Creditor Nations Are Always Stronger Than Debtor Nations

ΩΩToday I noticed a Washington Post/China news article explaining how China, not the US, is in trouble because China is a creditor nation and we are rapidly destroying our own currency rather than using old fashioned tariffs and barriers, to balance trade.  The author thinks, we will get richer via killing ourselves through bankruptcy.  This insane notion deserves to be ripped apart yet again, point by point.  There is NO MONEY FIX to our problem, it is a trade problem, a cultural mental collapse problem, not easily solved.  We have to change many things but the foremost thing is to control trade via tariffs.




ΩΩRecently, I posted a story about how virtually all of the finalists in the US math competition for Junior High children were Asian.  In nearly every intellectual or fine arts competition requiring great talent, skill or training, Asia is now #1.  Interestingly, from a historic point of view, from 1900-1980, the Jewish ethnic population dominated these same competitions far beyond their proportion to the general population. But ever since they conquered the Palestinians and shoved them relentlessly into ghettos, across the board, the Jewish population is fading from the scene whereas the Asian children are surging forwards:  Asia shows dominance at Geneva piano competition | Reuters


  • Japan’s Mami Hagiwara took the jury’s first prize, worth 20,000 Swiss francs, with her performance of Maurice Ravel’s Concerto for Piano in G major. The jury awarded South Korea’s Hyo Joo Lee a second prize worth 12,000 francs for her playing of Sergei Rachmaninoff’s Second Piano Concerto in C minor.


  • But Lee, 25, delighted the public more with her sensitive but masterly rendition of one of the great works of late Romanticism, and she took the audience prize voted on by the public in the hall as well as winning a contract to record a portrait CD with orchestra sponsored by Swiss watchmaker Breguet, part of the Swatch Group….In this year’s piano section, by far the biggest number of the 41 entrants came from East Asian countries, with Russia forming the next biggest group.



ΩΩOne interesting detail here is, the investment in education of all sorts in Asia is very high as it was in the Jewish community for many years.  There is a powerful cultural bias at work here.  Ethnic groups that invest heavily in education coupled with promoting their ethnic children to various positions leads to dominating various high-level cultural institutions, educational systems and creative activities in general.  But this requires a dedicated population that believes in liberal values such as humanism, equality and civilized values.  The one certain way to kill this is to opt for the brute force, steal everything in sight ideology.


ΩΩJapanese parents are, like many Jewish parents, giving up on large families and instead, are focusing on putting all their money onto one or at most, two children.  Education burdens on rise among Japanese families › Japan Today: Japan News and Discussion


  • The average education cost of some 5,400 families with school-age and older children that gave valid responses to a survey in July was 1,982,000 yen (EMS: $2,300), up 52,000 yen from the previous year, boosting their ratio to household income, which is declining amid a sluggish economy, from 33.7%, Japan Finance Corp. said. Among families with income from 2 million to 4 million yen ($23-46 thousand), the ratio is as high as 56.5%, it added.


ΩΩThe average spent on higher education comes to about $119,000.  This is a considerable investment for the average middle class family which has seen their income fall as fees and costs inflate.  This is true in the US which is relentlessly pursing an identical ZIRP economy.  There is supposedly no inflation but as a mother on a fixed income, I assure everyone, we are being hammered by inflation since we have a son finishing school, high energy and food costs compared to just 5 years ago and no cost of living raises.


ΩΩEmbarrassed by this and scared of voters, the government gave us a $250 booster shot a year ago all of which was consumed by much higher energy costs.  Japan still shines in global cultural competitions but is beginning a swan dive to nothingness as the younger generation vanishes entirely and the basic costs of child raising continues to shoot upwards against declining incomes.  On the other hand, millions of Chinese are investing in their children’s piano, violin, dance, art and intellectual games training just as my parents invested in our own upbringing in the arts and I spent a lot of money, back when I was earning a lot of money, on lessons of all sorts for  my own children.


ΩΩBut this is hard to do on a declining income!  I know because this bothered me ever since my husbands (both of them at virtually the same time!) became disabled and I was stuck caring for them.  The is the natural course of restrictions of any sort: as the income falls and inflation bites, the money left aside for special lessons and projects of our kids plummets pretty fast.  You can’t catch the rising fees/falling income knife.


