Comparing today’s recession/depression to the 1980 recession

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"Much like today, Americans were concerned not only with high unemployment but increasing budget deficits in the early 1980s. A September 1983 Gallup poll found that three-fourths of the public agreed that the federal government's budget deficit was a great threat (42%) or some

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Why savers are getting screwed

Why savers are getting screwed

"Without the intervention of economic policymakers, interest rates would be naturally higher. That would increase the cost of borrowing for businesses and consumers, but there would be some offsetting economic benefits. Savers are getting screwed by the current monetary policy

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Geithner admits USA bankrupt to US Senate

Geithner admits USA bankrupt to US Senate

"Never in our history has Congress failed to increase the debt limit when necessary. Failure to raise the limit would precipitate a default by the United States. Default would effectively impose a significant and long-lasting tax on all Americans and all American businesses

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Real reason for electricity blackouts hitting southern US

Real reason for electricity blackouts hitting southern US

“Large oil companies have for a decade artificially shorted the gasoline market to drive up prices,” said FTCR president Jamie Court. “Oil companies know they can make more money by making less gasoline.” The following article was written by Paul Joseph Watson. He is t

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World economies on verge of currency revaluations to deal with debt

World economies on verge of currency revaluations to deal with debt

"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." -- Henry Ford Basically what the world central banks are doing is increasing their money by devaluin

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Is Obama the next Mugabe of Zimbabwe?

Is Obama the next Mugabe of Zimbabwe?

"America, Britain, Japan, Germany, France, Sweden, Holland, Norway, Canada and Australia make up the Fishmongers Group and their meeting on Tuesday will deliberate on the state of the inclusive government, debt relief, public finance administration and the controversial economi

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US raiding foreign countries with dollars, not soldiers

US raiding foreign countries with dollars, not soldiers

""The United States is going to China and saying: we want you to commit economic suicide, just like Japan did. We want you to follow the same thing: we want you to revalue your currency, we want you to squeeze your companies, we want you to go bankrupt,” says Michael Hudson,

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FDIC wants your retirement cash to save banks: Bloomberg

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“The FDIC is constantly looking at structures where we can get the greatest opportunity to tap into capital that we have not had the success reaching through previous disposition methods,” FDIC spokeswoman Michele Heller said in an e-mailed statement. “We welcome and work

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Canadian government admits recovery never happened

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“Not only did their stimulus fail to create the jobs of tomorrow, it also failed to protect the jobs of today,” Scott Brison, the opposition Liberal Party’s spokesman for finance issues, said by telephone. "Most of us were shaking our heads in disbelief early last year w

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How Western society is brainwashed and crumbling

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"The cultural embrace of illusion, and the celebrity culture that has risen up around it, have accompanied a growing system of casino capitalism, with its complicated and unregulated deals of turning debt into magical assets, to create fictional wealth for us, and vast wealth f

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Will we see double digit interest rates from the 1980s?

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"And I sincerely believe, with you, that banking establishments are more dangerous than standing armies; and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale." -- Thomas Jefferson Spending is

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Greenspan: credit crunch “by far the greatest financial crisis”

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pyramid dollar bill

The US consumer is no longer all-powerful – and it’s time to ‘re-balance’

The post-G20 fall-out continues. Robert Zoellick (former Goldman Sachs Exec)president of the World Bank, warned yesterday that America’s days as an unchallenged economic superpower are numbered and that the dollar is likely to lose its No. 1 spot as the global reserve currency to the euro and the Chinese renminbi.

“The United States would be mistaken to take for granted the dollar’s place as the world’s predominant reserve currency,” he warned, offering the euro as a “respectable alternative” for international transactions and predicting that the renminbi would “evolve into a force in financial markets”.
Some commentators believe Zoellick is being purposefully provocative. At the same time, he’s amplified the main lesson of the Pittsburgh summit: as the global economy undergoes a kind of de-centralisation, so the global system of currencies will shift.

There is growing belief that the US consumer is blown out as the pre-eminent engine of global economic growth

Zoellick’s larger point has been made many times before: while the dollar remains the global currency of choice today, the US lack of discipline over spending and its budget deficits will ultimately diminish or even collapse the currency.

Further, there is growing belief that the US consumer is blown out as the pre-eminent engine of global economic growth and economists are keen to talk of “re-balancing”, a scenario under which the US cuts spending and the Chinese consumer takes up the slack.

The plan is theoretical at best. The dollar, hurt by low interest rates, is still on the way down. That may be fine while the Fed keeps the dollar-spigot wide open, but what happens when money supply tightens?

Pre-eminent among the new thinkers is Harvard economist Ken Rogoff. Over the past several months, he’s been floating the idea – clearly with the Obama administration’s backing – that a period of inflation would be the best way of reducing the massive US debt.

With the US economy still too weak to support itself unaided, “it is time for the world’s major central banks to acknowledge that a sudden burst of moderate inflation would be extremely helpful in unwinding today’s epic debt morass,” Rogoff holds.

Inflation, he believes, “is an unfair way of effectively writing down all non-indexed debts in the economy. Price inflation forces creditors to accept repayment in debased currency.

Original article found at The First Post Dollar Supremacy Could Be Sacrificed For US Recovery

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