Japan on the verge of Economic Collapse?

[Contrarian]

B/B might like this article which I hope he finds time to comment on.

https://www.investmentwatchblog.com/japan-is-the-spark-that-is-about-to-burn-it-all-down/

[Contrarian]

https://twitter.com/zerohedge/status/1534612896461766657

[Markje]

Interesting read, but I don't buy into the Japan crises so much.

Japan will limit their sale of USD, because if the USD crashes their loans become null-and-void and their own economy will crash even harder.

[andrewfi]

Interesting read, but I don't buy into the Japan crises so much.

Japan will limit their sale of USD, because if the USD crashes their loans become null-and-void and their own economy will crash even harder.

This applies to all holders of US debt and money. They may want to sell debt but doing so will push the market down. For the larger holders, selling might lead to a vicious spiral. It is pretty much the same as a bank run.

As for money holdings, they can choose to use the cash to purchase other assets and reduce overall holdings of dollars. However, the effect on price is similar. Almost like the kids' game of musical chairs. Nobody wants to be the last one standing up!

What is likely to happen though is a decrease in the amount of purchases of US debt and money.

[AvHdB]

Interesting read, but I don't buy into the Japan crises so much.

Japan will limit their sale of USD, because if the USD crashes their loans become null-and-void and their own economy will crash even harder.

This applies to all holders of US debt and money. They may want to sell debt but doing so will push the market down. For the larger holders, selling might lead to a vicious spiral. It is pretty much the same as a bank run.

As for money holdings, they can choose to use the cash to purchase other assets and reduce overall holdings of dollars. However, the effect on price is similar. Almost like the kids' game of musical chairs. Nobody wants to be the last one standing up!

What is likely to happen though is a decrease in the amount of purchases of US debt and money.

While I do not have an economic background I suspect the scenario that Contrarian has linked will bring further inflationary pressure, primarily on the US, but de facto the entire world.

While for the average Joe in the flyovers this will be disastrous, the American government can pay down erase a chunk of debt.

[AvHdB]

While dated it is an interesting and valid viewpoint.

[Texan77]

While I do not have an economic background I suspect the scenario that Contrarian has linked will bring further inflationary pressure, primarily on the US, but de facto the entire world.

While for the average Joe in the flyovers this will be disastrous, the American government can pay down erase a chunk of debt.

Actually, I think the coming inflation will make little different to the average USAian.  It will at first because the rise in prices happen first and the rise in wages second. The people who will suffer the most are retires all over the western world. Here I saw sign, convenance store worker, 18 dollars per hour. Minimum wage is 7.50 but try to hire someone for that.  Many fast-food places want to pay 10 but they cannot hire enough people. I see fast food places that are open drive thru only even during the busiest hours of the day. I think it is lack of workers.  The low-cost labor pool is now retires who need to supplement their income and only want to work a few hours a day. The real problem is not debt but rather lack of supply of goods as supply chains have never returned to pre covid levels and lack of labor. Until we automate more and need less workers and move more of our needed manufacturing to North and central America the problem will likely continue.  If the USA did not have any debt the price of a dollar would be so high a person would have to work all week to get one and poverty would be ramped.  People here on RUA do not really understand if the money supply did not increase when the population grew the really bad problem that would cause.  The increase money supply cause people to have to keep their money invested in objects that cause the economy grow as savers lose money over time. If saving paid then the stock market would collapse as no one would invest and take the risk. Since they have to invest, Business can get needed capital to grow.

Every western Country and China uses this model for growth. In the west we buy stocks and real estate and in China they mainly buy real estate.  You either invest or lose your money and it is no secret. It has been that way for over a hundred years now and will likely continue for some time into the future. The government buys the bonds so no one cares if the bonds are bought or not. Still billions of dollars of bonds are bought and traded. It is true the government does not want the rate of debt to increase too fast as this would have a negative impact. There is no interest to ever pay off the government debt and this would cause such a contraction of available currency in circulation that would cause a massive depression.

[andrewfi]

Texan77, where is the increased productivity of the U.S economy going to come from?
Without increased productivity, there can be no pay rises that are not themselves inflationary.

The least affected by inflation are those who are positioned, in economic terms, closest to the money spigot. Anyone on a wage is, by definition, positioned a long way from the money spigot and thus any pay rises will always be trailing inflation by some margin and they will thus have their income decreased by that inflation.

To help you visualise the problem and understand that fallacy of your thinking:
Assume an annual pay rise for workers on a wage.

Assume 10% inflation.

Across the course of a year, inflation reduces the income, in real terms, of the worker by 10%.
At the end of the year, a pay rise of 10% is paid to compensate the worker for the loss due to inflation.
If the worker earned $10k during year one of inflation, in real terms, his income is now $9k.

