Phil:
Any time you want to get rid of some of that "useless paper", I'll
take it off your hands.
--- In lpsf-discuss@yahoogroups.com, "Philip Berg" <philzberg@...>
wrote:
The dollar is a piece of paper. The idea of it being oil based is
largely in the mind, just as the idea that it is based on the taxing
ability of the us government is largely in the mind. There is some
reality in both ideas, but at the end of the day the only thing that
backs it up is faith. It will thus one day suffer the loss of faith
like every fiat paper currency before it.
then there is the question of what underlies the faith. To some
extent there is faith that dollars can be used to buy things,
especially the one thing that forms the largest andmost global
market, oil. Now that oil can be and is traded in euros, central
bankers and other large institutions have more faith that euro's may
maintain purchasing power over the medium to long term in terms of
the ability to pay for oil.
Prior to the establishment of euro based oil bourses, anyone who
wanted to buy oil in quantity in the futures markets had to buy it in
dollars. This of course was not absolutely required, but because it
was the way most people priced oil, it was the way most of it traded.
Wether the agreement with the Sheiks was explicit, or not, the
observed behaviour over the past nearly 40 years is that the largest
producer Saudi Arabia looked to the US for military protection, and
perhaps in exchange, it priced and exchanged it's oil in dollars.
Putin has also been attempting to price russian oil contracts in
rubles, but participants have been resistent because of perceived
ruble instability, and thus much of Russian oil is priced in euro's
or dollars in future looking contracts.
None of this makes perfect sense, as we are dealing in the realm of
perceptions of value present and future, of essentially worthless
paper.
However, the events of the last fourty years, ie , the way the
participants in the political , economic, and arena have behaved,
tends to lend support to the hypothesis that faith in the green paper
in the minds of millions may be based on it's perceived value versus
oil.
The largest market participants, the Saudi's, have participated in
maintaining the status quo of perceived value by continuing to accept
dollars for oil.
From: Starchild
To: lpsf-discuss@yahoogroups.com
Sent: Monday, March 19, 2007 4:45 AM
Subject: [lpsf-discuss] Re: Individual interests vs. government
interests
Phil,
This is all very interesting, but there are many aspects of what
you say that are either confusing and/or don't make sense to me.
What, in concrete terms, do you mean for example by "an oil based
dollar?" Are you saying that all the world's oil buyers, with the
exception of those buying Iranian oil, pay for that oil in dollars,
that European oil importers do not pay in Euros, that Japanese oil
importers do not pay in Yen? Are you saying that oil is the only
commodity for which this is true, and thus it is unique in world
markets?
My understanding of how the oil trade works is that the amount of
oil a dollar will buy is determined by the amount of oil production
relative to the value of the dollar. The rulers of the oil producing
countries generally try to manage production so that the price of oil
goes neither too law nor too high. They don't want the price too high
because because (a) if the price gets too high, then alternative
energy sources start becoming more economically viable, which
undercuts the market for oil, and (b) they also have a vested
interest in the health of the U.S. economy. This interest is not
primarily due to U.S. military protection, but because they too are
part of the world market and would be hurt by an economic downturn in
the largest economies, which would suffer if the price of oil became
too high. Most of the oil-producing states owe the lion's share of
their economies to oil sales, and are arguably even more dependent on
paying customers for their oil than more diversified economies like
the United States are dependent on the oil itself. But they also
don't want the price of oil too low, because they want to make money.
And even if companies based in countries other than the United States
*are* buying oil in dollars, how is that money being "recycled to New
York" as you put it? Sure the banks in the U.S. federal reserve
system make some cut when the U.S. government prints more dollars,
but how do they make money when an oil buyer in Germany uses dollars
to pay an oil seller in Nigeria?
Also, I'm not sure it makes sense to talk in terms of things
like "the U.S. manufacturing base" as if it we were living in a world
of national command economies. In a very real sense, Shanghai is
probably more a pillar of the "U.S. manufacturing base" than is
Detroit. So what? Does this make Shanghai better off? Perhaps there
is value in comparing unemployment rates (or at least there might be
if these numbers were calculated based on reality), but "balance of
trade?" If a banker regularly pays somebody at a deli to make her a
sandwich, and somebody else down the street to make the flower
arrangements she takes home to her husband, and the banker doesn't
make anything that she sells to the people who run the deli and the
flower shop, does that negative "balance of trade" necessarily make
the deli owner and the flower owner better off than the banker? Of
course not. They're all trading in money, and they all buy concrete
stuff with that money, regardless of whether what they produce in
their work is a concrete product or an intangible service. So why
would it work differently at the international level? Maybe it does,
but I have yet to hear an explanation that really makes sense.
