The Wounded Eagle: The Twilight of a System

What do you honestly think banks here in the States would do with debtors who just can't swing their loan payments anymore? You really think they’d just wave a magic wand and forgive the rest of the debt? 😁

And how exactly do you think those same banks would pay out everyone's savings?

Now you see why we have to do whatever it takes to prevent a total meltdown. If interest rates spiked or if the US dollar underwent a massive devaluation, we’d be looking at a full-blown collapse.

Cutting interest rates was pretty much the only way out.

Joshua Martinez7 said:What do you honestly think banks here in the States would do with debtors who just can't swing their loan payments anymore? You really think they’d just wave a magic wand and forgive the rest of the debt? 😁

And how exactly do you think those same banks would pay out everyone's savings?

Now you see why we have to do whatever it takes to prevent a total meltdown. If interest rates spiked or if the US dollar underwent a massive devaluation, we’d be looking at a full-blown collapse.

Cutting interest rates was pretty much the only way out.

We’d end up in a spot where savers have to choose between losing money due to bad loans or losing everything if the bank goes under completely.

Elizabeth Harris11 said:The idea that Americans are going broke is just plain wrong—I was actually out there just two weeks ago, and you can tell they’re shaking off that recession funk. Construction is everywhere, shopping malls are absolutely packed, and honestly, you can practically smell the money in the air.
All this noise about the debt ceiling? It's nothing more than a smoke screen to distract us from the real fight, which is all about tax burdens. That's where the actual battle lines are being drawn right now.

👍

I've chatted with quite a few Americans lately, and they've been telling me pretty much the same thing. Honestly, for them, the big debate is really just centered on social services versus taxation—that's the core of it. As for the standard of living? Well, it's worlds apart from what we have here. When people talk about a "crisis in the USA," it's a completely different beast than how we perceive a crisis at home. I mean, a single guy renting an apartment could live a decent life on $500 a week—and if my memory serves, flipping a burger at McDonald's pays about $8.50 an hour, so just do the math on that.

Besides, even during the worst economic downturns in the US, things weren't actually that bad for people who lived within their means. A lot of folks ended up in trouble not because they weren't making enough, but because of reckless spending or taking on loans they realistically couldn't afford to pay back.

Harold Martin10 said:👍

I've chatted with quite a few Americans lately, and they've been telling me pretty much the same thing. Honestly, for them, the big debate is really just centered on social services versus taxation—that's the core of it. As for the standard of living? Well, it's worlds apart from what we have here. When people talk about a "crisis in the USA," it's a completely different beast than how we perceive a crisis at home. I mean, a single guy renting an apartment could live a decent life on $500 a week—and if my memory serves, flipping a burger at McDonald's pays about $8.50 an hour, so just do the math on that.

Besides, even during the worst economic downturns in the US, things weren't actually that bad for people who lived within their means. A lot of folks ended up in trouble not because they weren't making enough, but because of reckless spending or taking on loans they realistically couldn't afford to pay back.

I don't know what kind of "crisis" you guys are actually talking about. It’s hard to claim there isn't a crisis when you can see the letter "K" looming on the horizon. Sure, maybe a single person in the USA could scrape by on $500 a month. But the real question is—what happens to someone once that $500 disappears?
The real issue facing the upcoming crisis isn't just unpaid credit card bills; it's the massive loss of jobs that were essentially manufactured through excessive debt.

Scott Rodriguez19 said:I don't know what kind of "crisis" you guys are actually talking about. It’s hard to claim there isn't a crisis when you can see the letter "K" looming on the horizon. Sure, maybe a single person in the USA could scrape by on $500 a month. But the real question is—what happens to someone once that $500 disappears?
The real issue facing the upcoming crisis isn't just unpaid credit card bills; it's the massive loss of jobs that were essentially manufactured through excessive debt.

People will either end up flipping burgers at McDonald's or taking some other "unpleasant" gig. Or maybe they'll end up sleeping in their cars on the side of the road. Most likely, though? They’ll just lean on their family or relatives—who probably have a little extra cash anyway—while they wait around to find another "decent" job. That’s just how it plays out in the real world.