Adding 10% (the rate of inflation) to his salary does not compensate for the purchasing foregone during the previous year.
All that is done is to compensate, to some degree for future inflation. But that pay rise at the end of year 2 is still only 10% against a real decline of about 20% in the worker's spending power.

So, the worker's real income is now (using approximate numbers to save working out the effect of compounding) $8k excluding the pay rise. So, over two years, his real income was $17k plus a pay rise of $1k = $18k. A loss of $2k compared to the situation without inflation. Even with a pay rise that matches the nominal inflation rate, the worker is still 10% worse off than before inflation hit.

If you want, you can work out the numbers including the effect of compounding (but don't worry - the picture is worse when compounding is included!)
That cycle is ongoing, the worker's income goes down in real terms each year if he receives a rise equal to inflation.

This phenomenon leads to pay rises that are more frequent than annually. In high inflation economies it is not uncommon to have pay rises every month - the higher the inflation rate, the more frequent the pay rises become.

Of course, giving pay rises assumes the business can afford to make such generous inflation-matching pay rise offers to workers. Usually, they cannot do so. Far fewer have the spare money to pay increases that account for the full inflation because that means paying more than the nominal rate of inflation and in advance of it having taken place. (another reason why in high inflation economies, pay rises to account for inflation take place more frequently)

Any rise that is not matched by a real increase in productivity will be inflationary so in the macro economy, the inflation rate will increase even further.

Inflation is always bad. It is always an invisible tax upon the population. The wealthy and those close to the money spigot (usually the same people) tend to suffer less because they get to spend money before inflation has had full effect. (remember inflation is a time-based issue, so the first spend is the best spend,)

[Wiz]

While I do not have an economic background I suspect the scenario that Contrarian has linked will bring further inflationary pressure, primarily on the US, but de facto the entire world.

While for the average Joe in the flyovers this will be disastrous, the American government can pay down erase a chunk of debt.

Actually, I think the coming inflation will make little different to the average USAian.  It will at first because the rise in prices happen first and the rise in wages second. The people who will suffer the most are retires all over the western world. Here I saw sign, convenance store worker, 18 dollars per hour. Minimum wage is 7.50 but try to hire someone for that.  Many fast-food places want to pay 10 but they cannot hire enough people. I see fast food places that are open drive thru only even during the busiest hours of the day. I think it is lack of workers.  The low-cost labor pool is now retires who need to supplement their income and only want to work a few hours a day. The real problem is not debt but rather lack of supply of goods as supply chains have never returned to pre covid levels and lack of labor. Until we automate more and need less workers and move more of our needed manufacturing to North and central America the problem will likely continue.  If the USA did not have any debt the price of a dollar would be so high a person would have to work all week to get one and poverty would be ramped.  People here on RUA do not really understand if the money supply did not increase when the population grew the really bad problem that would cause.  The increase money supply cause people to have to keep their money invested in objects that cause the economy grow as savers lose money over time. If saving paid then the stock market would collapse as no one would invest and take the risk. Since they have to invest, Business can get needed capital to grow.

Every western Country and China uses this model for growth. In the west we buy stocks and real estate and in China they mainly buy real estate.  You either invest or lose your money and it is no secret. It has been that way for over a hundred years now and will likely continue for some time into the future. The government buys the bonds so no one cares if the bonds are bought or not. Still billions of dollars of bonds are bought and traded. It is true the government does not want the rate of debt to increase too fast as this would have a negative impact. There is no interest to ever pay off the government debt and this would cause such a contraction of available currency in circulation that would cause a massive depression.

AS usual you are coming out with crap in your effort to cover the truth that the reality is that your Toilet Dollar paper has nowhere support  and soon you will see what happens in teh Dollar markets.

Actually the original article disclosed that BoJis holding more than a $trillion is us Government bonds and if they sell it , soon, what will happend to usa economy.

Andrew gave you a long explnations.... but the fact is simple, for Japan to save its economy will have to sell some of your GOV deabts.....and you will have to buyit!

QUOTE FROM THE ARTICLE:

"The Japanese are the second largest holder of US treasuries and have managed to accumulate $1.3 trillion of US debt, a position which has earned Japan a tidy profit over the years. So what does BoJ do about the Yens fall turning into a catastrophic risk? They only have two choices – one is they abandon their yield curve control. They can’t do this because the Japanese government debt to GDP is 266%, if interest rates rise, the Japanese economy will go into a depression deeper than anything a developed country has seen as their debt deleverages and the Yen would rebound to sharply, killing their economic drivers of export industries. Japans economy would cease to exist for all practical purposes.

What’s their other option…? The BoJ will have to intervene to directly strengthen the Yen. They will do this buy going into the open market and buying Yen. With what money? They will tap into the $1.3 trillion of US treasuries reserves and sell the US bonds to buy Yen. This will cause a sudden appreciation of the yen, you will probably see this occurring this week or next, and they will likely try to drop the USD to Yen rate to 125. The intervention will be an ongoing battle, and the Japanese will have to expend most of their US treasuries…."