Perhaps you can take a stab at it.
Meanwhile, you say that paper monetary instruments like dollars
and U.S. treasury certificates are flowing to Chinese manufacturers
and hence to the Chinese central bank(s), whereas if the regime in
Beijing were operating in a free market fashion, they would be
getting gold instead. Do I understand you correctly to be saying
that "those Chinese very smart" for taking paper instead of gold?
Doesn't such an analysis fly in the face of your own investment
strategy as an individual of buying gold?
Love & liberty,
<<< starchild >>>
The present currency system is broken and does not serve the
interests of the american people, except wall street. The system was
initially established by fiat in 1944 in Bretton Woods when the US ,
due to it's complete military dominance owned the lions share of gold
in the world and the lions of surviving manufacturing capacity and
was thus able with the guidance of Wall Street Bankers to impose on
the world the doller standard. The dollar standard became compleately
faith based in 1971 when all vestiges of physical backing were
removed. What followed was a rapid depreciation of the dollar vs
gold and vs oil, as producers of oil sought some material trade for
thier very material petroleum. The slide in the dollar was arrested
and the rise in gold and petroleum prices arrested by the tacit
establishment of an oil based dollar. The powers in the middle east ,
in exchange for the military umbrella of the US agreed to recycle
petro dollars to New York. Saddam violated this agreement by trading
oil in euros and gold. Teheran has recently begun trading oil in
euros.
On the other side of Asia, China has engaged in a very
successful mercantilist ploy. By consistently manipulating the
exchange rate with dollars, keeping it fixed for a very long time, it
has maintained it's status as the worlds low cost producer. The
resulting flood of dollars are used to buy US treasuriies and
mortgage backed securities, of which China now has a trillion dollars
worth. By using the dollars it takes in to buy treeasuries rather
that it's own currency in the open market of currencies, it keeps
it's currency very cheap and thus it's goods cheap.
This has hollowed the US manufacturing base and sent it to
Shanghai.
Lets give a recent example...
LETS FOLLOW THE MONEY.
I neede American Flags to deck the platform of our Peace rally
tomorrow. The Chinese made flags were less than half the price of the
made in USA flag. I bought about 100 bucks of flags and poles.
Lets say just for simplicity the Flags made all its money on
the shipping and handling charge, so lets say it paid 100 for the
flags to a hypothetical Shanghai flag company. Mr. Shanghai gets the
hundred dollars and goes to the bank with it. He has to pay his rent,
his suppliers and his workers in Yuan Remembi so he gives his local
bank the hundred dollars and gets a bunch of Yuan Remembi. The bank
now has this hundred bucks, but it needs yuan remembi to fill it's
versatellers. It sends the hundred dollars to the china central bank
and they send a bunch of yuan rembi. Now here comes the crux. In a
free market, the big money center banks of a country would also need
to get yuan remembi to replace the ones they just shipped off to the
local bank in Shanghai. A free market banker would go into the world
currency markets and use the one hundred dollars to buy the bunch of
yuan remmeebi to replace the ones he sent off to shanghai. But the
chinese central bank is not a free market entity. It does not want to
buy yuan remembi in the world currency markets, for to do so would
decrese the supply of Yuan Remembi in the world markets and increse
the supply of dollars. In time there would be glut of dollars and a
shortage of yuan. The value of the dollar would decrease. The dollar
would buy less. Chinese goods would seem more expensive to American
consumers. The chinese central bank does not want that. It wants to
increase it's manufacturing market share by keeping chinese goods
cheap in the US. So what does the chinese central bank do with hte
hundred dollars it got from this libertarian buying american flags.
It buys a fannie mae bond that fiances part of a mortgage in Nob
Hill.
But where does the chinese central bank get the bunch of Yuan
it needs to send to the bank in Shanghai , Easy, my little libs. It
prints it out of thin.air.
Eventually the Chinese will tire of the resulting inflation,
but by then they may have destroyed the entire manufacturing base of
the United States.