ΩΩIn the US we have a worse problem: like Israel, the US relies mainly on brute force, not our wits, to control foreigners.  The British Empire used their wits to control vast populations for many years but when this began to fail after WWI, the empire imploded very quickly.  For some reason, the British people didn’t choose to be a bully boy (think: football in the US) sort of culture so this decline didn’t cause a cultural collapse at the same time although it is slowly collapsing which is why no Brits show up in any of the finalists of these international competitions.


ΩΩOn the other hand, the US enthusiastically embraces the ‘bully boy’ culture and now we have our entire military looking like a bunch of skinhead bouncers working in cheap Mafia bars.  Instead of shining in cultural competitions, we make fun of high culture, chess players or other ‘effete’ arts and skills while thumping our chests and playing shoot-em-up video games using real missiles from mechanical assassination robot machines to rip apart angry peasants on the opposite side of the planet.


ΩΩThis leads me to why we are going insane and why we encourage ourselves to do destructive and idiotic things.  Here is a Washington Post article written by an Asian that explains to us, debts make us strong and creditor nations weak and making money out of money games is more important than worrying about our cultural and industrial decline:  Debtor Has Edge Over Creditor | China Watch


  • Sino-US relations have long been a kind of mutually reliant relationship built on an asymmetrical basis. An analysis of both countries’ foreign financial assets, liabilities structure and their investment-profit ratio will show that the US, despite being the world’s largest debtor, still enjoys a positive investment to return ratio, a ratio that is far higher than China’s net assets yield ratio as the world’s biggest creditor nation.



ΩΩI am not the smartest person on earth. Many people think I am stupid or annoying.  But one thing I can still do is analyze things based on a rational assessment of ‘What is good and what is bad.’  This is a simple yin/yang sort of analysis.  That is, think carefully.  Is it good to be deep in debt?  Or good to have a large capital base of savings and investments in good industries?  Bingo!


ΩΩThe answer is painfully obvious: being in debt is terrible.  Throughout history, people recognized this dire fact.  It is one of those things that we should be able to understand since earliest childhood.  ‘You owe me!’ happens to be a very old threat even parents use this against their children.  Spoiled children turn this on its head, ‘I better give it to me or I will throw a temper tantrum,’ is a classic child’s game.  This works only against indulgent parents who are anxious to placate the little monsters.


ΩΩIsrael is our own spoiled brat.  Right now, Clinton, whose daughter just married into the more conservative branch of the Jewish tribal culture, has been begging Israel to stop breaking international laws and treaties and stop building illegal housing on Palestinian lands.  To do this, she has been desperately bribing them and the brats ask for more and more and more.  The more she gives in, the more the brats demand. At no point does she pull US taxpayer funds flowing like the Nile into Jewish coffers.


ΩΩInstead, she sighs and hands over more goodies.  Israel is very deep in debt to the US but controls our government nearly totally so we, the creditors, are beggars at Jerusalem’s gates while the Jews in Israel spit on us as we beg them to loot us even more.  Eventually, and predictably, this will suddenly end when the bully boy mentality of Americans surges to the fore in a rage and down goes the entire Jewish population of not only Israel but the US.  A complete catastrophe and one I wish would never happen but seems inevitable at this point.


ΩΩThis bizarre relationship has rotted our economic pundit class to the core!  That is, we now think, thanks to Israel’s brat relationship with the US, everyone is like this.  That is, if someone gives us goodies or money or power, they are doing this because we are powerful and not because they are either poisoning us, taking over our systems, running us deliberately into as much deep debt as possible or raiding our industrial base via these funny money games that give us the illusion of being richer and richer when in fact, we are selling off our industrial might, destroying our sovereignty and killing our own jobs!


  • From the perspective of international investment efficiency, China is a global creditor with a negative wealth effect. Statistics show that China suffered a negative international investment-return rate for most of the years from 1990 to 2008, with an accumulated deficit of $60.553 billion – a huge loss of the country’s national wealth.



ΩΩHAHAHA….this guy writing the article is such a tool!  HAHAHA…OK: when we forced Germany and Japan via the Bretton Woods II and Plaza Accord deals to double and then double again the value of their own currencies vis a vis the dollar, the did what?


