Darrell

Is California in Need of a Bailout?

The main cause for the California budget crisis is the fact that the dollar is functioning as a national currency and as a global currency.

Because the dollar is a global currency it is accepted as legal tender in most countries; meaning that one can use their dollars to buy goods, services and/or assets in most countries in the world.

And Central banks have become the storehouse for excess dollars.

The world economy has to accept the dollar no matter what; thus hiding the fact that our government has printed way more dollars that is economically needed. Because the dollar is a global currency, resource misallocations can be resolved by printing more currency rather than by prudent fiscal management of resources.

If our dollar was a only a national currency we would not have overpaid government workers, nor would we have generous fringe benefits for government workers, and many programs and activities that are currently funded, would not have seen the light of day. Our political leadership will be forced to live within a budget.

The dollar will be replaced by a global currency that will be regulated by policy wonks whose decisions will be free of national influence.

Our government, and every other government, will have to manage their government programs with limited funds. So it doesn’t matter if social unrest occurs, the problems that caused the social unrest will have to be resolved through community input.

Roger Wiegand: After Bitter Winter, Brace for Spring Meltdown

Yellowhoard, you are correct about China, they are putting their cash hoard to productive use; China intent is to create a sustaining wealth creating society that can support itself. China may make incorrect invest decisions during this transition process, but they are steadfast in their goals and I expect them to rebuild their society in the manner they choose, and not in the manner of think tank policy makers.

It is unfortunate for us that our leadership thinks, since our dollar is accepted as legal tender in most countries in the world, we are a wealth producing society that is so prosperous that it is producing excess capital. The exact opposite is the truth.

Best to you.

On March 18 Yellowhoard wrote:
I suspect China will spend their dollars on dams, highways, airports, water projects, etc...the kinds of things that we should be doing.

They will buy fewer US bonds and more natural resource assets.

This will result in higher prices here for raw materials and higher interest rates here as well.

Then, we will get the bill for this spendfest.

With big time inflation, higher interest rates and massively higher taxes, at best, we will have massive unemployment and the food riots won't be too destuctive to civil order.



On Mar 18 11:01 AM Darrell wrote:

> Yellowhoard, don’t you know that all the debt that our government
> owes to the rest of the world is dominated in dollars? If China,
> Russia, or any other country wants us to pay off our debt, all the
> Federal Reserve has to do is issue more dollars. So instead of holding
> a bag of debt one will be holding a bag of dollars.
>
> And forget about foreign dollar holders not buying any more treasuries;
> what are they going to do with their dollar holdings? One can do
> one of three things with their dollars or any other currency: spend
> it, invest it, or save it.
>
> If your goal is to preserve your capital, then invest it in wealth
> creating opportunities. Best to you!

Roger Wiegand: After Bitter Winter, Brace for Spring Meltdown

Yellowhoard, don’t you know that all the debt that our government owes to the rest of the world is dominated in dollars? If China, Russia, or any other country wants us to pay off our debt, all the Federal Reserve has to do is issue more dollars. So instead of holding a bag of debt one will be holding a bag of dollars.

And forget about foreign dollar holders not buying any more treasuries; what are they going to do with their dollar holdings? One can do one of three things with their dollars or any other currency: spend it, invest it, or save it.

If your goal is to preserve your capital, then invest it in wealth creating opportunities. Best to you!

Is Aurelian About to Be Sold?

China has proven that socialist governments have learned that it is better to tax the profits rather than try to make the profits.

Expect a large % of Aurelian Gold’s profit to be taxed by the Ecuadorian government in the name of the Ecuadorian people.

Goldcorp Down as Gold Price Falls

The demand for gold to be used as money will continue as long as there is no control over the amount of money that Central Bankers can produce; people will simply convert their cash holdings to gold holdings.