. may be forced to issue the Treasury bonds in Yuan.

from link:

www.kitco.com...

USGOVT YUAN BONDS

The concept can be described in very simple terms. The vehicle is devastating in its effects and consequences. What are they exactly? The USGovt might soon issue bonds, except not in US$ denomination, but rather in Yuan currency. Out of the gate (with debt signposts), the USGovt must purchase gigantic swaths of Yuan and pay with USDollars. The result is a quantum decline in the US$ exchange rate relative to everything holding the Yuan together. The Chinese decided in 2005 to tie their Yuan currency to a basket of currencies, led by the US$, the Euro, the Yen, the British Pound, and a small additional group. So the direct purchase of Yuan by the Untied States, the newest upcoming member of the Third World, will have numerous profound effects to lift other currencies.

The direct consequences of USGovt Yuan Bonds would be vast, visible, lethal:

The USDollar exchange rate would fall with each debt issuance

The loan balance in USGovt debt would rise with a declining USDollar

The Yuan currency would be further established as a global reserve alternative

Continued trade settlement in Yuan terms would be enabled
Rise in entire cost structure to the USEconomy from commodity pricing
The risk of USTreasury Bond default grows with each passing new issuance

The Chinese want protection and assurance against the falling USDollar and even the growing principal risk of USTreasurys. Higher bond yields mean principal bond loss. Both currency and bond loss mean a powerful combined loss. Beijing wants protection and security in exchange for continued debt support. A Yuan-based bond issuance by the USDept Treasury, sold by the USFed would accomplish this to some degree. In a few years time, if the US$ exchange rate is 15% to 30% lower, the loan balance in Yuan terms would be unchanged. The cost to the USGovt grows by that percentage however. If the yield rises, then protection can be locked by means of making the debt securities of shorter maturity, like two to five years.

The Chinese have already been shifting their USTBond portfolio from long-term to short-term maturity. This has been the driving factor behind the rising 10-year USTreasury yield and the steeper yield curve. Perversely, the US banks enjoy a benefit. They can amplify their Carry Trade, borrow at the short end, invest in the long end, pocket the 2% to 3% difference, and even store their booty of bonds at the USFed itself. This is one reason the US banks are not lending to Main Street firms and households. They are too busy playing the USTBond Carry Trade under the aegis of the discredited US Federal Reserve. And the topic of Bank Consolidation has not even been raised, whereby the big US banks reverse the carry trade by buying up distressed regional banks.

reply to post by questioningall


Interesting, about a month ago I read in my favorite site government in crisis org that US was been advised to increase their holdings of Yuan.

The reason because it was the right thing to do right now.

Originally posted by KaginD
Thanks for the informative thread Q. I really enjoyed reading through the entire thread. IMO this is VERY bad news. I just started buying silver 2 weeks ago, I'm just hoping I made the right decision. I know paper money isn't going to be worth squat soon, obviously. S&F. Nice job

Good...I have a question for you.

Have you physically taken possession of the silver? Or do you just have certificates and records that you own silver?

I got into an arguement with a friend a ways back trying to make him understand that unless you have silver coins or ingots in a safe in your house...you havent been buying silver...or gold...or any other precious metal unless you physically have it in your possession.

I found this article that will explain the true role of the fed and central bank on the death of the dollar.

Inflation and the Dollar's Crash

Did you know that since the creation of the central bank the dollar has decreased 96% in 94 years?

Then you wonder why the government allow such a blood sucking vampire of the dollar keep running.

Conspiracy theories abound about the Federal Reserve's true role in our nation's economy and government, but, according to the above video, the central bank‘s main role is to keep Americans in a “perpetual state of debt.”

Because only 3 percent of America’s money supply is in actual paper currency, money is simply created out of a debt deposit and loan creation cycle, the narrator claims.

“For every deposit that ever occurs in the banking system, about nine times that amount can be created out of thin air,” according to the narrator.

Over time, this eventually leads to inflation as more and more money is added to the pool regardless of supply and demand for goods and services.

