Joined: Sep 14, 2004 Posts: 6426 Location: Rural Virginia
Posted: Wed Jun 25, 2008 11:49 am Post subject: Re: Financial Tsunami
Kingcoal wrote:
Heineken wrote:
MrBill wrote:
I was trying to stay out of this thread to be honest! ; - )
Confiscation or other draconian measures like capital controls cannot be ruled out as the USA goes bankrupt. They are already passing laws to make renouncing US citizenship (see Trader's Corner) harder and more expensive to give up. And the Patriot Act and anti-money laundering procedures now forced on bank and non-bank financial institutions is as much about controlling offshore financial centers as figthing terrorism. The CFTC and SEC even try to get control over regulation in other countries by for example wanting to supervise the ICE (currently regulated by the FSA) or Rule 144B about that securities can be marketed to US citizens at home or abroad. Someone has to repay the trillions in debt that the USA already owes as well as pay for ongoing unfunded future liabilities. If I was a US taxpayer I would be very nervous. There is nowhere to run and nowhere to hide. At least not legally.
The US is already "bankrupt" and has been for years.
There are plenty controls that would be considered draconian by US standards in place overseas. A 50% or 60% income tax rate might be considered draconian by any reasonable standards. Shredded property rights might be considered draconian. Etc. Everyone should be nervous, everywhere. As critical as I am of the US, I feel lucky not to live in a REALLY scary place like Nigeria, Turkey, or 95% of other countries.
The record of the US of late combines greater restrictions and threats, as you've catalogued, with greater incompetence and more ineffectualness. This is typical of a dying empire. However, the election of Obama could reverse some of these trends.
Physical gold consists of zillions of small objects that are easily concealed by private individuals. Not even the Nazis could find all the gold of the Jews they terrorized. The notion of US agents fanning out across the nation looking for gold is ludicrous. It would be easier to confiscate land.
Yes, anything can happen. But a pogrom by the US government against its own citizens on the scale you imply would be accompanied by the end of everything anyway. And, under those circumstances, as I said before, the dollar would be rendered worthless and gold would become even more valuable, with the result that it would be concealed ever more cleverly and held on to ever more fiercely by individuals---defended with their own lives.
Define 'bankrupt'. The US is still able to borrow money to pay it's debts, the only reason why a business entity declares bankruptcy is to get protection from creditors.
The definition of bankruptcy is much like the definition of insanity. There's a legal definition, and then there's the definition we apply as common-sensical individuals.
The US is borrowing money to pay the INTEREST on its debt, while the debt, which is now unpayable, keeps increasing at dizzying rates. For me, that's a good working definition of "bankrupt."
The US govt. will never be able to pay off its debt. It's doubtful it will ever even be able to reduce its debt. Its currency is now severely debased. Therefore it's bankrupt.
The creditors don't apply because the US will use military force, if necessary, to keep them from collecting. And what could they collect, anyway? You can't get juice out of a dried-up old turnip. _________________ "Actually, humans died out long ago."
---Abused, abandoned hunting dog
"Things have entered a stage where the only change that is possible is for things to get worse."
---Me and my brother
Joined: Dec 07, 2005 Posts: 1821 Location: Australia
Posted: Wed Jun 25, 2008 10:35 pm Post subject: Re: Financial Tsunami
Reportedly published in the Wayne Madsen Report;
Quote:
WMR's United Nations sources report that there has been a sudden rush in requests for foreign exchange wire transfer requests from New York City banks. The sudden demand for transferring funds abroad has resulted in a 24 to 48-hour processing delay due to the sheer volume of requests.
Foreign employees at the United Nations are transferring their money from accounts at the United Nations Federal Credit Union (UNFCU) and other New York City banks, both domestic and foreign-owned, and the move has been sudden.
There has been no explanation for the sudden wire transfer activity, although the rumor mill suggests fears of a sudden economic collapse and/or a U.S. and Israeli military attack on Iran, which could touch off a wider regional conflict.
Sorry no link, got this from LeMetropoleCafe (paid site) and Wayne Madsen's site is also just for paying readers. _________________ Lets take a ride, and run with the dogs tonight
In suburbia
You cant hide, run with the dogs tonight
In suburbia
- Pet Shop Boys
Posted: Thu Jun 26, 2008 12:02 am Post subject: Re: Financial Tsunami
TreeFarmer wrote:
Have you all seen the movie "The Grapes of Wrath"? Even though the Joad family was homeless they still had gas for the truck.
This time around there will not be any gas...
TF
They had gas AND they had grapes, wrathful ones, but fruit, none the less. Who can afford fresh produce anymore? Those Joads were living large in the "Great" Depression. Wait'll people get a load of the "not so great depression"!