What does this have to do with silver? Hang in there. As the the BoJ dumps their US bonds, this will sky rocket the US rates on our ten year bond. This will be occurring AT THE SAME TIME as the worlds largest holder of US treasuries (remember Japan is number two), is attempting to sell its bonds as it ends its own QE program. US interest rates are going to EXPLODE. We are talking about US ten year interest rates doubling over summer.

Folks…. It’s going to get BAD. The night WILL be darkest before the dawn if you have silver or gold. This is the end game. The feds will be forced ONE LAST TIME to re-enter the market.

The scary thing is, it’s happening. Watch the USDJPY yen rate over the next week or two (End of quote)

Now take a look at the Bank of Russia and the Strength  of the Ruble...... when Russia aparently is fightighng a war in Ukraine instigated by your USA (V. Nullan has confirmed) you are spending trillions of $, to fight Russia by a proxy, which you will never get back while your President's family is making themselves very rich.
Russia still export its products, is self sufficient PUTIN making lot's of Money increasing all salaries and pensions by 10% on 1st of JUNE.

At the same time Biden looks where to find oil.....gas...etc and Maduro ia laughing all the way to the Bank.

In simple terms USA is in a terminal death road!
(Much earlier than I was predicting)
 

PS: I checked the artickle with a friend in the City of London. and he said looks accurate and most probably will happen. I am not an economist or an investor like you!

[andrewfi]

Wiz, to be fair about the ruble, the value increases genuine, but the market is relatively thinly traded. If there were more participants and more use of the ruble then the effects of the EU and (I think) the US buying in rubles would be less pronounced.

However, the Russian Central Bank has been intervening to reduce the value of the ruble as too high a value can have negative effects on the Russian macro economy. I think that the Russians were a tad surprised at the increase in value and that is being reflected in their choices to stimulate the economy with some of the cash that is swishing around at the moment.

The cool thing for the Russian economy is that the stimulus that is being provided comes from 'real' money. It is not the result of increasing debt (printing money). The medium-term impact might be inflationary due to supply-side constraints forcing prices higher. However, that's heaps better than structural inflation caused by the necessary creation of new money.

And yes, WRT Japan and its bonds. Selling those means the dollars held in the bonds will return to the USA adding to the domestic money supply and increasing inflation in proportion. That's why sales of bonds (debt) are a matter of fine timing. If several large holders of decided to sell at the same time then each seller will suffer as they end up getting devalued dollars. So, the trick is to let the air out of the balloon slowly rather than letting the balloon go 'pop'!

Of course, the value of the dollar will not go straight down, Itis still, and will remain for quite some time (if not forever) a reserve currency and a deposit of last resort. The currency that investors choose in times of risk and doubt. So, as I have been for the past year or so, I will be happy to be paid in dollars as the rise has ameliorated the effects of inflation for me. But the tide will turn, ebb and flow with a general downward trend for many years until the USA has been able to match the value of the dollar to the real size of the domestic economy.

[Wiz]

Wiz, to be fair about the ruble, the value increases genuine, but the market is relatively thinly traded. If there were more participants and more use of the ruble then the effects of the EU and (I think) the US buying in rubles would be less pronounced.

However, the Russian Central Bank has been intervening to reduce the value of the ruble as too high a value can have negative effects on the Russian macro economy. I think that the Russians were a tad surprised at the increase in value and that is being reflected in their choices to stimulate the economy with some of the cash that is swishing around at the moment.

The cool thing for the Russian economy is that the stimulus that is being provided comes from 'real' money. It is not the result of increasing debt (printing money). The medium-term impact might be inflationary due to supply-side constraints forcing prices higher. However, that's heaps better than structural inflation caused by the necessary creation of new money.

And yes, WRT Japan and its bonds. Selling those means the dollars held in the bonds will return to the USA adding to the domestic money supply and increasing inflation in proportion. That's why sales of bonds (debt) are a matter of fine timing. If several large holders of decided to sell at the same time then each seller will suffer as they end up getting devalued dollars. So, the trick is to let the air out of the balloon slowly rather than letting the balloon go 'pop'!

Of course, the value of the dollar will not go straight down, Itis still, and will remain for quite some time (if not forever) a reserve currency and a deposit of last resort. The currency that investors choose in times of risk and doubt. So, as I have been for the past year or so, I will be happy to be paid in dollars as the rise has ameliorated the effects of inflation for me. But the tide will turn, ebb and flow with a general downward trend for many years until the USA has been able to match the value of the dollar to the real size of the domestic economy.

