debt ceiling talks

[meta-agnostic]

So a deal was struck in the very last hours as widely predicted but a credit rating downgrade of U.S. debt happened anyway, and the markets are now in turmoil. For anyone who was predicting chaos by this fall, it appears to be right on track.

I can't find the link but somewhere in all this, Ron Paul (controlled opposition, I know) mentioned that the U.S. has technically defaulted 3 times already. First in 1934 when FDR or whoever was pulling his strings raised the price of gold/lowered the value of the dollar from $20.67/oz or thereabouts to $35/oz. Then again in 1968 when the government stopped redeeming paper dollars for silver. Then finally again when Nixon closed the gold window completely for foreign governments, as mentioned in the article Deedlet linked to above. If the next default coincides with the USD losing its status as world reserve currency, it looks like it could easily happen before the end of the year.

I know this all seems like boring political/economic theater but I think a lot of the people involved believe it is real. For the average person who senses economics is a crock but still believes the high priests are in control, when things finally stop functioning the way they have for entire lifetimes it is likely to be a big tipping point. None of this is news to anyone here but it's what's on my mind and I know many of you will have some valuable perspectives on it as things develop day to day.

 

[meta-agnostic]

Oh, and I know it has not been widely brought up in this thread but it is equally if not more important, and many of you are there so you may have better insights:

The whole European situation.

 

[Palinurus]

There's also a much wider issue at stake here: a thorough wrangling behind the scenes about the ultimate exchange values of leading currencies within a new type of Bretton Woods arrangement (_http://en.wikipedia.org/wiki/Bretton_Woods_system), commonly known as a new world currency.

See for instance currently: http://www.sott.net/articles/show/233082-China-America-Needs-To-Accept-The-Painful-Fact-That-The-Good-Old-Days-Are-Over-

The statement also called for a new global currency: "International supervision over the issue of U.S. dollars should be introduced and a new, stable and secured global reserve currency may also be an option to avert a catastrophe caused by any single country," Xinhua said.

Plans within plans, etc. (Dune) You know the drill...

As for the 'crisis' around the Euro: same old, same old. Except for the Europeans themselves, nobody else would be very fond of a strong Euro anyway for the same reasons. There are serious conflicts of interest at all levels not easily reconcilable - which means jungle fights all around. I sure miss 'Grand Theft Economics' on SotT and all the lots of background info that heading carried yesteryear to sort this all out. These topics seem to have been marginalized for some reason I'm not aware of.