“The new money essentially steals value from the existing money supply,” the narrator says. “For the total pool of money is being increased irrespective of goods and services.”

www.economyincrisis.org...

reply to post by XKrossX


I physically have the silver sitting on the table next to me. I have been buying one ounce bars and half ounce coins. I wouldn't spend money on more paper with a 'promise". The way I see it, if SHTF and paper money is no more, I have metal to trade. Thats why I have only been buying half ounce and ounce pieces. I know people won't have change for my silver if I give them a 5 ounce bar

Thats why this thread grabbed my attention the way it did. I guess it made me feel like I made a good decision for once.

reply to post by questioningall


I had to chuckle reading your thread we were thinking the same thing I'm sure and chances are 1/2 the other people reading the thread were also.

I like to take it even a step further than even us buying our own debt.

In reality it's a bad sign. But to pad the books how hard would it be for the US to buy it's own debt by furnishing the money to do it to another country itself?

The federal reserve slips 25 small time countries some generated off the books cash (reason why the don't want an audit) and those countries buy our debts with 90 percent of the cash provided and then walk away with a profit.

If it was me and I was in some big time mafia in this situation it's exactly what I would do.

But to deepen the rabbit hole. At this point you use the CIA to overthrow those govt.'s to avoid having to pay the debt they bought back and effectively turned 90% of your debt into the 10% that the countries initially walked off with and the cost of black op programs to topple their leaders.

Disclaimer: This is just what I would do if I was evil, I know nothing, if CIA are reading this don't wack me it's all hypothetical lol.

reply to post by KaginD


Good work man.

Good thinking ahead. My thinking ahead was to stock up on some things to protect myself. Then I'll sell myself as a hired gun to someone or group of someones who need safety and security.

Although more and more I think I am going to get snatched up in the beginning before the things really kick off.

I see it all with my own eyes and I still find it hard to believe we are at such a broken crossroads as a country and civilization.

Its really sad and daunting.

Originally posted by KaginD
reply to post by XKrossX

 

I physically have the silver sitting on the table next to me. I have been buying one ounce bars and half ounce coins. I wouldn't spend money on more paper with a 'promise". The way I see it, if SHTF and paper money is no more, I have metal to trade. Thats why I have only been buying half ounce and ounce pieces. I know people won't have change for my silver if I give them a 5 ounce bar

Thats why this thread grabbed my attention the way it did. I guess it made me feel like I made a good decision for once.

I am curious about the silver coins. I've seen some decent deals on older worn low value collector coins that are probably worth more melted down. The thing is, is that I'm not sure we can do that....? any information on melting silver coins down as legal or not?

I was also told that foundry bars aren't worth as much. Makes me wonder if only certain marked bars will only be accepted.

[edit on 3-8-2009 by aleon1018]

reply to post by audas

Almost 18 months ago the swiss simply would not exchange it at exchange bureau's, this has spread right through Europe - they hate it and tell you to go and pull money out at the ATM

Over the last 18 months I've traveled all throughout Europe and never ONCE had any country I traveled through refuse to exchange my cash.

Not in the UK, France, Germany, the Netherlands, Sweden, Turkey - to name a few countries I visited.

No problem in ANY of those places.

Neither of course in Italy where I live.

Just sayin...

peace


[edit on 3-8-2009 by silo13]

reply to post by aleon1018


You don't have to melt them down to maintain their value. Those coins a 90% silver and maintain their value as long as you still see the engraving on the face of the coins. If anything maintaining them in original condition may pay off better than face weight value if you happen to find or they become rare collectible coins!

Zindo

reply to post by aleon1018


Honestly, I am kinda new at this. So don't bet on my word or anything. But I tend to stay away from "collector coins". I really don't know much about melting down metals either. I just bought basic coins and bars. The coins I have are Andrew Jacksons and on the back it says Liberty Lobby 1978 .999 silver. The bars have an eagle with .999 1 Troy ounce fine Silver written on it. I don't think that the collector coins will be worth much, but like I said, I'm pretty new at this.

people are always ready to proclaim the end of the bond bull market .....but there is so much b.s going on to keep rates low ...i.e big silent monetization by the fed that it will continue on....and GROW...the fed will buy all the darn debt up.....and the banks will keep adding to excess reserves since they get paid to......and everyone will be "befuddled"........rates don't scream higher yet.....and inflation doesn't soar crazily either.....must tick those off that are unhappy with the system and channel this unhappiness into the investors that are always eager to cry wolf on the bond and inflation fronts.