Andrew
Thank you for the further advice regarding the Dollar and its position against the  Rublle.....I have not studdied economics but I know a couple of people, who know, explain and teach me when ever I raise some questions for them.
Well Russia has finnaly stopped accepting payment in Dollars and any dollars it was receiving spend it to buy GOLD. AMERICA Does NOT APPEAR TO HAVE IT OWN GOLD...so they have to ask the Jewish owners of FED to print more toilet paper for which they pay commission. Jacobs and ROs......family are holding USA by the balls...sorry she is a woman....LOL

It was pretty obvious what the plan of Putin was regarding acceptance of Dollars, and my wife, when she went to Russsia 2 years ago she spend a day in Moscow where she visited the right deparment of SBER bank to exchange English pounds cash because they had stopped exchanging £pounds Cash to Rubles.....

I do not have to expand about the Russian policies regarding their Rubbles but it is obvious that the American hegemony position proved to be not very strong......when it comes to world reserve currency. After all what the sanctions against Russia has achieved so far?

A strong RUSSIAN CURRENCY, Made life for orderny people difficult and expensive, around Europe, soon the Americans will face that too!

I think Biden is only interested what his family can make fron any trascation and not what is the best for his country. Borred with their posts..........

 

[Texan77]

Lets see here. You call the Russian ruble strong when there is 17 +/- per cent price increases in Russia. Now on this trade the Japanese Yen is in free fall against the dollar. The fed is going to make the dollar strong and that is going to have a very negative impact in the standard of living in the USA. Big USA recession coming when USA central bank strengthen the USA. Yes, the inflation rate in USA is too high but the other side of the coin will not make people very happy neither. When the dollar becomes strong the USA economy will have a recession and oil consumption will drop worldwide. This will cause the world to have oil surplus and the price of oil and gas fall. Russia will have as much fun enjoying the coming recession as the west if not more so. You have to remember they are likely to still be at war in Ukraine.

Wiz, It is just you are so small in your thinking you can not see it. Nothing is as simple as you think and the propaganda you read designed for small minded people.

[Wiz]

Lets see here. You call the Russian ruble strong when there is 17 +/- per cent price increases in Russia. Now on this trade the Japanese Yen is in free fall against the dollar. The fed is going to make the dollar strong and that is going to have a very negative impact in the standard of living in the USA. Big USA recession coming when USA central bank strengthen the USA. Yes, the inflation rate in USA is too high but the other side of the coin will not make people very happy neither. When the dollar becomes strong the USA economy will have a recession and oil consumption will drop worldwide. This will cause the world to have oil surplus and the price of oil and gas fall. Russia will have as much fun enjoying the coming recession as the west if not more so. You have to remember they are likely to still be at war in Ukraine.

Wiz, It is just you are so small in your thinking you can not see it. Nothing is as simple as you think and the propaganda you read designed for small minded people.

Texan 77

It is pretty obvious that you are not an economist neither you have any training in theses matters and the same applies for me.......but so far you have not explained to me how the American economy will flourish for the benefit of the people and not the crooks who are running your country, while your Government has to ask the FED to print more toilet paper.  Do you think I call the dollar "toilet paper" for a joke?

Simply for your info an item like your dollar, acquire value when there is a buyer to accept it as payment for a product or service provided OR when is backed by Gold/silver which has residual value from moment was/is discovered over the centuries, is exchanged as payment value and generally accepted and traded by anybody in this planet.

Lets examined the facts. USA has about 800 army bases around the Globe and is using its own home grown and produced food and other products that supply for the people and bases to support your own home economy and keeps your home made industries in business, providing jobs, various services etc.

This system the way it operates is just a fake economy and the clever (British Jews) Bankers are milking FED for any valuable profits at the end of the year. Don't listen what I have to say.... CHECK IT! You will be surprised with what you will find.

Your Dollar has NO residual value when is printed but acquires value when it is accepted for payment for something, like food, industrial products, services etc.

Here is an example for you to understand!

A hotel near the sea advertise special offer prices for a room per night!

A young couple, obviously in love arrive to the reception and request to see the room first before making full payment for 7 nights.

Reception requests $100 deposit and give them the door key to inspect the room.

While the couple go to the room, the receptionist pops over to the butcher next door and gives him the $ 100 dollars for items he bought and owed to him.

A Woman just arrived too and waits till the receptionist has gone out of the Butcher shop  and she starts talking to the butcher.

The butcher gives the woman the $100 note, she says thank you and walks out of the butcher shop and then she goes into the hotel reception and gives the £ 100 note to the receptionist paying for the use of the room while providing services to a customer and she goes off.

Few minutes later the original couple comes down and tell the receptionist that the room has no sea view so he gives them back the $100 note....and they go out looking to find a room with a sea view in another hotel.

So where is the residual value of the $ 100 note?

So it is clear that your toilet printed paper $ dollar gets value only when is accepted as payment for services or products provided.......and acquired.

From what I read most of your Fracking companies created by cheap money and mostly dept have gone out of business and you have no oil or gas product to sell and use your cheap reserves for any sale you make..... to make any real money so you go around begging Maduro and others  to sell their products to the EU countries under your name and at prices with market value 2-3 and much more expensive.