Elizabeth Harris11 said:The idea that Americans are going broke is just plain wrong—I was actually out there just two weeks ago, and you can tell they’re shaking off that recession funk. Construction is everywhere, shopping malls are absolutely packed, and honestly, you can practically smell the money in the air.
All this noise about the debt ceiling? It's nothing more than a smoke screen to distract us from the real fight, which is all about tax burdens. That's where the actual battle lines are being drawn right now.

Personally, I'm still holding out hope that we get hit by a crisis just like the one in the States... I'd love to see our wages, unemployment rates, and the cost of groceries and cars "drop" down to those American levels.

Who actually owns all that American debt, and how much does the US end up paying in interest alone every year just to service it? Who's getting that money?

And what would happen if the USA just announced they couldn't pay it back anymore?

goldengull3 said:Personally, I'm still holding out hope that we get hit by a crisis just like the one in the States... I'd love to see our wages, unemployment rates, and the cost of groceries and cars "drop" down to those American levels.

Well, if you listen to the unofficial numbers floating around, unemployment in the USA is hovering near 20%—though I suppose the standard of living there is still technically better, since their debt crisis hasn't even really started to bite yet, given that the national debt just keeps climbing. It's pretty much the same story over in Europe and here in the States. And honestly, it isn't some coincidence that the dollar and the euro are both losing significant value against everything else.

Anthony Booth4 said:Who actually owns all that American debt, and how much does the US end up paying in interest alone every year just to service it? Who's getting that money?

And what would happen if the USA just announced they couldn't pay it back anymore?

Well, look at the breakdown. American funds and private citizens hold about $1,000 trillion...
China holds 1,160, Japan has 882, the UK has 272, OPEC nations have 212, Brazil has 186, offshore accounts account for 168, Taiwan has 155, Russia has 152, and even smaller players might hold around 11 billion, bringing the total toward that $4,440 trillion mark.

The US will only declare they can't pay if they literally run out of paper for the printing presses. Theoretically speaking, the US can never stop paying its debts because they borrowed in dollars—and they control the mint, not the creditors. Plus, they're sitting on massive gold reserves.

Thanks to everyone who dropped by this thread... I’m hoping a few of you actually had an "aha!" moment while reading through this.
Monday is going to be a wild ride. It'll be the first real trading day following that downgrade of the US credit rating. I suspect the markets already started reacting to the rumors back on Thursday, but looking at the S&P 500 right now, I see plenty of room for that index to slide even further...
Enjoy the economic Armageddon!😁

wearytrucker22 said:Well, look at the breakdown. American funds and private citizens hold about $1,000 trillion...
China holds 1,160, Japan has 882, the UK has 272, OPEC nations have 212, Brazil has 186, offshore accounts account for 168, Taiwan has 155, Russia has 152, and even smaller players might hold around 11 billion, bringing the total toward that $4,440 trillion mark.

The US will only declare they can't pay if they literally run out of paper for the printing presses. Theoretically speaking, the US can never stop paying its debts because they borrowed in dollars—and they control the mint, not the creditors. Plus, they're sitting on massive gold reserves.

Is that why China is so desperate to find a replacement for the dollar as the world's main currency?

A global currency essentially already exists: http://en.wikipedia.org/wiki/Special_Drawing_Rights

wearytrucker22 said:Well, look at the breakdown. American funds and private citizens hold about $1,000 trillion...
China holds 1,160, Japan has 882, the UK has 272, OPEC nations have 212, Brazil has 186, offshore accounts account for 168, Taiwan has 155, Russia has 152, and even smaller players might hold around 11 billion, bringing the total toward that $4,440 trillion mark.

The US will only declare they can't pay if they literally run out of paper for the printing presses. Theoretically speaking, the US can never stop paying its debts because they borrowed in dollars—and they control the mint, not the creditors. Plus, they're sitting on massive gold reserves.

We’ve got them by the throat, haven't we? 👍

wearytrucker22 said:Well, look at the breakdown. American funds and private citizens hold about $1,000 trillion...
China holds 1,160, Japan has 882, the UK has 272, OPEC nations have 212, Brazil has 186, offshore accounts account for 168, Taiwan has 155, Russia has 152, and even smaller players might hold around 11 billion, bringing the total toward that $4,440 trillion mark.

