American Banks Dumping Dollars for the Yen

Smuggler

Smuggler

Active Member
I heard a national news report that was very interesting and at the same time, very sobering.

It turns out that most of the banks that received the Billions of tax dollars in bailouts, have not reinvested any of it as intended. Instead, they have stockpiled it in their vaults and just given huge bonuses out to their senior executives. That’s the old news part of this story.

BUT! An equally astounding discovery was uncovered this week regarding another decision that the majority of the bailout banks have reached. What they have been doing for the last 6 months is this. They have been selling off the Billions of American dollars they have stockpiled in their vaults and have been replacing them with the Chinese Yen and to a lesser degree, the Euro.

Get it? They have dumped the dollar and gone to stockpiling the Yen!

You say that you don’t believe the dollar is going to crash? Well then, just wait a little longer and you will see for yourself firsthand. Because Scooter, the banks all believe it.

God help you if you don’t have stuff you will need to survive on, because it’s going to get ugly real soon.

THIS IS NOT MY OPINION! It’s what the banks are doing right now! As reported by the National news, verified and proven to be true.

If you don’t see the writing on the wall, then you just don’t want to. S
 
tea tree

tea tree

Well-Known Member
is that you lucas? i saw that picture on a ask lucas thread. Lol, prob not.

but i have read lately that the best investment is the yen. better than gold.
 
AzNsOuLjAh27

AzNsOuLjAh27

New Member
^ no deffinetly not better than gold (gold in the 90's was 400 an oz, now its 2,500 or more probobly alot more, cuz thats just a conservative guess). but intresting news never the less, thx for the info.
 
hanimmal

hanimmal

Well-Known Member
I love when I have a couple minutes to catch up on the lunacy of the fringe political world.

I just am wondering with the slight loosening of a completely undervalued yen (meaning the price is going to increase in buying power vs our dollar, even if not by much it wont be going down) and a euro whose price is at a severe low due to the Greece fiasco, how is it a bad thing that the banks are investing in these currency markets to get a good return?

Even if someone doesn't understand that having dollars in the hands of people who instead had yuan or euros, it's pretty easy to get that if the dollar decreases in value compared to other countries currency it increases our exports due to them being able to buy more. So I don't see where the drama is here. In either what the did in trading the currencies or in what it actually means.
 
Mr.KushMan

Mr.KushMan

Well-Known Member
Well from what I can gather the reason they are trading to yuan and euro is because of the enormous size of US money supply. And because more money creates less buying power, it only stands to reason that they would jump from currencies when they can predict a down-drift.

But its mathematically proven that all fiat currencies come to an end, and that its impossible to NOT make one party worse off when any exchanges are made(Pareto effect).

"What do you think is going to happen to the arms industry when we realize we are all one? Its gunna fuck up the economy! The economy that fake anyway!!" -- Bill Hicks

Peace
 
N

NoDrama

Well-Known Member
Its called Arbitrage, Carry Trade, or "Free Money". Sell your devaluing dollars for Japanese Yen, wait a while, reconvert back into dollars and pay off debt. They have been doing things like this for the last 39 years.

The biggest problem is that prices on all items will rise, but your wages will lag. In other words $100 bread but you still make $7.50 an hour. Of course this will happen slowly over a few years so you don't notice it right away. well you don't notice at all until you are destitute and thrown out of your home. Equities will lose all value ( Equities are stocks and bonds) because the value of the dollar keeps tanking, people will stop buying US treasuries and then things will get really bad as the buyer of last resort is the Fed, and when only they are buying Treasuries is when you will really see inflation start.

The price of gold will keep moving up. Hang on its going to be a bumpy ride.
 
R

redivider

Well-Known Member
you are wrong.

american banks are not dumping dollars for foreign currency, or like you say, emptying their vaults.

investing in foreign currency is part of regular operations of banks.

most banks stay away from heavy currency exchanging because accurately predicting how currencies will behave involves teams of mathematicians, and they usually don't get it exactly right.
 
hanimmal

hanimmal

Well-Known Member
But its mathematically proven that all fiat currencies come to an end, and that its impossible to NOT make one party worse off when any exchanges are made(Pareto effect).
Click to expand...
So where is this mathematical proof?