Well the EU countries still continue buying Russian oil and Gas, which is provided via the China or Indian refineries under contract with the Russians.

AndrewFi, long time ago told us that the Cost for a barrel oil from Urals is around $7 dollars. I can't remember the cost for gas...... but the European idiots now paying YOUR Market value.......for the same oil and gas they used to buy at very much cheaper prices....supplied from direct pipes instead the added market value for transport to India, Refinery costs etc. and high expense, going via India, and making the GREEK SHIP OWNERS MUCH RICHER........

How long they would continue destroying our economies for the benefits of the American Gangsters?

With your sanctions to Russia what have you achieved? Absolutely nothing except for making the Biden Family and friends Richer.

Your supporters in NATO and EU what they have achieved?  FCUK ALL.

Here in the UK petrol is almost £2 a litre........and shop prices for food and other imported products almost doubled.

Soon the people in Europe, including GB will be up in arms and will kick out all the American servants in their Government.

How many airlines, hotels and other businesses will have to go to the wall?

Soon or later people will explode and that will be the End of your hegemony and NATO!

As about Russia they are SELF SUFFICIENT, have valuable products to sell cheap and they will continue to do so.. no matter who is in power. Soon the Ukraine problem will be resolved and maybe the Jewish Clown will fly to Florida in USA to enjoy life there. Russia and Ukraine have plenty of surplus Mail Order .... slim and attractive PITSA's  but you prefer your  Do it Your Self American pictures.....of Fat ugly American Arses.

Putin, most probably, will stay in History as the man
who revived the Russian Empire back to Life after WWII.

The Chinese will continue buying more industrial companies
and land while robing you of your money.


Watch this Video carefully for its message,
with Merkel and Putin talking economics.

 

[AvHdB]

Wiz, Just a suggestion get a new dealer (drugs) or lay off the Metaxa.

[Wiz]

Wiz, Just a suggestion get a new dealer (drugs) or lay off the Metaxa.

What is the  matter Mr Zionist troll?
Ah ....you don't like me mention the truth!
Well watch this.........I just discovered after my dinner.

Tucker Carlson: This is a scam

I Just wonder when the poor Americans will wake up
and start chasing the Zionist vultures having a picknick!



 

[Wiz]

Wiz, Just a suggestion get a new dealer (drugs) or lay off the Metaxa.

You may like this to entertained your loneliness and boring Trolling shift!

Good night have a  good shift!

[AvHdB]

Wiz, Just a suggestion get a new dealer (drugs) or lay off the Metaxa.

What is the  matter Mr Zionist troll?
Ah ....you don't like me mention the truth!
Well watch this.........I just discovered after my dinner.

Tucker Carlson: This is a scam

I Just wonder when the poor Americans will wake up
and start chasing the Zionist vultures having a picknick!

Sort of amusing, at about 13 minutes he predicts what I said a while back that inflation is a means to pay down the US debt. Short term it will work, long term in today’s economy a really bad idea.

[Wiz]

Wiz, Just a suggestion get a new dealer (drugs) or lay off the Metaxa.

What is the  matter Mr Zionist troll?
Ah ....you don't like me mention the truth!
Well watch this.........I just discovered after my dinner.

Tucker Carlson: This is a scam

I Just wonder when the poor Americans will wake up
and start chasing the Zionist vultures having a picknick!

Sort of amusing, at about 13 minutes he predicts what I said a while back that inflation is a means to pay down the US debt. Short term it will work, long term in today's economy a really bad idea.

Yes you mentioned it before that your national dept is about $ 30 or $300 Trillion Dollars but you did not explained how it will happen with the inflation to wipe it out, when you make most of your products abroad and China is holding a huge amount of the US Government dept......So what do you export to reduce your GDP Dept?

WAR WAR WAR and arms.....

Are you aware that China has expanded  quietly all over the world, created it' own shops and sell cheaply its own products..... you sell arms and war equipment and for that you are very popular - YAK!!!

Did you hear the President's Comment in LA that he advised Yelensky about Russia loosing it's patience. What a bloody Crook...... Yelensky's days are numbered.....!

and this song

is dedicated to you and your best friend...LONELINESS

 

 

[andrewfi]

Wiz, using inflation to devalue a currency and thus pay off debt using bad dollars, pounds or yen does not require increased real economic output.

Of course, inflation tends to have a depressing effect upon investment because inflation tends to go hand in hand with higher rates of interest and other investment returns. This has the effect of making the productivity gains obtained by investment less competitive so financial managers will tend to place company money into financial investments rather than investing in the growth or productivity of the business.

Compound that with higher rates of business failure in high inflation periods and overall, one might expect total economic output to fall.