Those Chinese very smart.
Wall Street bankers because they sell all these bonds to
china , and these bonds underlie the housing bubble and all the rest
of the uS speculative ponzi economy. Goldman Sachs is the most
profitable company per employee of any large company in history,
giving over 18 billion in bonuses to it's manhatten based employeses
last december. Goldman sits on the FRB, owns shares of the FR and
has it's ex CEO's serve as treasury secretaries under both Bush and
Clinton 1.
Under the standard prioor to 1944, if country had a large trade
surplus such as china does, then gold would flow into that country.
Gold would flow out of the country that had the deficit. The money
supply in the country that had the trade deficit, the us in this
example, would decrese as gold flowed out. With less money, around,
there would be price deflation. With less money chasing the same
amount of goods, there would be less money to go around for each
chicken ,each pot ,and each donkey and each car. Domestically
produced items would go down in price.
Meanwhile , in this example, more gold would flow to china.
More gold would translate to more money floatting around in China.
There would be more money chasing each chicken, each pot, each
donkey, and each bowl of rice.
Prices would go up in China. Chinese goods would become more
expensive. Some chinese consumers would start buying cheaper us goods.
thus in a world where all money was backed by gold, long term
trade impbalances wwere self balancing.
the worlwide acceptance of gold from the fall of Napolean to
the outbreak of WW1 may have contributed to nearly 100 hundred years
of peace.
the widespread adoption of central banks, and the imposition of
fiat paper led to the downfall fo economic stability and the onset of
WW1.
In this post I distilled the essence of the US economic dilema.
It is hard to find this information in such a distilled format. It
took me a long time of digging and thinking to get to what is
distilled here. Please reconize this as pearls and re read it till
you understand. You will then know more than all the idiots in
Congress, except one, aall of the bankers in San Francisco, and for
certain more than the board of Sups or Lou Dobbs, or god forbid Bill
O'Reilley.
Please reread,until you understand. Nothing but war destroys a
city more surely than economic catastrophy. The bankers keep the
disasters coming. If you bury your head in the sand , your ass is a
target.
----- Original Messag
e -----
From: Starchild
To: lpsf-discuss@yahoogroups.com
Sent: Sunday, March 18, 2007 8:28 PM
Subject: [lpsf-discuss] Re: Individual interests vs. government
interests
Derek,
I agree with your implicit argument that consumer interests
should outweigh government interests. Individuals should be free to
invest when and where they choose, in accordance with their own
interests and regardless of the interests of any particular
government, including the United States government. If the economic
or strategic interests of government (and what makes government
interests more "strategic" than individual interests?) are put ahead
of those of the individual, then the people are effectively serving
government instead of government serving the people.
Love & liberty,
<<< starchild >>>
Eric:
A more rational approach would be to continue foreign investing
when
it benefits us economically or strategically to do so. To not
do so
is akin to pointing a gun at one's head and threatening to
shoot.
As an example, which should be obvious if you think it through,
as
harmful as it would be if a country levied an enormous tarriff
on US
goods, it would be even MORE harmful for American consumers for
the
US to respond in kind.
-Derek
--- In lpsf-discuss@yahoogroups.com, "eric dupree"
<dupreeconsults@> wrote:
>
> When foreign investors stop, we need to stop foreign
investing.
> Let 'em protect their own freedoms and everything else.
> We need them like we need a hole in our head/pocket.
> > From: Rob <robpower@>
> > To: lpsf-discuss@yahoogroups.com
> > Subject: [lpsf-discuss] Re: Fw: U.S. Rep. Ron Paul, a Texas
Republican known for his Libertarian views,
> > Date: Thu, 15 Mar 2007 14:45:52 -0000
> >
> >
> > While I'm certainly not a currency expert, I think the
following
page
> > shows why GDP alone, ignoring other factors like deficits,
is not
a
> > good predictor of a strong dollar. In fact, GDP can rise,
but if
> > deficits outpace the rise in GDP, the dollar actually
becomes less
> > attractive to foreign investors:
> >
> > http://www.atimes.com/atimes/Global_Economy/FJ14Dj01.html
> >
> > Rob
> >
> > --- In lpsf-discuss@yahoogroups.com, "Derek Jensen"
<derekj72@>
wrote:
> > >
> > >
> > > This isn't quite true what you say about relative size of
euro
and dollar.