I have no problem believing currencies will end, but that just means it gets replaced by something else.

And how exactly do you get that both parties can't benefit from exchange? Or are you just thinking short term and only two variables taking risk off the table.


And NoD I have developed some respect for you (and still have not forgotten that I need to get back to our last discussion, just been insanely busy), and it could just be that it's Sunday morning but what you're saying is a lot too tv preacher talking up the end of days man. There is no evidence that what your saying is even possible. Because if noting else someone could cook homemade bread and sell it for wages far more than 7.50 an hour if it is selling for a hundred right?

Money is very cyclical. As some countries hit a ceiling for a bit and production slumps other countries will be entering a boom and it is just smart to try to keep a portion in the countries that are doing the best. Kind of like sports. One team may be a dynasty but in a rebuilding year there will be other teams that will rise to the top until the dynasty gets firing on all cylinders again. And if your betting on the games you want to go with the hot hand.
 
jeff f

jeff f

New Member
hanimmal said:
I love when I have a couple minutes to catch up on the lunacy of the fringe political world.

I just am wondering with the slight loosening of a completely undervalued yen (meaning the price is going to increase in buying power vs our dollar, even if not by much it wont be going down) and a euro whose price is at a severe low due to the Greece fiasco, how is it a bad thing that the banks are investing in these currency markets to get a good return?

Even if someone doesn't understand that having dollars in the hands of people who instead had yuan or euros, it's pretty easy to get that if the dollar decreases in value compared to other countries currency it increases our exports due to them being able to buy more. So I don't see where the drama is here. In either what the did in trading the currencies or in what it actually means.
Click to expand...
han, his citation to the ny post is a year old. dont know what the current situation is but i agree with you on this one.
 
N

NoDrama

Well-Known Member
hanimmal said:
And NoD I have developed some respect for you (and still have not forgotten that I need to get back to our last discussion, just been insanely busy), and it could just be that it's Sunday morning but what you're saying is a lot too tv preacher talking up the end of days man. There is no evidence that what your saying is even possible. Because if noting else someone could cook homemade bread and sell it for wages far more than 7.50 an hour if it is selling for a hundred right?
Click to expand...
Its a Hypothetical situation, If bread really cost $100 a loaf it isn't because of the labor costs, its because of the material cost. So your example that someone could just make the bread to provide a better income for onesself still wouldn't work, not when the ingredients in the bread cost $93. But thats not going to happen, by the time bread costs $100 a loaf there will be no bread to buy anyway. Inflation affects prices of ITEMS first, wages lag by up to several years before they catch up. The point Im trying to make is that because the US dollar exchange rate keeps going down it makes the dollar have less and less purchasing power, and the effect of less purchasing power is Prices on items will rise. Look back at the price of a loaf of bread in 1780, converting the sterling silver in use at the time the price for a loaf of bread was about 18 cents. http://www.continentalline.org/articles/article.php?date=9602&article=960203 Todays a loaf of bread costs about $1.40 http://www.bls.gov/ro3/apmw.htm. The price of Bread did not increase 780% because wheat is so much harder to get now, nor did it increase because it took more man hours of labor to grow the wheat nor was it because of scarcity of a labor pool or any of those things. Wheat grows more plentiful now than in 1777, a single farmer can produce about 1000 times more than a person in 1777 could ( Just a guess im not a farmer). Labor costs have dropped precipitously due to the use of machinery, efficiency has shot through the roof. So now you have to ask your self, why does bread cost almost 8 times more than it did 230 years ago if the laws of supply and demand have made the primary ingredient of bread much much much more easily gotten? Do you think it has anything to do with the price of wheat? Why does wheat cost more? Is it scarcer now than 230 years ago? Why has the price of wheat exploded?

Why does a single egg in Zimbabwe cost 1 trillion Dollars when 9 years ago it only cost 10 cents? Did eggs all of a sudden become as rare as hens teeth in that country? Perhaps Zimbabwean chickens lay solid diamond eggs filled with platinum? Why the price increase?