But, given that debt does have to be repaid, inflation and the accompanying currencey devaluation is likley to be chosen. The effects are less visible than increases in taxation and can often be blamed on external actors (See Putin's Price Hikes for an example of that!)

[andrewfi]

Texan77, some things in life are relative and some things are absolute.

The ruble is being hailed as the strongest currency because of its relative change in value in comparison to other major currencies including the dollar.

Inflation in Russia is falling, while across much of the global economy inflation is rising and doing so month after month.

So, setting all other practical issues aside, where would one be better off storing one's cash in terms of returns?
Right now, probably in Russia. Firstly one will get a relatively high rate of interest. Secondly one will benefit from the improvement in the ruble's value relative to other currencies.

Imagine an investment of $100 in the ruble. Lets pick numbers out of our arse for illustration.
Interest rate in Russia is 10% over 12 months.
Currency appreciation relative to the dollar is 20% over 12 months.

Interest rate in the USA is 1% over 12 months.
Currency appreciation relative to the ruble is -20% over 12 months. (that will always be the inverse of the rate on the opposite trade)

So, after 12 months, $100 invested in a ruble account in Russia is now worth $110. Now we add on the change in the value of the holding currency. So that's $20. Our original investment is now worth, when turned back into dollars, $130.

How does that compare to saving your dollars in a dollar account in the USA?
After 12 months your $100 is now worth $101. Now account for the change in the value of the currency compared to the same money held in rubles. That's minutes $20. So, your original investment is now worth $81 compared to keeping it in a bank in Russia. That's a difference of $49 in favour of the ruble account.

I have as in previous examples, excluded the effect of compounding for simplicity.

So, which currency looks stronger to you now that you understand the numbers (assuming that you did understand?)

Bear in mind, that inflation is broadly speaking priced into the value of the currency of the economy suffering inflation. There is a degree of lag which is why those people closest to the money printing spigot do less badly than ordinary citizens of the economy. There are also political reasons why interest rates might not reflect the real effect of inflation. For example, the United States needs interest rates closer to the real inflation rate which is claimed to be just under 10%. However, the economy simply cannot withstand the effect of such rates, so rates are below the inflation rate meaning that ordinary savers are being robbed to subsidise large commercial borrowers. This has its own big set of issues, read about misallocated risk.

[Wiz]

Andrew Thank you for your explanation but I do not understand this:

China is holding over 3 Trillion of dollars  of GOV debt and from what I read they are buying land and other investements... in USA..... with the money they are receiving for the products the build....for USA ......  and they still holding $3 trillion on Gov bonds...... I just cannot undesrtand, how they can be repaid? Usa hardly exports anything else apart from war items and defence industry products.. 



Yesterday evening I received this message and looking to find it on this thread I Cannot located?  Any body can help especially AV pls.

TOPIC: Japan on the verge of Economic Collapse?

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Quote from: Wiz on Yesterday at 10:53:53 AM

Quote from: andrewfi on Yesterday at 06:19:30 AM

Wiz, to be fair about the ruble, the value increases genuine, but the market is relatively thinly traded. If there were more participants and more use of the ruble then the effects of the EU and (I think) the US buying in rubles would be less pronounced.

However, the Russian Central Bank has been intervening to reduce the value of the ruble as too high a value can have negative effects on the Russian macro economy. I think that the Russians were a tad surprised at the increase in value and that is being reflected in their choices to stimulate the economy with some of the cash that is swishing around at the moment.

The cool thing for the Russian economy is that the stimulus that is being provided comes from 'real' money. It is not the result of increasing debt (printing money). The medium-term impact might be inflationary due to supply-side constraints forcing prices higher. However, that's heaps better than structural inflation caused by the necessary creation of new money.

And yes, WRT Japan and its bonds. Selling those means the dollars held in the bonds will return to the USA adding to the domestic money supply and increasing inflation in proportion. That's why sales of bonds (debt) are a matter of fine timing. If several large holders of decided to sell at the same time then each seller will suffer as they end up getting devalued dollars. So, the trick is to let the air out of the balloon slowly rather than letting the balloon go 'pop'!

Of course, the value of the dollar will not go straight down, Itis still, and will remain for quite some time (if not forever) a reserve currency and a deposit of last resort. The currency that investors choose in times of risk and doubt. So, as I have been for the past year or so, I will be happy to be paid in dollars as the rise has ameliorated the effects of inflation for me. But the tide will turn, ebb and flow with a general downward trend for many years until the USA has been able to match the value of the dollar to the real size of the domestic economy.


