U.S. runs out of Credit (from ATSNN)

Originally posted by slank
I am wondering if some of the previously suggested thoughts of it being intentional might be true. Sort of like let the Rich r*pe America and let it collapse on the poor and middle class.

On the nail!
The rich can always convert their wealth to a strong foreign currency.
The rich can always (and do) buy gold and other precious commodities not affected by the U.S. economy.
The currency of the United States is a paper currency, Richard Nixon removed the U.S. from the Gold Standard so that the USA would not have to trade gold for currency to foreign nations.

Chuck those rich clued in have sold all their US dollar assets already and bought euros (the plan started 4 years ago when Bush assumed control). Since then the US dollar has lost 50% of its value against the euro and just made another major move down so expect another 20% devaluation by this time next year.

Did you know that the capital flows report released 2 days ago showed the only ones left willing to lend to the US are China and Japan soley to keep their currencies down against the dollar. That is right without the central banks of china and japan the USA would be up #e creek without a paddle.

For a hint Warren Buffet has sold most of his stock in the US and has been using this massive stockpile of cash to buy foreign currencies. Wonder why hehe

The only fools left holding the bag are your economic slave middle classmen thinking they are smart because their house prices are up 30% while in real terms they stand to lose about half their wealth. These are also the same fools who were pursuaded to have their retirement funds invested in Wall St . These are also the same fools who will be standing in line to re-elect Bush lmao.

August current account deficit was $54 billion. Net capital inflows to cover the bill down to just $59 billion. For the first time in 34 years private investors were net sellers of US bonds i.e. rushing for the exits.

Look out America you have just been PUNKED!

I believe it was intentional all right, but not in the way some suggest. But it backfired and seems to be bringing about exactly what was set out to beundermined.

The U.S treasury and economy can sustain a massive downturn, more so than any other nation because it is the U.S dollar that most trade is tied to. Take oil for example. It does not matter how high the price of that commodity, a U.S dollar will always be worth a dollar. But 1 euro or 1 yen or 1 bolivar when faced with a higher U.S dollar in trade, will never be worth 1 euro, or yen, or bolivar. The cost of doing business with the U.S for purchasing US products becomes expensive.

The trade deficit between the US and Europe was growing rapidly since 2001, meaning that imports exceeded exports. The EU was also taking shape and threatening to become a powerful unity, backed by the use of a single currency, a currency which was being considered as a replacement of the USD in OPEC, the consequences of which would not only signal the possible beginning of a new trade currency, but an immediate increase of its value. The US would then be faced with purchasing its most needed product with a dollar that purchased less oil than before, and subject to unfavourable exchange fluctuations as the price of crude was increased in the Euro.

While it is so that the US imports more from around the world than it exports, many of the products imported from Europe are also purchased elsewhere, countries whose currencies are still valued less than the USD; Canada, Mexico and South America, and increasing import from those countries would keep the cost still relatively inexpensive. Keeping the USD low, as was the stated intent by Snow, was going to bring about heartache for importers of European goods, drive businesses into bankruptcy and the US economy down, but as the wealthiest country in the world with the controlling currency, it can take that massive hit. The object was to reduce the trade deficit with Europe by making the cost of importation prohibitive. Europe's economy highly dependent on export to the US would fall apart, the Euro would go into a tailspin and the budding EU would crumble. Talk of OPEC switching currency would fade and the mighty greenback survives.

Once in full control again, the debt recorded on the books in US dollars miraculously starts to decline as the purchases which were not subject to trade in US dollars have lost a significant value due to foreign exchange.

But the ploy backfired, the war drove a wedge between the key EU nations and the US, and Blair could not fix it. In fact, import balances from the EU did drop significantly, but the EU nations grew in size, dug their heels in and resisted the overthrow. The resistance lasted longer than intended causing the US economy to slide past the threshold of a minor disruption. While the war in Iraq made matters worse with the constant attacks on the Iraqi oil pipelines seriously disrupting the much needed increases in oil and doubling the price of crude in US dollars but not having the same effect on the now inflated Euro.