Posted: Thu Jun 26, 2008 12:16 am Post subject: Re: Financial Tsunami
MrBill wrote:
I was trying to stay out of this thread to be honest! ; - )
Confiscation or other draconian measures like capital controls cannot be ruled out as the USA goes bankrupt. They are already passing laws to make renouncing US citizenship (see Trader's Corner) harder and more expensive to give up. And the Patriot Act and anti-money laundering procedures now forced on bank and non-bank financial institutions is as much about controlling offshore financial centers as figthing terrorism. The CFTC and SEC even try to get control over regulation in other countries by for example wanting to supervise the ICE (currently regulated by the FSA) or Rule 144B about that securities can be marketed to US citizens at home or abroad. Someone has to repay the trillions in debt that the USA already owes as well as pay for ongoing unfunded future liabilities. If I was a US taxpayer I would be very nervous. There is nowhere to run and nowhere to hide. At least not legally.
My husband and I live in Canada, but have to pay U.S. taxes as he is American and he still earns an income from the US. I know we are just going to get creamed in the future and there is nada we can do about it. I did talk him into selling some real estate we owned there about a year ago and getting the proceeds the heck out of there and into Canada. It's hard to convince someone that capital controls are more likely than not.
I don't think they go after gold though. It's one of the holdings of choice for the wealthy, their most important constituents.
Posted: Thu Jun 26, 2008 1:59 am Post subject: Re: Financial Tsunami
NTBKtrader wrote:
Is the US gov trying to make it harder to 'financially' renounce US citizenship? If so, I didn't really find anything on that. I know the IRS is increasingly going after offshore tax shelters, but that is a different issue in my opinion.
Here is the article I was refering to:
UPDATE: escaping the taxman and other unintended consequences
Quote:
Under the proposed legislation, expatriates surrendering their citizenship with a net worth of $2m or more, or a high income, will have to act as if they have sold all their worldwide assets at a fair market price. If the unrealised gains on these assets exceed $600,000, capital-gains tax will apply. A study by the Congressional Budget Office guesses that the new law will progressively net the government up to $286m over five years. It is unclear, however, why people would suffer the consequences if they did not expect to save money in the long run by escaping American taxes.
That expats want to leave at all is evidence of America's odd tax system. Along with citizens of North Korea and a few other countries, Americans are taxed based on their citizenship, rather than where they live. So they usually pay twice—to their host country and the Internal Revenue Service. As this makes citizenship less palatable, Congress has erected large barriers to stop them jumping ship. In 1996 it forced people who renounced citizenship to continue paying income taxes for an extra ten years. Theoretically, the new law allows for a cleaner break.
But even as the law tries to prevent people from renouncing their citizenship, it may have the opposite effect. Under the new structure, it would make financial sense for any young American working overseas with a promising career to renounce his citizenship as early as possible, before his assets accumulate. For everyone else, plunging stock and property prices mean now may be as good a time as any to hand back the passport, says Kurt Rademacher, a partner at Withers, a global tax-planning firm.
So it used to be that someone with a large, unpaid tax bill might conveniently move to London or some other tax haven for a few years, and then renounce their US citizenship before realizing gains on unsold assets for example. Now the IRS wants its pound of flesh before they can give up their citizenship.
As the economic noose tightens more laws like this will no doubt come into effect. It was only two years ago that the US announced a huge tax amnesty for corporations to repatriate profits from abroad reducing the effective tax rate from 40 to 5% if I remember correctly? That still netted billions of dollars for the state, but more importantly it brought that capital back onshore.
Quote:
Federated Market Opportunity Fund, with $1.8 billion of assets, is designed for investors who are convinced that the market is heading for a slump, the Wall Street Journal said in its ``Fund Track'' column.
The Pittsburgh-based fund differs from other bearish funds, which use short-selling or buy commodities such as gold, in that it has a great number of international investments, the newspaper said.
Steve Lehman, the fund's manager, judges that the U.S. financial system is in worse shape than many observers believe and predicts many years of diminished economic growth, the Journal said.
``At major turning points, the crowd tends to be wrong,'' he argues; he avoids big U.S. stocks, going into areas most mutual funds avoid, such as currencies and commodities, according to the newspaper.
Lehman admits that Market Opportunity, which has returned 4.75 percent a year on average for the past five years, doesn't do well in a rising market, but he's sure that there's now ``a much more favorable environment,'' the Journal said.
His favorite shares at present are Canada's Barrick Gold Corp., which explores for gold, copper, silver and zinc, and Valero Energy Corp., a U.S. oil refiner, the newspaper added.
Source: June 25 (Bloomberg)
I would not be too proud of a 4.75% annual return either! ; - )) _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Joined: Dec 06, 2005 Posts: 847 Location: Stopped at the border.
Posted: Thu Jun 26, 2008 10:29 am Post subject: Re: Financial Tsunami
The only option I can see to get out of this is for the Fed to continue buying bad debt from damaged financial institutions then turn around and package that debt as semi-sovereign property holdings and sell it to the Arabs and the Chinese. Let's say semi-sovereign means possessed of local voting rights and some other rights heretofore reserved for citizens only. That way the holders of the semi-sovereign debt can own the ghost towns and the strip malls. They will initially think that they are getting a good deal, until they want their capital out of it in order to finance improvements at home and discover the only way to realize anything from their investment is one month at a time in a very deflated percentage yield environment.