Andrew
Thank you for the further advice regarding the Dollar and its position against the  Rublle.....I have not studdied economics but I know a couple of people, who know, explain and teach me when ever I raise some questions for them.
Well Russia has finnaly stopped accepting payment in Dollars and any dollars it was receiving spend it to buy GOLD. AMERICA Does NOT APPEAR TO HAVE IT OWN GOLD...so they have to ask the Jewish owners of FED to print more toilet paper for which they pay commission. Jacobs and ROs......family are holding USA by the balls...sorry she is a woman....LOL

It was pretty obvious what the plan of Putin was regarding acceptance of Dollars, and my wife, when she went to Russsia 2 years ago she spend a day in Moscow where she visited the right deparment of SBER bank to exchange English pounds cash because they had stopped exchanging £pounds Cash to Rubles.....

I do not have to expand about the Russian policies regarding their Rubbles but it is obvious that the American hegemony position proved to be not very strong......when it comes to world reserve currency. After all what the sanctions against Russia has achieved so far?

A strong RUSSIAN CURRENCY, Made life for orderny people difficult and expensive, around Europe, soon the Americans will face that too!

I think Biden is only interested what his family can make fron any trascation and not what is the best for his country. Borred with their posts..........

 



Wiz, Just a suggestion get a new dealer (drugs) or lay off the Metaxa.

More replies may be posted, but you won't receive any more notifications until you read the topic.

Regards,
The Russian, Ukrainian & FSU Information & Manosphere Discussion Forums Team.


I annot find it.... I think AvHdB must put a timer.... to dissapear.............or he changed his mind and delete it just before the cut off timing. or corrections.

 

[Texan77]

Andrew Thank you for your explanation but I do not understand this:

China is holding over 3 Trillion of dollars  of GOV debt and from what I read they are buying land and other investements... in USA..... with the money they are receiving for the products the build....for USA ......  and they still holding $3 trillion on Gov bonds...... I just cannot undesrtand, how they can be repaid? Usa hardly exports anything else apart from war items and defence industry products.. 

The three trillion of bonds have been mostly pledged and are not available to sale. China has currency controls and does not let its citizens or businesses buy more stuff in the USA or any other country. This has caused Chinese to be net seller of USA real estate. All of this Chinese infrastructure cost a lot of money and most of it was built with borrowed money. They have a positive trade with the USA but over all their trade balance is about even. Then they send a lot of money out of the country trying to buy friends and do infrastructure projects. China has ways to hide its real debt, but it is suspected to be twice indebted as the USA compared to its GDP.  China has most likely the fastest aging population in the world because of the one child policy and is facing a huge retirement crisis.  It population is expected to half by as soon as 2050. Chinese currency cannot be used in a large scale for international trade because of currency controls. They will not let enough out of the country to conduct huge amount of trade.

The Russia Ruble is presently being supported by gold. This is likely just a measure to get them thru the war.  Most countries are not wanting the rubles but wanting the gold instead. Russia has enough gold to do this for about one to two years. After that or when the war ends the ruble is likely to go back to being volatile.

As much as it might displease you the dollar will likely be with us for some time to come.

[Wiz]

Andrew Thank you for your explanation but I do not understand this:

China is holding over 3 Trillion of dollars  of GOV debt and from what I read they are buying land and other investements... in USA..... with the money they are receiving for the products the build....for USA ......  and they still holding $3 trillion on Gov bonds...... I just cannot undesrtand, how they can be repaid? Usa hardly exports anything else apart from war items and defence industry products.. 

The three trillion of bonds have been mostly pledged and are not available to sale. China has currency controls and does not let its citizens or businesses buy more stuff in the USA or any other country. This has caused Chinese to be net seller of USA real estate. All of this Chinese infrastructure cost a lot of money and most of it was built with borrowed money. They have a positive trade with the USA but over all their trade balance is about even. Then they send a lot of money out of the country trying to buy friends and do infrastructure projects. China has ways to hide its real debt, but it is suspected to be twice indebted as the USA compared to its GDP.  China has most likely the fastest aging population in the world because of the one child policy and is facing a huge retirement crisis.  It population is expected to half by as soon as 2050. Chinese currency cannot be used in a large scale for international trade because of currency controls. They will not let enough out of the country to conduct huge amount of trade.

The Russia Ruble is presently being supported by gold. This is likely just a measure to get them thru the war.  Most countries are not wanting the rubles but wanting the gold instead. Russia has enough gold to do this for about one to two years. After that or when the war ends the ruble is likely to go back to being volatile.

As much as it might displease you the dollar will likely be with us for some time to come.

That is not your own writing style......... and the info you are posting.... only teh Chinese can know........ and are not stupid to tell you about it!

Do you know .... As many people know, crypto lending company Celsius suspended withdrawals from its platform late Sunday night.

Celsius wrote in a “Memo to the Celsius Community”:

Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.

Acting in the interest of our community is our top priority. In service of that commitment and to adhere to our risk management framework, we have activated a clause in our Terms of Use that will allow for this process to take place. Celsius has valuable assets and we are working diligently to meet our obligations.

The company said it is taking the action to “stabilize liquidity and operations”.

Pretty obvious your dollar and any other world... is fallling.......

Have a nice day proffessor!