ΩΩIt caused the value of their dollar holdings against their own currencies to fall by 50% twice over!  This did NOT kill their own industries since both ran and still run highly resistant economic systems against US exports to their own nations while continuously running huge export business advantages with the US.  This, in turn, destroyed our own industrial base which has nearly vanished.  See some factories here?  Well, many of them are now owned by foreigners!  We do not own them.  And they exist for only one reason: to keep our trade doors open even as we lose power over these same factories which are not owned by Americans at all.


ΩΩChina has played the German/Japanese game masterfully against not only the US but also against Germany and Japan!  This is why China demands that if any country wishes to sell anything to China, they must manufacture it inside of China!  Since, unlike Germany and Japan which have only 200 million people and the US has only 300 million potential customers for German and Japanese goods, China has 1.4 billion people!  This dwarfs all three other top economic nations.  And is an important point: if you want to sell something, you go to China but you have to play by Chinese rules and rule #1 is, you better do your business inside China and not try to colonize China by turning it into a dumping ground for your export goods!  DUH.


  • A look at China’s International Investment Position also shows that its reserve assets accounted for as high as 66.73 percent of the country’s foreign assets from 2004 to 2009, 63.56 percentage points higher than that of the US. In its foreign debt, the value of foreign direct investment (FDI) accounted for as high as 59.96 percent during the same period, or 55.21 percentage points higher than that of the US. Such an imbalanced assets and liabilities structure has resulted in a low return ratio in its international investment. It is also an indication of China’s inadequate ability to control its foreign economic exchange.



ΩΩHAHAHA…and this is what happens when economists listen only to each other!  The entire reason China has huge FOREX holdings and why all our trade competitors are doing this is because China is aping Japan who was the first country to figure out how to parley FOREX holdings of US dollars into trade advantages.  The Japanese game has now backfired due to China buying and hoarding yen.  The US hoards nothing.  Our own FOREX holdings are in…DOLLARS!  Which is pure insanity.  It is also very small since we don’t have to hoard dollars in order to flood the US with US goods.  We don’t make much US goods.


ΩΩNo, it is a token amount because a country is supposed to have a FOREX holding. If we look at the real holdings in foreign currencies, it is a pathetic $25 billion which is a midget on the world financial stage where the world’s most dynamic EXPORT powers, Japan, Germany and China all have around $3 trillion US dollars.  This is the game, my friends!  Looking at this as a loss held by the three giant competitors who are ripping our own industrial base to shreds is pure stupidity.  It is obviously NOT a deficit or debit or loss of any sort: it is the golden key to prying open US domestic markets and then systematically destroying it!  DUH.


  • Ironically, being the largest debtor nation has not restrained the mammoth that is the US. Instead, its huge debt has been used as an effective apparatus to maintain and extend Washington’s decades-old global financial hegemony.



ΩΩHere is another classic case of a brat thinking that mommy doesn’t mean it when she says, ‘You will be sorry!’  The bin Laden strategy for destroying the ‘crusaders’ is to lure them into Afghanistan, Yemen and Somalia, for example, where he expects our imperial bully boy strutting to drive us into fighting crazed maniacs who love dying for Allah in colonialist wars!  Are we more respected?  More loved?  Does anyone really cooperate with us outside of doing what we want only when we hand out huge trade and financial  bribes?


ΩΩAll of our wonderful money is being used not to expand markets for US goods but rather, to bribe everyone to joining us in our crusades against Muslims such as the Iranians. The US people have zero reason to be even slightly irritated with the Iranians.  The Saudis and Israelis and other despotic powers fear the Shi’ites a great deal since many Shia live in many countries and itch to tear this apart so they can join the Iranians.  But what does that have to do with us?  Whoever runs Iran and its future empire (which is inevitable at this point) doesn’t matter to us, they will sell us oil if we are not bankrupt.


ΩΩWhat does matter a great deal to us is to not go bankrupt.  Right now, a chorus of advisors and economists are foolishly telling us, we don’t have to worry about going bankrupt, we are powerful bully boys who can beat up everyone.  Of course, this means ignoring history.  The history of bully boy empires with a bloated military and bankrupt is dire: THEY ALL DIE.  No empire has ever survived being a bankrupt bully boy empire. Never, never, never.  So why give us the illusion that this time, history will be even slightly different?