and i agree the b.s and shadiness of the system is abysmal but the new system we get when this one craps out will not bring us a higher standard of living

better off to drink all day ....pop med's like crazy.....err.... well i guess ......go to the ticker forum to vent isn't that bad....or just varying degress of painkilling willful ignorance mixed in with some reality shows or sports events or better yet a time to get close with friends and family....i am having less desire to look down on sheep these days.........the corruption runs soo deep......i have a growing sense that humanity has been thru this before in some way .........the twilight of a empire.......actually many "western or advanced empire's" and i think the path of least resistance will be a global system of have's and have not's ......with the latter being the majority...sort of like a global feudal system.........and this will probably not bring out the best in humans....instead of waiting for the empire to crumble.....make contingency plans if you can.....and enjoy it while it lasts

reply to post by silo13


I believe they are talking about oil and big businesses, not regular tourist bringing on their currency.

Even here in the US foreign currencies are acceptable in many main city stores.

But I believe you were not trying to buy oil right.

reply to post by marg6043


I think what Silo is reacting to is the sweeping and unsuported generalisations that the OP is known for.

"Many countries are refusing the USD!"
Codswallop - with Iran being the exception

And she did state that 18 months ago, the Swiss banks were refusing customers with USD!
More codswallop!

If anything, the world response to the Global crisis was to buy USD, as it is still regarded as the soundest currency.

People!!! Especially the newer members who the OP tends to like preaching to - please do your own research!!!! And don't just read the articles the OP has referenced!!

The Financial Crisis is extremely complex in nature. Just reading one or two articles that the OP has listed will give you a very skewed interpretation. Read broadly and despite what some on this board say, the leading main stream media articles, are by enlarge, the most informed and reliable!

For what it's worth, I am a professor of Economic History, and I can assure
that the Global Meltdown is too important an issue to allow yourselves to accept at face value the postings of someone who clearly has a very superficial grasp of the situation.

Matt

Originally posted by silo13
reply to post by audas

 

Almost 18 months ago the swiss simply would not exchange it at exchange bureau's, this has spread right through Europe - they hate it and tell you to go and pull money out at the ATM

Over the last 18 months I've traveled all throughout Europe and never ONCE had any country I traveled through refuse to exchange my cash.

Not in the UK, France, Germany, the Netherlands, Sweden, Turkey - to name a few countries I visited.

No problem in ANY of those places.

Neither of course in Italy where I live.

Just sayin...

peace


[edit on 3-8-2009 by silo13]

Silo13: I must first apologise to you for my tone in another thread. I judged you wrong and I am very sorry for that.

You are obviously an independent thinker - and a very sharp one at that!!


Kudos to you for pulling up the OP on her over-the-top, and unsupported generalisations. You are one of the few to actually take her to task.

I just saw this thread after reading the following.

August 01, 2009

Do Not Be Fooled, Another Major Economic Collapse Could Be Coming Sooner Than Many Think
by Robert McHugh

Stocks Markets world-wide are in a Grand Supercycle degree wave [IV] Bear Market. This is a huge Bear Market, meaning either in terms of time, or in terms of decline, it will be one for the ages. We believe it will be relatively short in time, but deep in decline. This Bear Market can take shape as one of three patterns, a massive sideways Triangle, a Flat, or a catastrophic Zig-zag. If it is a Triangle, it will be a pattern of five supercycle waves, and the low price has been reached on March 6th, 2009. That is the best case scenario. However, our fear is that we are going to get a Zig-zag pattern, with a potential downside target close to zero. Maybe zero to 1,000 in the Industrials, and zero to 100 in the S&P 500. Here is what we see:

Stocks are in the final wave of the eye of a hurricane of a Bear Market. The eye is the calm before the second half of a terrible storm. Once this spring/summer rally finishes, we expect a severe stock market decline again. That decline should be the end of the Bear Market that started in late 2007. This Bear Market is a Grand Supercycle Bear Market, one for the ages. The first part of the storm was wave (A) down, which lasted from October 2007 to March 2009. The Second of three parts, the eye, wave (B) up, started on March 6th, and this rally could last several more months. Wave (B)'s top could arrive around the 11,000 to 11,500ish area for the Dow Industrials. The third and likely final part will be wave (C) down, and will hurt.