[Wiz]

Andrew Thank you for your explanation but I do not understand this:

China is holding over 3 Trillion of dollars  of GOV debt and from what I read they are buying land and other investements... in USA..... with the money they are receiving for the products the build....for USA ......  and they still holding $3 trillion on Gov bonds...... I just cannot undesrtand, how they can be repaid? Usa hardly exports anything else apart from war items and defence industry products.. 

The three trillion of bonds have been mostly pledged and are not available to sale. China has currency controls and does not let its citizens or businesses buy more stuff in the USA or any other country. This has caused Chinese to be net seller of USA real estate. All of this Chinese infrastructure cost a lot of money and most of it was built with borrowed money. They have a positive trade with the USA but over all their trade balance is about even. Then they send a lot of money out of the country trying to buy friends and do infrastructure projects. China has ways to hide its real debt, but it is suspected to be twice indebted as the USA compared to its GDP.  China has most likely the fastest aging population in the world because of the one child policy and is facing a huge retirement crisis.  It population is expected to half by as soon as 2050. Chinese currency cannot be used in a large scale for international trade because of currency controls. They will not let enough out of the country to conduct huge amount of trade.

The Russia Ruble is presently being supported by gold. This is likely just a measure to get them thru the war.  Most countries are not wanting the rubles but wanting the gold instead. Russia has enough gold to do this for about one to two years. After that or when the war ends the ruble is likely to go back to being volatile.

As much as it might displease you the dollar will likely be with us for some time to come.

That is not your own writing style......... and the info you are posting.... only teh Chinese can know........ and are not stupid to tell you about it!

Do you know .... As many people know, crypto lending company Celsius suspended withdrawals from its platform late Sunday night.

Celsius wrote in a “Memo to the Celsius Community”:

Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.

Acting in the interest of our community is our top priority. In service of that commitment and to adhere to our risk management framework, we have activated a clause in our Terms of Use that will allow for this process to take place. Celsius has valuable assets and we are working diligently to meet our obligations.

The company said it is taking the action to “stabilize liquidity and operations”.

Pretty obvious your dollar and any other world... is fallling.......

Have a nice day proffessor!

Sorry I forgot to post the link.....to my previous post!

QTR's Fringe Finance

 

[AvHdB]

Andrew Thank you for your explanation but I do not understand this:

China is holding over 3 Trillion of dollars  of GOV debt and from what I read they are buying land and other investements... in USA..... with the money they are receiving for the products the build....for USA ......  and they still holding $3 trillion on Gov bonds...... I just cannot undesrtand, how they can be repaid? Usa hardly exports anything else apart from war items and defence industry products.. 

The three trillion of bonds have been mostly pledged and are not available to sale. China has currency controls and does not let its citizens or businesses buy more stuff in the USA or any other country. This has caused Chinese to be net seller of USA real estate. All of this Chinese infrastructure cost a lot of money and most of it was built with borrowed money. They have a positive trade with the USA but over all their trade balance is about even. Then they send a lot of money out of the country trying to buy friends and do infrastructure projects. China has ways to hide its real debt, but it is suspected to be twice indebted as the USA compared to its GDP.  China has most likely the fastest aging population in the world because of the one child policy and is facing a huge retirement crisis.  It population is expected to half by as soon as 2050. Chinese currency cannot be used in a large scale for international trade because of currency controls. They will not let enough out of the country to conduct huge amount of trade.

The Russia Ruble is presently being supported by gold. This is likely just a measure to get them thru the war.  Most countries are not wanting the rubles but wanting the gold instead. Russia has enough gold to do this for about one to two years. After that or when the war ends the ruble is likely to go back to being volatile.

As much as it might displease you the dollar will likely be with us for some time to come.

That is not your own writing style......... and the info you are posting.... only teh Chinese can know........ and are not stupid to tell you about it!

Do you know .... As many people know, crypto lending company Celsius suspended withdrawals from its platform late Sunday night.

Celsius wrote in a “Memo to the Celsius Community”:

Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.

Acting in the interest of our community is our top priority. In service of that commitment and to adhere to our risk management framework, we have activated a clause in our Terms of Use that will allow for this process to take place. Celsius has valuable assets and we are working diligently to meet our obligations.

The company said it is taking the action to “stabilize liquidity and operations”.

Pretty obvious your dollar and any other world... is fallling.......

Have a nice day proffessor!

Sorry I forgot to post the link.....to my previous post!

QTR's Fringe Finance

 

Let’s do the easy stuff first, the writing style is consistent with Tex, I think he wrote the post above.

Regarding Celsius this has nothing to do with the US dollar.

There are two possible explanations for the situation.

1.) There platform is overwhelmed and can not handle the demand on its service. (I doubt it)

2.) It is in fact a novaPonzi scheme.

Bear in mind Celsius is a trading platform. It would be interesting to read Andrew’s opinion and take.