  • Experiences indicate that the US has heavily depended on the endless inflow of international capital to its territory for its debt financing to operate the world’s largest economy. About one-third of US foreign economic deficit has been offset through its well-developed financial institutions, statistics show. From 1993 to 2005, the US sustained an accumulated $4.4 trillion deficit in its current account, compared with the $2.4 trillion increase in its foreign net assets liabilities of the same period. The other $2 trillion deficit was offset by the robust return of the dollar capital to the US.
  • On the other hand, the US has also profited much from its large amounts of long-term foreign investment. Compared with the average annual 3.5 percent of return ratio that foreign countries holding 10-year US debts can get, the US has gained a much higher return ratio from its overseas investment. By making full use of the dollar’s status as the leading international currency and its overwhelming advantages in global financial divisions, Washington has proven to be the largest beneficiary in the accelerated distribution of global wealth.


ΩΩYikes!  Here is a classic example of really stupid analysis!  The author believes that if our investment bankers are making huge profits by investing US dollars in other countries, this makes our NATION richer.  It most certainly does not.  First off, we barely can tax these investment bankers since they use tax havens and on top of this, much of their profits in ‘investing’ overseas is really the money they are using to build former US factories overseas where other people get jobs, not US citizens. So this overseas investments are beggaring our tax base, our employment base and our industrial base!  DUH.


ΩΩSo why would accelerating this horror make the US richer or stronger?  It does make the leeches destroying our nation, the Goldman Sachs and JP Morgans, richer.  But it makes our NATION weaker and poorer.  Proof of this is very simple to find: our national debt has shot up to $14 trillion while our trade deficit has grown over time to well over $5 trillion and climbing.  This double deficit is far worse than other deficits held by any other country.  We have red ink all over us and this does not make us stronger, it will kill us.


ΩΩI have some rich neighbors. Periodically, they get in trouble and lose everything.  They go from mansions and private jets to broke.  Never, ever did they do better, bankrupt, than before.  Not even slightly.  Suggesting the US, living in a mansion and flying private jets, will continue to do so after we go bankrupt is silly in the extreme.


ΩΩAnd if using a bunch of banking pirates to make a nation rich is a wonderful thing, all we have to do is look at poor Irland going bankrupt after bailing out the bastards:  Irish Talks Intensify as Banks Lose Deposits, Cowen Campaigns –  There is a bank run going on as savers depart the system and send their money out of the country.  The WP China story above is all about how it is wonderful that all our money is flowing out of the country chasing after higher rates of return while our trade partners hold US debt and dollars and are losing value as the US degrades the currency, oh, what fun!  Only….we see that this is stupid.  This is actually a symptom of our country dying, not strength!


ΩΩThat is, all countries debasing currencies will see investment flow outwards and the very rich get much, much richer (like with the Weimar Republic top investors who did this to Germany and thus, threw gasoline on the Nazi fires which blamed Jews for this).  This outflow of funds is a danger signal.  It shows us that the very rich are now denuding our own economy to get richer overseas and they have no intention of being taxed or restricted in this protection of their own wealth.  Others in this country are engaged in a vain attempt of protecting wealth via buying and hoarding/hiding gold.  But when the bankruptcy comes, this gold will be confiscated (history is very clear about this matter!).


ΩΩMeanwhile, a desperate Obama trots around the planet, trying to sell off the last of our wealth and to move more dollars overseas while the Fed maniacally prints money out of nothingness:  2010/11/20 12:27 – US Trade Official: Expect To Start Talks On Text Of Pacific Trade Deal


  • “We’re looking to begin negotiating text in the next round in December,” Weisel said during a public hearing on Malaysia’s entry in the talks. She encouraged business and other groups speaking at hearing to move quickly to provide input due to the fast pace of negotiations.
  • Japan has also announced plans to start consultations on joining the talks, though it doesn’t plan to make a decision until June.
  • The trade zone would bring together four countries that already have free-trade deals with the U.S.--Singapore, Chile, Australia and Peru–along with Malaysia, New Zealand, Brunei and Vietnam.