I know many people will say that the culprit is INFLATION, but inflation is only the effect of something else. Im sure you know what that something else is Han.
 
hanimmal

hanimmal

Well-Known Member
I find it very difficult to think of any possible (not including some disaster or disease that exterminated most of us) that would make it so there is no bread. It is not that hard to gather the materials needed, which is my guess of why it has always been so important to human development.

But that aside 18 cents to a colonial person would be about how much of the money they made on average, vs today where that $1.40 is about .000047 of the income of someone making 30k a year. That site doesn't quantify how much it actually was to the people of that time so we don't know if it is an increase or decrease in actual cost.

But with the fact that bread essentially comes to us bug and decease free, wrapped in a (not that I wouldn't want it biodegradable) plastic bag to stop bugs getting into it, unimaginable varieties of every type of bread located inside a store that has most everything we could want to use with it, I do think that we win the food battle every time today not only in cheapness it costs us but in quantity and quality.

Zimbabwee was retarted and became on of a very small handful of countries that went nuts on the printing press causing hyperinflation, anyone that says America is doing that is just talking out of their asses and if you look into their numbers you would see it just doesn't add up. Luckily most of them just expect people to either believe it all unquestioned, or dismiss them entirely as quacks so they don't bother using numbers much. This way when you find the data they are using it is pretty easy to find the flaws.

Sidenote: wages are generally sticky downwards, and move much more quickly upwards as businesses hire people the old employees tend to expect at least the pay of new ones.
 
hanimmal

hanimmal

Well-Known Member
Thanks Mr.Kush here is number 4 on that list very quick read:

Anyone who’s read my posts can tell I have pretty strong libertarian leanings. So in this post, I’m going to try to remain fair and take on a common libertarian statistic. In the documentary film, Fiat Empire, libertarian congressman Ron Paul restates an oft-cited fact by libertarians, “If you study monetary history, throughout thousands of years, paper money has been tried many, many times and it never succeeds. It always ends badly.” (1)

A fiat currency is simply a currency that isn’t backed by any underlying asset. Fiat currencies derive their value solely from the ratio of money to goods in the economy. If that ratio gets out of whack (say the government prints too much money), the currency will become worth less than the paper it’s printed on. Ron Paul and many libertarians, especially those who ascribe to Austrian economics, believe in the gold standard (where each unit of currency is backed by gold, a proposal I have a lot of sympathy for). And since every fiat currency that has ever existed has failed, all the more reason we should go back to the gold standard. Now, the statement that every fiat currency has failed is completely true. It’s also completely meaningless.

First we have to boil down what these libertarians are actually talking about here. A failed fiat currency is one that hyper-inflates. There are certainly numerous examples of this throughout history. The most famous example is Weimar Germany in between the two World Wars. In 1914, 4.2 marks were worth 1 dollar. In 1923, 4.2 trillion marks equaled one dollar! In case you were wondering, this is bad for an economy. Other examples include the Romans, who experienced severe runaway inflation near the end of their empire, France in the late 18th century, Hungary after World War II, many Asian countries during the Asian Financial Crisis of 1997 and Zimbabwe today. (2)

The moral of the story is all fiat currencies hyper-inflate, while those backed by gold don’t (they can however suffer from high inflation in the short term). (3)* As I said, these libertarians are correct. As the Daily Reckoning puts it: “EVERY fiat currency, since the Romans first began the practice in the first century, has ended in devaluation and eventual collapse.” (4) There are two caveats to their argument, though: 1) if the fiat currency was ended for another reason, say the country was conquered and the currency replaced, then those examples are obviously ignored and 2) if the currency is still around today*, it also doesn’t count, because the currency will presumably fail in the future. The problem with this assessment is simple: What else can happen to a currency?

The answer to that question is nothing. The only possible exception would be the hypothetical hyper-deflation. This isn’t even worth talking about though, since it has never happened in the history of the world and would have to get so out of hand that one unit of currency was worth everything on the planet (otherwise you could just print more or cut the currency up into smaller pieces, like when a stock splits). Other than such an absurd scenario, there are only three options for a fiat currency: hyperinflation, ended by another means or it still exists. So while this statistic/fact is completely true, it’s also akin to saying the sky is blue (and about as useful for determining monetary policy).

