A couple of interesting articles about money in the news.
CNBC - Dollar to Be 'Discarded' by World: China Rating Agency
What is really amusing is Greenspans response.
CNBC - No Chance of Default, US Can Print Money: Greenspan
Basically the Chinese said that if we don't get out house in order we will not be able to buy from them using dollars. Greenspan said that we could always print more dollars to get rid of our debt (that is hyperinflation talk). Mr. Greenspan is correct, we can print dollars and pay off our debts, heck, we could print billion dollar bills and give them to the Chinese and poof no more debt and nobody will ever sell to us again unless we use a new currency. Ahhh, that is the real trick.
I know I have written about this, I said that our debt would be forgiven and we would have to have a new currency or one pegged to something identifiable such as a countries mineral worth and labor worth.
Lets look at what happened. Congress increases the debt limit. The United States credit rating was downgraded. That is the same as your credit score, it determines how much people will lend you and at what rate. China and Russia complain about our failing to fix our economy because they know that we will have to inflate our currency and pay them off with dollars that have less value, basically cheating them on our promises. Rather than issue a formal answer, the government has ex Federal Reserve Chairman Greenspan basically say that we can pay them with useless paper and they cannot do a thing about it.
Gosh, if you were a foreign country and were just told that your trillions of dollars of U.S. debt was going to be made completely worthless what would you do and don't you think they know that Greenspan was speaking for our country? So how does it work, well if the Chinese won't by our debt then we will buy it using the Federal Reserve. You have the Federal Reserve buy all our debt and then nationalize the Federal Reserve or cancel the debt (which is what Ron Paul recommends). This is an old wall street trick.
There is a company with some good assets; but, many divisions are not profitable. You buy the company cheap (because it is losing money) and then you transfer the debt to one part of the company and split the company leaving the part that is not performing with all the debt. The new company fails and the old company is left without the debt. Cute huh?
It is a good thing that I am not selfish, is it not. I know how to make money I just don't care. Be well.