The US will only declare they can't pay if they literally run out of paper for the printing presses. Theoretically speaking, the US can never stop paying its debts because they borrowed in dollars—and they control the mint, not the creditors. Plus, they're sitting on massive gold reserves.

Sharp thinking... Since their debt is dollar-denominated, repayment is always technically possible...

And if they actually run out of paper, they have a fallback plan ready to go:

The largest denomination of currency ever printed by the Bureau of Engraving and Printing (BEP) was the Series 1934 Gold Certificate featuring The portrait of President Wilson. These notes were printed from December 18, 1934 through January 9, 1935 and were issued by the Treasurer of the United States to Federal Reserve Banks only against an equal amount of Gold bullion Held by The Treasury Department. The notes were used only for official transactions between Federal Reserve Banks and were not circulated among The general public

analogridge312 said:Thanks to everyone who dropped by this thread... I’m hoping a few of you actually had an "aha!" moment while reading through this.
Monday is going to be a wild ride. It'll be the first real trading day following that downgrade of the US credit rating. I suspect the markets already started reacting to the rumors back on Thursday, but looking at the S&P 500 right now, I see plenty of room for that index to slide even further...
Enjoy the economic Armageddon!😁

That first post was spot on. Tomorrow is gonna be a blast—honestly, I'm rooting for a total collapse of the global monetary system if it means a better future for humanity, even if our generation ends up totally screwed in the process.

Timothy Mitchell29 said:Is that why China is so desperate to find a replacement for the dollar as the world's main currency?

They’re definitely trying... but honestly, they don't even have to trade in Euros or Dollars if they don't feel like it.
A lot of people would jump at the chance to use the Yuan, but if they actually let go of the leash, they could face bankruptcy for 40% of their companies overnight, just like they say.
And man, that would be a total economic meltdown on a scale we've never seen.
That's why, even with all the other real risks out there, they still sit way below the USA and the EU on the credit rating scales.

Going from the internet to farming? It’s not a bad backup plan. At least then they wouldn't be starving like dogs and scavenging along the coastlines before they had to move. 😢

nimbleowl10 said:That first post was spot on. Tomorrow is gonna be a blast—honestly, I'm rooting for a total collapse of the global monetary system if it means a better future for humanity, even if our generation ends up totally screwed in the process.

Is getting wiped out really better than what we have now? Care to explain the logic there?

If that kind of lifestyle is what you're actually looking for, why not just unplug from the internet, buy some farmland, raise some pigs, cows, and sheep, and live off the land?

It’s never that simple... everything is tied together in this messy web, and we’re all just sitting here waiting to see who actually comes out on top in this high-stakes chess match between the USA and China...

The whole thing really hinges on the value of the dollar... and honestly, the way Americans manipulate its value isn't some deep conspiracy, it's been common knowledge for ages. I mean, other countries mess with their currencies all the time to shave down debt or juice up exports, but if the dollar loses its status as the world's reserve currency, the US is in huge trouble because they won't be able to just print money and export their inflation to everyone else anymore—not since the US is already sliding into a recession in all but name...

China is currently sitting on a surplus with the USA... so to keep that balance, they have to keep buying up those Treasury bonds, even though most of them are basically worth nothing at this point... They've "bought" into a chunk of American debt just so they can have some leverage and a reason to call out the USA for controlling the world's trade currency. It doesn't suit them to let the USA dictate terms whenever they feel like it...

Even if it looks like China is folding, I highly doubt they’d buy those bonds without backing them up with physical assets like gold or water rights... Their economic philosophy has always been about the long game rather than quick wins, because when a Chinese person makes a deal, they aren't looking at immediate profits—they're looking at what happens ten or twenty years down the road...

brightfalcon66 said:It’s never that simple... everything is tied together in this messy web, and we’re all just sitting here waiting to see who actually comes out on top in this high-stakes chess match between the USA and China...