There are plenty of reasons to support the gold standard. Gold standards reduce inflation and prevent governments from taxing the population in a hidden way. This thereby makes it more difficult for governments to wage wars or reward their friends in the private sector. The “fact” that every fiat currency has failed (excluding the two obvious caveats) does nothing to help the argument, though. It sounds like it conveys something, but in actuality, it conveys absolutely nothing.
Click to expand...
 
N

NoDrama

Well-Known Member
hanimmal said:
I find it very difficult to think of any possible (not including some disaster or disease that exterminated most of us) that would make it so there is no bread. It is not that hard to gather the materials needed, which is my guess of why it has always been so important to human development.

But that aside 18 cents to a colonial person would be about how much of the money they made on average, vs today where that $1.40 is about .000047 of the income of someone making 30k a year. That site doesn't quantify how much it actually was to the people of that time so we don't know if it is an increase or decrease in actual cost.

But with the fact that bread essentially comes to us bug and decease free, wrapped in a (not that I wouldn't want it biodegradable) plastic bag to stop bugs getting into it, unimaginable varieties of every type of bread located inside a store that has most everything we could want to use with it, I do think that we win the food battle every time today not only in cheapness it costs us but in quantity and quality.

Zimbabwee was retarted and became on of a very small handful of countries that went nuts on the printing press causing hyperinflation, anyone that says America is doing that is just talking out of their asses and if you look into their numbers you would see it just doesn't add up. Luckily most of them just expect people to either believe it all unquestioned, or dismiss them entirely as quacks so they don't bother using numbers much. This way when you find the data they are using it is pretty easy to find the flaws.

Sidenote: wages are generally sticky downwards, and move much more quickly upwards as businesses hire people the old employees tend to expect at least the pay of new ones.
Click to expand...
So what your saying in the first paragraph is that the price of bread will always be a certain percentage of the average wage? Or are you saying that the reason the price of bread has increased is because it is wrapped in plastic and disease free? Or is the price increase because of all the different varieties? Im not understanding what the point is that you are trying to make. Im quite certain that bread made in 1780 also had no diseases, otherwise one would not have bought it. Im also quite certain that they knew how to make more than one type of bread.

Could you go out right now and without ever purchasing any ingredients make yourself a loaf of bread Han? Where do you get the wheat? How you make it into flour? Where did you source your sugar and yeast from? Do you grow all of those things in your garden? Making bread isn't exactly easy if you cannot purchase the required ingredients.
MY point was that the prices of items will increase due to a devaluation of the currency.

Oh and It would be simplistic to remove bread from every store almost overnight and you would never have to visit any stores at all. In fact you could basically have any or even ALL food staples gone in every store in the nation literally overnight. Im sure if you think about it Han you can come up with a scenario. Hint: Government


Where I work we all had to take a 20% pay cut, but food prices increased an average of 16% over the same year, tell me more about this sticky downwards theory of yours please so I can tell my boss he is doing it all wrong.
 
hanimmal

hanimmal

Well-Known Member
Damn just deleted my post on accident, right at the end too.

But basically i'm sorry about your pay cut that blows.

But their is a very good reason the word 'sticky' is used and they don't say wages are fixed downward.

So what your saying in the first paragraph is that the price of bread will always be a certain percentage of the average wage? Or are you saying that the reason the price of bread has increased is because it is wrapped in plastic and disease free? Or is the price increase because of all the different varieties? Im not understanding what the point is that you are trying to make. Im quite certain that bread made in 1780 also had no diseases, otherwise one would not have bought it. Im also quite certain that they knew how to make more than one type of bread.
Click to expand...
None of the above. I'm saying that from the info they provided their is no way to be able to tell if the price of bread has increased or decreased or stayed the same, because we don't have how much the people made at the time in the way they are measuring.

If like when we discussed the price of apples we examine the cost of an apple compared to how much household income was then we saw that the prices of apples was essentially the same porportunaly in I believe was 1907 and last year.

It's not hard to do actual comparisons if we have the pertinent information, it's just we don't with this example, so thinking it is somehow bad that apples were 18 cents then and 1.40 now is meaningless because we don't know what they made then compared to the 30k a year low end today.
 
You must log in or register to reply here.
Top