ΩΩStep by relentless step, China is reeling in the rest of Asia.  The US panicked recently and so decided to make our own trade deficit even worse with all our other trade partners!  Whoopee.  This really impresses the Chinese dragon…NOT.  Worse, Japan won’t join in on this for two reasons: Japan already has a huge trade advantage with the US while nearly totally locking out US products in Japan.  And the US hopes to at least export food to Japan and this is highly unpopular with Japanese farmers so it is a dead deal.


ΩΩMeanwhile, seeing that the US got away with debasing the currency quite openly, Japan is doing this openly because it is the basis for Japan’s trade advantage with the US:  BOJ eyes boosting capital to purchase riskier assets | The Japan Times Online
  • The BOJ normally sets aside 5 percent of its profits as reserve funds every fiscal year, but is now planning to increase the ratio to 15 percent in the current fiscal year through March 31, the sources said. The central bank is expected to ask the government for a special measure to that end.
  • The BOJ has established a ¥5 trillion program under which it will purchase assets ranging from government and corporate bonds to riskier exchange-traded investment funds and real estate investment trusts. It aims to spend some ¥500 billion on such riskier assets in a one-year period through December 2011.
  • The central bank has decided to bloat its balance sheet with the program to support companies struggling to accumulate necessary funds for their operations. It is trying to narrow the gaps between interest rates for public- and private-sector debts. However, this means the BOJ will accept a greater level of risk, which could result in the use of taxpayer money to cover huge losses.


ΩΩJapan is going bankrupt due to crushing worker’s wages for 20 years.  The trade surplus has been huge during much of this time but it has also been useless since it didn’t travel down the food chain to the workers who actually produce things.  Starved of funds and forced to devote the majority of their income to educating their children rather than heavily taxing the rich export families who rule Japan so ruthlessly, the entire mess is now going under.  And look at this CIA study:  CIA – The World Factbook — Country Comparison :: Public debt
ΩΩJapan is right behind Zimbabwe?  HAHAHA….scary, isn’t it.  It proves several things: you can’t fix government debt problems via exporting goods.  And ZIRP banking systems drain countries of wealth, not make them richer.  The main reason money is fleeing the US system is simple: it is now a Japanese-style ZIRP system so returns will be low for the foreseeable future and if the debased currency causes inflation, this will simply suddenly increase the number of US dollars disgorged from foreign lands which will cause hyperinflation as everyone seeks to buy parts of the US with dying dollars, hoping to dump these as soon as possible.


ΩΩThe US is  not the worst off in the GDP to debt ratio but unlike Germany or Japan, we owe much of this loot to foreign traders, not to ourselves.  Whereas, both Germany and Japan sopped up much of their own worker’s savings inside their own debt systems.  On the other hand, saving anything is increasingly impossible when wages are falling and the hidden inflation in food, fuel and education continues to hammer working families.
And here are the nations with the least debt:
ΩΩWe are all being told via our government and our media, Venezuela is collapsing.  It isn’t.  And most of these nations who have little to no debt to GDP are oil or gas export powers.  Note that Russia is a creditor, not a debtor nation.  So is Chile.  Indeed, the trio of evil, Venezuela, Iran and China are all near at the bottom of debt to GDP ratios which means they are three creditor powers who don’t have much military power vis a vis the dying US/NATO/Japan power but then, all of the US/NATO/Japan entities are….GOING BANKRUPT!!!!  Oopsies!  As my cartoon at the top shows, we will not be able to hang onto our empire while skipping out on Chinese obligations.


ΩΩHere is some more interesting news.  Japan is in an all fired-panic about using their trillion plus US dollars to make Asian deals:  Japan firms turning to Asia to raise funds, buy companies › Japan Today: Japan News and Discussion