> > >
> > > The countries in the European Monetary Union have a
collective
> > > Nominal GDP of $10.1 trillion. The United States has a
nominal
> > > GDP of $12.5 trillion. (2005 IMF data)
> > >
> > > -Derek
> > >
> > > --- In lpsf-discuss@yahoogroups.com, "Rob" <robpower@>
wrote:
> > > >
> > > > You know, he's so close to being right that it's all
the more
> > > > frustrating that he remains so wrong.
> > > > > His argument about socialism being doomed to failure
is
dead-on. But
> > > > he misses the point that building a Berlin Wall along
our
Southern
> > > > border is just as doomed to failure as the real Berlin
Wall
was.
> > > > > There's a very good reason that the Dollar is no
longer the
favored
> > > > currency in the world, and it's not the war in Iraq.
It's
that
> > > > investors prefer big currencies. When you add up the
wealth
of all of
> > > > Europe, the Euro becomes a bigger currency than the
Dollar.
The
> > > > Dollar will never again become the dominant currency.
But an
Amero
> > > > most certainly would dominate (at least for a little
while,
until the
> > > > EU expanded or Asia adopted a single currency).
> > > > > If Ron Paul would get over his fear of Mexicans and
gays,
I'd vote
> > > > Republican for the first time in more than ten years.
But,
sadly,
> > > > just like the socialist regimes he mentioned, his own
vision
of a
> > > > walled-off Ozzie and Harriet version of the United
States is
doomed to
> > > > failure. I only hope most Libertarians realize this and
support our
> > > > own party's candidates instead.
> > > > > Rob
> > > > > P.S. I wonder if Ron Paul would be so opposed to a
single
currency if
> > > > it excluded Mexico and only included the U.S. and
Canada and
still
> > > > called it a Dollar. (We already have the highways into
Canada like
> > > > the one proposed for Mexico, and I don't hear him
calling for
those to
> > > > be bulldozed.) If he'd support such a U.S.-Canadian
currency, then I
> > > > think it's obvious what he thinks of Mexicans.
> > > > > --- In lpsf-discuss@yahoogroups.com, <dredelstein@>
wrote:
> > > > >
> > > > > http://www.worldnetdaily.com/news/article.asp?
ARTICLE_ID=54660
> > > > > > > > > Ron Paul announces White House bid
> > > > > Texas Republican says nation has strayed from
Constitution
> > > > > > > > > > > U.S. Rep. Ron Paul, a Texas Republican
known for his
> > > > libertarian views, today announced he will vie for the
GOP
> > > > presidential nomination next year. > > ...
> > > > > He said the collapse of the Soviet system surprised
many, but
> > > > not devotees of freedom. > > > > They, he said, "have
> > > understood for decades that socialism was
> > > > doomed to fail. Communism, like all socialism, failed
intellectually
> > > > and failed practically. And so too will the
welfare/warfare
state
> > > > fail, and then our cause will be heard. The love of
liberty
will not
> > > > die." > > ...
> > > > > He's been especially vocal in his denunciations of
plans such
> > > > as the "Trans-Texas Corridor," a superhighway project
that
opponents
> > > > argue would be used to bring Chinese goods through
Mexico
directly
> > > > into and through the U.S. > > > > Why? The ultimate
goal,
> > > he said, is not simply a superhighway,
> > > > "but an integrated North American Union - complete with
a
currency, a
> > > > cross-national bureaucracy and virtually borderless
travel
within the
> > > > union. Like the European Union, a North American Union
would
represent
> > > > another step toward the abolition of national
sovereignty
> > > altogether." > > > > Plans for such a "North American
> > > Union" were cited as the No.
> > > > 1 story on WND's list of 10 most underreported stories
for
> > > 2006. > > > > The January 2007 edition of WND's monthly
> > > Whistleblower
> > > > magazine, which explores this topic in-depth, is
titled "PREMEDITATED
> > > > MERGER: How our leaders are stealthily transforming the
U.S.A. into
> > > > the North American Union." > > > > Paul would join a
> > > field that features John McCain, Mitt Romney
> > > > and Rudy Giuliani, but also could include Newt
Gingrich, Tom
Tancredo,
> > > > Duncan Hunter, Sam Brownback, Mike Huckabee, Tommy
Thompson,