Post by fredorbob on Sept 8, 2009 21:23:32 GMT -6
US continental money supply:
There is 0.8 trillion dollars in cash floating around in the US (M0 money supply). en.wikipedia.org/wiki/Money_supply
The 'petro dollar', US money outside of the US:
Cumulative U.S. Trade Deficit Soars to $9.13 Trillion in 2008
petemurphy.wordpress.com/2009/02/17/cumulative-us-trade-deficit-soars-to-913-trillion-in-2008/
Notice how the Cumulative U.S. Trade deficit number of 9 trillion is almost identical to the no longer published M3 money supply listed by the Federal Reserve.
Last year there was a 700 billion dollar trade deficit, what does a trade deficity mean? Well if I give a Mexican company dollars in exchanged for a Mexican product, that means dollars goes out while the consumer item comes in.
The 700 billion trade deficit literally means 700 billion dollars last year left the country. What does this mean if the Federal Reserve stops printing money? That means the Continental US WOULD BE OUT OF DOLLARS IN 14 MONTHS. (Money supply in cash is 800 billion, and 700 billion leaves the country every year) We'd all be bartering in Euros, Pesos, or the Canadian dollar because we literally would be out of cash. This forces the Federal Reserve to print 700 billion dollars because of the 700 billion dollar trade deficit, because one of the primary jobs of the Federal Reserve is to keep the dollar supply as CONSTANT.
Ever since the free trade utopia of NAFTA the cumulative trade has become about 9 trillion dollars, that means there are literally 9 trillion dollars or IOU's for dollars outside of the US. Some call this dollar the "world reserve currency" or "Petro dollar". That is inaccurate, it is the free trade dollar.
Now imagine the dollar's crash. When the world no longer values the dollar, the dollar's plunge around the world will be quick and immediate, i'm guessing it will last a week. The dollar's value will plunge to almost zero around the world as the "world reserve currency". That means foreigners will no longer accept US dollars to purchasing foreign items like OIL.
However while foreigners will no longer value the dollar, guess who will still see the dollar as something as valuable? You guessed it, Americans. All 9 trillion of those dollars floating outside the US will quickly make its way back into the Continental US, floading the 0.8 trillion dollars in cash with 9 trillion dollars. There will be a quick 10X inflation where 100 dollars will have the purchasing power of 10 dollars.
Now whatever happens it is not the Federal Reserve's fault, if the Federal Reserve can be faulted for anything then it would be people working there and their personal views about free trade. (they're bankers, and all bankers love cheap foreign labor)
There is 0.8 trillion dollars in cash floating around in the US (M0 money supply). en.wikipedia.org/wiki/Money_supply
The 'petro dollar', US money outside of the US:
Cumulative U.S. Trade Deficit Soars to $9.13 Trillion in 2008
petemurphy.wordpress.com/2009/02/17/cumulative-us-trade-deficit-soars-to-913-trillion-in-2008/
Notice how the Cumulative U.S. Trade deficit number of 9 trillion is almost identical to the no longer published M3 money supply listed by the Federal Reserve.
Last year there was a 700 billion dollar trade deficit, what does a trade deficity mean? Well if I give a Mexican company dollars in exchanged for a Mexican product, that means dollars goes out while the consumer item comes in.
The 700 billion trade deficit literally means 700 billion dollars last year left the country. What does this mean if the Federal Reserve stops printing money? That means the Continental US WOULD BE OUT OF DOLLARS IN 14 MONTHS. (Money supply in cash is 800 billion, and 700 billion leaves the country every year) We'd all be bartering in Euros, Pesos, or the Canadian dollar because we literally would be out of cash. This forces the Federal Reserve to print 700 billion dollars because of the 700 billion dollar trade deficit, because one of the primary jobs of the Federal Reserve is to keep the dollar supply as CONSTANT.
Ever since the free trade utopia of NAFTA the cumulative trade has become about 9 trillion dollars, that means there are literally 9 trillion dollars or IOU's for dollars outside of the US. Some call this dollar the "world reserve currency" or "Petro dollar". That is inaccurate, it is the free trade dollar.
Now imagine the dollar's crash. When the world no longer values the dollar, the dollar's plunge around the world will be quick and immediate, i'm guessing it will last a week. The dollar's value will plunge to almost zero around the world as the "world reserve currency". That means foreigners will no longer accept US dollars to purchasing foreign items like OIL.
However while foreigners will no longer value the dollar, guess who will still see the dollar as something as valuable? You guessed it, Americans. All 9 trillion of those dollars floating outside the US will quickly make its way back into the Continental US, floading the 0.8 trillion dollars in cash with 9 trillion dollars. There will be a quick 10X inflation where 100 dollars will have the purchasing power of 10 dollars.
Now whatever happens it is not the Federal Reserve's fault, if the Federal Reserve can be faulted for anything then it would be people working there and their personal views about free trade. (they're bankers, and all bankers love cheap foreign labor)