  • Some Japanese startup firms are now going public in South Korea and Taiwan because simpler screening procedures at bourses for emerging companies in those countries help them get their stocks listed expeditiously.
  • They are seeking funds from outside Japan also because domestic investors are showing reluctance to bet their money on fledgling businesses whereas time is of the essence for young firms in need of raising capital….In Japan, Jasdaq reinvented itself on Oct 12 as one of the largest exchanges in Asia for emerging enterprises through the merger of the Hercules bourse and former Jasdaq market.
  • But Asian stock exchanges for up-and-coming firms such as Kosdaq and Singapore’s Catalist may pose tough competition to Jasdaq. They have been targeting Japanese firms, providing them with brochures written in Japanese and holding briefings in Japan about how to go public on their markets.
  • Meanwhile, the stagnant stock market in Japan and the yen’s appreciation, which boosts the currency’s purchasing power abroad, have led Japanese firms to make investments in other Asian countries….Chinese investment fund Citic Capital Partners, for example, took a controlling stake in Higashiyama Film Co in June through a takeover bid. The Nagoya-based firm is using the newly acquired funds to boost sales in China of its high-end films including those for use in cell phones.


ΩΩThe part I highlighted from this Japanese news story is the important item here: China is now busy buying up Japanese corporations.  Japan is scared to death and unlike the US is very aware of what this means in real terms.  Japan is a ‘creditor’ nation in that they have a huge trade surplus with the US but they are deep in debt due to not taxing the rich exporters while reducing the working tax base by reducing wages of workers.  This, in turn, is actively bankrupting the nation and now China is buying up Japanese debts because, as we see in the CIA stats here, China is NOT deep in debt to ANYONE, anywhere!  And paradoxically, the US-engineered boycott of both Venezuela and Iran has moved them into the creditor nation side of the ledger along with Russia and China.


ΩΩAnd we see over and over again, in the news, China, Russia, Venezuela and Iran moving closer and closer to each other in this very vital area.  Our stupid boycotts are actually making them all stronger, not weaker.  While the NATO/US/Japan alliance sails deeper and deeper into red ink waters and will sink there.  Just this week, they all announced we will stay in the Graveyard of Empires…FOREVER. No withdrawal, no stop to the endless trillions flowing into the rocks of that key but harsh land.  No end to the killings, the rising hatred of the Muslims for the NATO alliance and no end to our own suffering.


ΩΩAnd last of all, the funny news:  Insider Trading Investigated By Feds: 3-Year Criminal, Civil Probe Could End This Year.. HAHAHA…um, the true insiders are the guys who run DC and who are also parts of JP Morgan, Goldman Sachs, etc.  HAHAHA.  They won’t be arrested.  They will be chosen to head the Treasury, the Federal Reserve in NYC (which is the real power, not Bernanke) etc.  Yup, we will clean up the guys at the very bottom.  No examination of the true insider aspect much less, the tribal aspects.

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Filed under .diplomacy, .money matters, Free Trade, gold, Politics, religion, war and peace

49 responses to “Creditor Nations Are Always Stronger Than Debtor Nations

  1. Hello.

    It is a very wonderful site.
    I feature the autumn of Japan now, and am introducing a beautiful autumn tint. Please come to my site by all means.

    Thank you.

  2. paola

    As usual a very eye opener and to the point article, in the same color here is a link to part of a book, which is a must read if one is to have a clear view of what is happening under our collective noses. Thanks for the wonderful postings. Paola

  3. melponeme_k

    When we see things about Japanese culture in the US, it is always the exuberant side. The Kawaii stuff. We never see the reality.

    Have you ever read the murder mysteries of Natsuo Kirino? When I first read her novel “OUT”, I was stunned to see a Japan portrayed as disconnected, struggling with dead end jobs and angry family relations. It didn’t fit with this prosperous aura that is projected onto Japan.

    The Kawaii stuff we see outside is a desperate attempt for the people to break out of their debt depression, their imprisonment by the elites.

  4. acheron

    Elaine, you are wrong:

    if you owe the bank a million dollars, they own you.

    if you owe the bank a billion dollar, you own the bank.

    Trump played this card brilliantly during the various RE busts he went through… there are plenty of amsuing anecdotes there with him, his counsel, and “Ace” Greenberg of BSC (before collapse!)

  5. emsnews

    This is true, acheron, if the bank is a fellow tribal member who doesn’t want to drag their dirty laundry through the public. Instead, Trump was allowed to share his goodies with fellow tribal members so they ‘forgave’ him.

    On the other hand, the Chinese are not our good buddies who want to please us, their end game is to drive us into bankruptcy. You see, an empire is quite different from an individual.