Back in the Great Depression of 1929 through the 1930's, we saw a similar Zig-zag pattern. There was a crash in 1929, followed by a nice rally, but then the most devastating part of the market collapse followed into the 1930's. That Bear Market was a Supercycle degree wave (IV). The current Bear Market is one degree larger, which means it should be worse. There is great risk to the status quo political structure of governments internationally should this Bear Market follow the Zig-zag pattern. That is why gold is an attractive component investment for diversified conservative portfolios, as it has been considered a monetary equivalent throughout the ages, surviving the rise and fall of fiat currencies of nation state powers.

www.safehaven.com...

BTW, good work on gathering this info questioningall.

reply to post by mckyle

The retail acceptance or rejection of a particular currency usually rides on the developments in the money market. A few merchants who allegedly refuse to accept USD don't mean anything. The absence of the Chinese money men during the Treasury auctions signals something, though. But the record-breaking deficit the government is running these days is something quite disturbing. I believe it may be on the same level with the apprehensive look at the subprime bubble, as it looked at the end of 2006. Then it developed into major fiasco affecting the whole world.

Originally posted by KSPigpen
Now, to the uninformed, fearful perspective. (mine)

Mine too, Pigpen. I try to be informed, but I can't always be the most informed, and as for fearful, don't get me started.

It is so hard to know what to believe where the economy is concerned. As one that doesn't really have any money anyway, investments, gold, silver, they are all interesting discussions, but aside from the impact on the price of a loaf of bread, it's hard to see how they impact me.

Exactly, and that's the problem. The rich have the money to make those investments and therefore are not affected. They therefore, cannot understand the plight of the poor, who live paycheck to paycheck with bills and debt piling up. No health insurance, no gym membership, the cheapest, low grade foods, the worst life has to offer. They have no way out.

But the rich don't care about this because it can't be solved under their plans, which only serve to continue the downfall of America and stuff their pockets with rolls of cash.

The sad part is, some of the poor people think "oh, fine then, I will be a democrat and things will be great."

But they won't; the rich cannot be relied upon so heavily to pay for the poor's needs, and even if they all could and agreed to do so, it would only be for a short period of time.

The problem is, our entire financial system is a massive fruadulent pile of dogscat. Our Government too.

Until we correct and destroy the unbridled corruption, no plan will stop this country from bleeding to death, and we've been bleeding for over a decade now.

I understand that the US is in a BOATLOAD of debt. As far as I know, it's been that way for a long, long time. The government keeps spending, on things like war and weapons, and we keep amassing an amount of debt that is a number that before not so long ago, was not even a practical number, where money is concerned. It doesn't take an economist (thank God, cuz I suck) to realize that we are in a poop of a lot of trouble.

If we stopped spending on war constantly and weren't fighting two and counting now, we could afford to fix our roads and bridges, feed hungry, starving children, at home and abroad, we could afford vital medicines to the poor, we could do alot. But we don't Because we're America.

We are the war machine. And that's all we've ever known how to do. The rest of the world is getting sick of it, and I can't imagine the piss that will be running down our collective pants-leg when we hear WWIII declared and Russia and China and Europe pretty much as a whole all stand together. All of our piddly bullets won't mean jack then.

It seems to me like there have always been other governments willing to buy our debt, because we were thought to be good for it. Now it seems, by way of your report, that it isn't the case any more.

The World wised up to our shenanigans.

My first problem: There are those on here that tell us everything is fine and that historically, we HAVE to see an improvement, because that's what history tells us. I struggle with that because never in history have we had such a huge debt as a nation, so how could historical precedents apply? I'm told in a nutshell that if I don't think the economy is going to improve, that I'm an idiot. I'm told that things like unemployment, foreclosures, inflation, those are all things that FOLLOW swings in the market, and that the market has improved, or slowed it's decline, so everything else should be getting better too.

You're told by who? Exactly.

You're smart enough to know and seek the truth. So continue. Don't let them drag you down to their level, that's right where they want you to be. Don't let them ever pull the wool back over your eyes, now that you have pulled it off. You see through them.

That's the problem you are having, KSPigpen.

You see through their rhetoric and lies and you know the truth: unemployment, foreclosures, inflation, the falling possibly dying dollar, our national debt, the total lack of solution for peak oil and all the implications that follow, the global climate change, it all really does matter. It's not getting better anytime soon. (continued in next post due to character limit restrictions.)