The whole thing really hinges on the value of the dollar... and honestly, the way Americans manipulate its value isn't some deep conspiracy, it's been common knowledge for ages. I mean, other countries mess with their currencies all the time to shave down debt or juice up exports, but if the dollar loses its status as the world's reserve currency, the US is in huge trouble because they won't be able to just print money and export their inflation to everyone else anymore—not since the US is already sliding into a recession in all but name...

China is currently sitting on a surplus with the USA... so to keep that balance, they have to keep buying up those Treasury bonds, even though most of them are basically worth nothing at this point... They've "bought" into a chunk of American debt just so they can have some leverage and a reason to call out the USA for controlling the world's trade currency. It doesn't suit them to let the USA dictate terms whenever they feel like it...

Even if it looks like China is folding, I highly doubt they’d buy those bonds without backing them up with physical assets like gold or water rights... Their economic philosophy has always been about the long game rather than quick wins, because when a Chinese person makes a deal, they aren't looking at immediate profits—they're looking at what happens ten or twenty years down the road...

The Chinese have already signaled that if their savings become too vulnerable, they will move to annex Taiwan and, in a direct countermove, nationalize private American investments held in China.

brightfalcon66 said:It’s never that simple... everything is tied together in this messy web, and we’re all just sitting here waiting to see who actually comes out on top in this high-stakes chess match between the USA and China...

The whole thing really hinges on the value of the dollar... and honestly, the way Americans manipulate its value isn't some deep conspiracy, it's been common knowledge for ages. I mean, other countries mess with their currencies all the time to shave down debt or juice up exports, but if the dollar loses its status as the world's reserve currency, the US is in huge trouble because they won't be able to just print money and export their inflation to everyone else anymore—not since the US is already sliding into a recession in all but name...

China is currently sitting on a surplus with the USA... so to keep that balance, they have to keep buying up those Treasury bonds, even though most of them are basically worth nothing at this point... They've "bought" into a chunk of American debt just so they can have some leverage and a reason to call out the USA for controlling the world's trade currency. It doesn't suit them to let the USA dictate terms whenever they feel like it...

Even if it looks like China is folding, I highly doubt they’d buy those bonds without backing them up with physical assets like gold or water rights... Their economic philosophy has always been about the long game rather than quick wins, because when a Chinese person makes a deal, they aren't looking at immediate profits—they're looking at what happens ten or twenty years down the road...

Please, let's not fall back on the myth of "precious water" again. Everyone needs it daily, but most of the world has access to it, and there's simply no business case for hauling it all the way across the Pacific.

China buys US Treasuries because they need a place to park the cash from selling us their goods. Without that cycle, China's GDP growth hits a wall. Furthermore, if America stopped buying their products, we'd see factories shuttering across China, which would trigger the kind of internal social unrest they fear most.

Harold Martin10 said:👍

I've chatted with quite a few Americans lately, and they've been telling me pretty much the same thing. Honestly, for them, the big debate is really just centered on social services versus taxation—that's the core of it. As for the standard of living? Well, it's worlds apart from what we have here. When people talk about a "crisis in the USA," it's a completely different beast than how we perceive a crisis at home. I mean, a single guy renting an apartment could live a decent life on $500 a week—and if my memory serves, flipping a burger at McDonald's pays about $8.50 an hour, so just do the math on that.

Besides, even during the worst economic downturns in the US, things weren't actually that bad for people who lived within their means. A lot of folks ended up in trouble not because they weren't making enough, but because of reckless spending or taking on loans they realistically couldn't afford to pay back.

It seems some people are still looking at the USA through rose-colored glasses. Minimum wage is sitting at $5.15 an hour—which is basically what a cashier at Walmart or Kmart makes—and companies, in a desperate bid to cut costs, avoid paying overtime (which is 30% higher) by simply hiring a second crew to work the same minimum wage. So, go ahead, calculate that monthly total... it doesn't even hit $1,000 gross.

A single person living on $500?!?!? Where in America are you finding that? Seriously, take a look at what renting a room or an apartment costs, factor in health insurance, and then come back to me with this idea that someone can live a "normal" life on that amount.