    Another example: if Trump, who is not Sicilian, were to owe money to the Mafia, they would kill him if he tries to go bankrupt. Nations are much more like Mafioso especially if they have nuclear bombs.

  6. eschew

    So what if Asians rule math and fine arts categories? Americans kick ass at hot dog eating!

  7. emsnews

    Actually, last year, I believe, the winner of the hot dog eating contest in Coney Island was a Japanese guy?

  8. ”But when the bankruptcy comes, this gold will be confiscated (history is very clear about this matter!).

    They already have, its called ‘Cash4gold’, other americans have barely considered gold, 2% i would bet.

  9. FireStar

    – There is no Kawaii or Hawaii.

    If I keep nodding my head for any insane demand then its a perpetual Hawaii. If I choose differ then its Kawaii all the way.

    Good education & financial freedom was all he wanted in the first place. Deep financial doodoo is where found himself instead when he woke up from this nightmare.

    This is the bitter reality I have come to realize.

  10. billibaldi

    to acheron
    You owe 1 million dollars, you don’t sleep at night.
    You owe 1 billion dollars , the bank manager doesn’t sleep at night.
    You owe 10 billion dollars, the prime minister doesn’t sleep at night.
    You owe 100 billion dollars, only you sleeps well at night.

  11. emsnews

    No, if you owe $100 billion fears of French, Russian and Chinese communist revolutions haunt one’s sleep not to mention, Nazi type nightmares. Popular uprisings accompany bankruptcies. This is why major empires LOVE to bankrupt their rival empires! They LOVE doing this, it is a MAJOR part of being an empire: to bankrupt rivals.

    This is why all those pet sayings about bankruptcies is so foolish. An empire does NOT want its own attached populations to go bankrupt. This is why the EU bailed out both the US and the PIIGS. This is why the US fears Japan going bankrupt. If China were to go bankrupt, we would be happy as pigs in slosh.

    We were overjoyed when Russia went bankrupt and we cheerfully dismembered it and let much of the population starve literally.

  12. Wu Wei


    You owe 1 million dollars, the bank sleeps well at night, it was created out of thin air anyways
    You owe 1 billion dollars, the bank sleeps well at night, it was created out of thin air anyways
    You owe 10 billion dollars, the bank sleeps well at night, it was created out of thin air anyways
    You owe 100 billion dollars, the bank sleeps well at night, it was created out of thin air anyways

  13. hi

    As long as the world uses the US dollar as a center piece for commerce and views North America as stable, being in/out of debt only matters to US politicians. It is a lip service tool for them to keep score and try to gain/retain power. Even Chinese officials are blaming the Fed Reserve for their inflationary troubles now. The $600 billion plan is an economic weapon against China -very sinister indeed. I am willing to bet that the Fed Resrv will not buy the entire $600 billion. Just the talk of it has cause money to flow into China. It puts more pressure on the Chinese government to do something about it exchange rates.

    Could this be economic warfare we are witnessing?

    The administration supports QE2 even though it goes aginst its export plan.

  14. Steve Murgaski

    Wu Wei: “You owe 1 million dollars, the bank sleeps well at night, it was created out of thin air anyways

    The power to create unlimited amounts of money isn’t shared with every little bank in the land. If it was, they’d give us hyperinflation overnight. So there are rules set up, like the reserve ratios.

    Even though money CAN be created out of thin air, it can’t be given credibility that easily. The law of supply and demand still operates. If you supply more of it than there are goods to buy, the value goes down. So, the people who do have the power to supply money out of thin air do (or should) lose sleep about oversupplying it. If they overuse their amazing power, they lose it.

  15. Wu Wei

    Steve Murgaski said “The power to create unlimited amounts of money isn’t shared with every little bank in the land.”

    Isn’t the bank creating money out of thin air in a fractional reserve scheme? 1 dollar magically turns into 9 dollars today! 100% reserve banking would limit the creation of money NOT this corrupt fractional reserve which empowers the bankers and enslaves the people.

    “If it was, they’d give us hyperinflation overnight.”

    As long as the dollar is the world currency reserve, other countries will have to eat the inflation created by the FED.

    “Even though money CAN be created out of thin air”

    It IS created out of thin air no buts.