The sale of semi-sovereign packages would serve nicely to contract the money supply internationally. Coming on the heels of the deflationary contraction now underway domestically it would put an extended cap on the hyperinflation hypothesis. This would give the US time to try and complete its endeavor in the Middle East, to lock up enough production that it ensures the dollar as reserve currency throughout the end cycle of oil. After that is done reinflation is then possible and acceptable (will even be called out for by Joe Sixpack).
It will work until it enters the military phase. They have been naive to believe that they can control the Middle East. The very players they trust the most will undermine them. Not to mention the plethora of international enemies that such a policy will make as the screws tighten. _________________ "Hope encourages men to take risks; men in a strong position may follow her without ruin, if not without loss. But when they stake all that they have to the last coin (for she is a spendthrift), she reveals her real self in the hour of failure."
Joined: Sep 29, 2004 Posts: 2330 Location: Pennsylvania, USA
Posted: Thu Jun 26, 2008 3:47 pm Post subject: Re: Financial Tsunami
I don't know, a turd is a turd, be it polished or wrapped in nice packaging. It still stinks, everyone knows it, no one will buy it. _________________ "That's the problem with mercy, kid... It just ain't professional" - Fast Eddie, The Color of Money
Posted: Thu Jun 26, 2008 10:07 pm Post subject: Re: Financial Tsunami
evilgenius wrote:
The only option I can see to get out of this is for the Fed to continue buying bad debt from damaged financial institutions then turn around and package that debt as semi-sovereign property holdings and sell it to the Arabs and the Chinese.
Sounds like a great idea.
Maybe if we sell off the entire west coast of the USA (Alaska, Hawaii, Washington, Oregon, California) we can pay off our debts.
Posted: Fri Jun 27, 2008 1:50 am Post subject: Re: Financial Tsunami
It may be more cost-effective to invade smaller countries - maybe Caribbean Islands or Latin America - and sell them off instead? Canada would fetch a good price and they do not even have ice breakers or submarines that are water-tight. Easy pickings. You'll be home by Christmas. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Joined: Sep 14, 2004 Posts: 6426 Location: Rural Virginia
Posted: Fri Jun 27, 2008 7:01 am Post subject: Re: Financial Tsunami
It seems fantastic to contemplate, but I do think an invasion of Canada by a desperate America is a possibility in future. A starving populace would support any crazy scheme that promised dinner.
Canada is vulnerable. _________________ "Actually, humans died out long ago."
---Abused, abandoned hunting dog
"Things have entered a stage where the only change that is possible is for things to get worse."
---Me and my brother
Joined: Sep 29, 2004 Posts: 2330 Location: Pennsylvania, USA
Posted: Fri Jun 27, 2008 7:09 am Post subject: Re: Financial Tsunami
MrBill wrote:
It may be more cost-effective to invade smaller countries - maybe Caribbean Islands or Latin America - and sell them off instead? Canada would fetch a good price and they do not even have ice breakers or submarines that are water-tight. Easy pickings. You'll be home by Christmas.
Based on Roman history, that's not too far fetched. The Romans made nothing, imported everything and we able to do so by their constant annexing and conquering of neighboring regions. Oh yeah, I forgot, the Romans had gold/silver based money so maybe not such a good comparison. _________________ "That's the problem with mercy, kid... It just ain't professional" - Fast Eddie, The Color of Money
Posted: Fri Jun 27, 2008 7:18 am Post subject: Re: Financial Tsunami
All it would take is one ugly international incident like the Canadian's deciding to bomb the Baldwin Bros., or Celine Dion releasing another bad album, and thus a war with Canada would quickly spiral out of control. Quite plausable. If you ever wondered about Canada's military capability just ask your grandfather. They are still using the same technology today! ; - ))
Canadian Sea King helicopter. Over forty years in service.
Used (leaky) submarine purchased from Britain.
Canada should have a half-dozen of these babies running on nuclear to patrol the Arctic, and do search and rescue off our Atlantic and Pacific coasts as well as control illegal immigration and fishing, but that's right, they never got built. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Posted: Fri Jun 27, 2008 8:11 am Post subject: Re: Financial Tsunami
Kingcoal wrote:
Based on Roman history, that's not too far fetched. The Romans made nothing, imported everything and we able to do so by their constant annexing and conquering of neighboring regions. Oh yeah, I forgot, the Romans had gold/silver based money so maybe not such a good comparison.
On the way back from the Crusades, Richard the Lion Hearted conquered Cyprus, married a local bride here in Limassol (Lemesos), and then sold the island (twice). Later the British bought it back for 500 quid of Sterling. Slightly more than a string of beads, but still not too bad a deal. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Joined: Jun 20, 2008 Posts: 67 Location: Quebec/Ottawa, Canada
Posted: Fri Jun 27, 2008 8:12 am Post subject: Re: Financial Tsunami
Yes, our Canadian military is relatively pathetic, at least compared to the US who we have traditionally depended on should Russia come over the pole for us.
On the plus side, we've been running budget surpluses for many years and our formerly pathetic Canuck dollar is now virtually at par with US.
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