We have our president and his cronies telling us things are looking better. We have others telling us that they can't find a job. They can't afford their mortgage, or rent, or utilities, let alone payments on THEIR debts. Whether or not they should BE in debt is not the issue, to me. Though it is very important and in my opinion our NATIONAL economy, represented millions of times in these defaults, it is hard to accept that the lifestyle encouraged in this nation for many, many years, was to accumulate debt.

It's just like what President Bush did, during his last 6 months in office, he simply denied constantly that there is a problem.

Just think of it this way, once, during Bush's second term, the economy began it's collapse, the media and governments went into OVERDRIVE saying "everything is fine."

Doesn't that set off your Spidey sense? It did mine. So I checked into it. And all the economists at the time when Bush and his cronies said "everything's fine" were saying "no, everything is not fine, in fact we are headed for a terrible future."

And over time, things progressed.

And before it was over, we were in this, what is feebly refered to by the media as a recession.

This is actually The Second Great Depression. History will prove my words. You unfortunately are wrong, it definately was and remains our lifestyle to accumulate debt. We are a country that doesn't understand the value of our own dollar.

Edit: Another thing I wanted to add here is that, what if the President just got on TV and said: "Okay. We're totally ****ed. There. The truth. Happy?"

THEN where would the economy be? You can definately expect that a President will NEVER say their country is totally ruined and their money is worthless and they can't pay off their trillions in debt. It would be literally the suicide of America as a country if that were ever to happen. Pray it never does.

So now, here we are. A small percentage of our population positioned to ride out what could be a complete disaster, and the vast majority of everyone else, set to wait in soup lines for a meal.

I guess I used my Second Great Depression line a paragraph too soon, but you're right about the soup and bread lines. What you're wrong about is the small percentage of the population.

Without the worker ants, everything grinds to an immediate halt. Who will pick the cotton for the shirts of the rich? Who will slaughter and butcher the animals for the gourmet to cook so lovingly?

Eventually, their money is only paper, which they can put to good use once the Charmin factory has no more workers to process the trees they don't have since they can't pay anymore lumberjacks. If you destroy the legs on a barstool, don't be surprised when you're sitting on the ground.

My second problem: Again, I appreciate your effort in bringing this to our consciousness. What are our options? What are we supposed to do? Do you have any recommendations for those of us that don't have a large nest egg? What should we be doing, just to be sure we are as safe as we can be for our family?

I would highly reccommend you check out the Survival section of this website (AboveTopSecret.com) It's packed to the brim with helpful information.

I know it won't be long and there will be some people chiming in that are convinced that this is nothing to worry about. I prefer to be prepared for the worst, but hope for the best. Hope does not feed my children. Hope does not keep a roof over my head. If I had a couple grand in the bank, what should I be doing with it? Will it be worth half of what t is in a few months? What are your gut feelings about what the average person, or someone on here should be doing?

Do whatever you can afford that makes you happy, soon the pursuit of happiness will be a luxury we don't have. As for your family, Survival forum. Again, these guys know their stuff and have thought about many angles. Great place to pick brains and ask questions.

I hate being ignorant, but the volume of information required for me to make an informed decision is staggering and disheartening. I don't KNOW economics, which is probably why I'm in the boat that I am, but I think I'm a fairly good person and I don't want my children to suffer. What is the line between paranoia and preparation on this one?

The line will always be blurred. The question is, how much do you love your family? If you love them alot, be prepared. Do your best for them. Unfortunately, my advice falters alot in this regards because I am in the same boat. I have alot of debt, absolutely no money, and I am not sure what I will do in the very near future. But there is always hope. It doesn't feed the children, but it feeds the heart and spirit plenty. I will be thinking of you and hoping for the best for you.

[edit on 3-8-2009 by BaronVonGodzilla]

reply to post by marg6043

I believe they are talking about oil and big businesses, not regular tourist bringing on their currency.

And I’m not a tourist, *regular* or no.

Nor did I say I was.

And I repeat.

I’ve had NO PROBLEM exchanging my USD in ANY of the countries that I‘ve *visited* in Europe over the last 18 months.

Please don’t pigeonhole me as a tourist to get the OP out of the hole she dug for herself.

It's nice of you, really, but, it actually does no one a service at all.

Thanks...