    “So, the people who do have the power to supply money out of thin air do (or should) lose sleep about oversupplying it. If they overuse their amazing power, they lose it.”

    Lose sleep over what? They who create/control the money supply today effectively OWN all the wealth produced by OUR labor because the elite made us believe that money is either a commodity or debt while in reality, it’s neither, it has no intrinsic value whatsoever and should merely be used to measure the value between 2 or more commodities. It is NOT wealth in itself. Inflation or deflation does not matter to the moneypulators. In this current financial system the moneypulators profit either way as they HAD NOTHING TO BEGIN WITH. And you really see them losing their power anytime soon? 91% of the people on this blog + EMS do not understand money, let alone the people 😦

    Their power is safe for now. I will tell everyone about them though 😀

    PS the people aka government DO NOT control nor create the money supply, private individuals do that.

  16. Steve Murgaski

    “As long as the dollar is the world currency reserve, other countries will have to eat the inflation created by the FED.”

    That’s the key exactly. _As long as_.

    God didn’t write on stone tablets that the dollar shal be the international reserve currency, forever and ever, amen. There were other currencies before it, and will be other ones after it.

    Nobody needs to understand money for that to happen. All it takes is for the producers of dollars to overproduce them for awhile. People eat the inflation for a long time, but it hits a tipping point sooner or later. Once it tips, all the king’s horses and all the king’s men won’t be able to do anything about it.

  17. emsnews

    The fires of inflation will burn our OWN homes to the ground.

  18. Joseppi

    Does that mean that you think premiums on fire insurance will escalate to the point that no one will be able to afford fire insurance, or do you mean that taxes will rise astronomically in an attempt to cover state and municipal entitlements?
    Oh, no, Elaine, you don’t mean that the hordes of citizens foreclosed out of their homes will be torching our houses in revenge?
    Though I too worry about these scenarios, I’m silent because I am still stung by the time you (and my wife) accused me of being too fatalistic.

  19. Wu Wei

    “Of all the elements of political economy, money is the chiefest ; of all the institutes of money, the right to create it is the most important ; yet not a word concerning the origin, necessity, rise, fall, and loss of this once sacred right by the State, is to be found in any of the Economists.”

    Alexander del Mar – The Science of Money

  20. Wu Wei


    They destroy currencies all the time, yet the moneypulators haven’t lost their power since the days of Nimrod. It’s business as usual. When they successfully destroyed the dollar, by design, they will use the chaos to implement their new one world currency. This is their plan.

    There is only one problem with their plan: sovereign China.

  21. Wu Wei

    China, Russia quit dollar in trade settlement. YAY!!!!!!!!!


    ELAINE: Thanks for the link. Yes, I was looking for this to happen.

  22. Steve Murgaski

    “They destroy currencies all the time, yet the moneypulators haven’t lost their power since the days of Nimrod. It’s business as usual.”

    If we’re going to use money, someone will have the power to create it. That’s just the nature of the beast. Even if we exchange gold coins, the coiners can reduce the gold content behind our backs. But we’re not going to use gold coins, so it will be much easier than that to ‘create money out of thin air’.

    I don’t see any solution to that. You can take the money creation power away from private banks and give it back to government. Okay, will government use the power responsibly? Why would it?

    Government might even be worse. Would it resist the urge to cut taxes to zero and just print up enough money to wage war on the whole planet? Why should it? Politicians in democracies aren’t going to be in power long anyway. Why shouldn’t they print enough money to play santa clause while they’re in there?

  23. seraphim


    I am among those people who did not(and do not)consider you stupid (maybe at times,rarely, annoying). I am back from a long trip through Europe (including Eastern) and America. I was flabbergasted by the entrenched “attitud” of Euro-Americans in regards to Russia and China. They think that they made Russia “subservient” by inducing her into the missile system! I had a laugh at that, but they laughed at me when I pointed out that in fact it is Russia who put her feet into it! She would control the system, helped by the petrol and gas (they could not prevent, after nearly twenty years of grandstanding, the building of both the North and the South Stream gas pipelines!
    I almost don’t need to tell you their view of China! It is true that it is hard to acknowledge that the “gooks” beat them at their own game, hands down!

  24. seraphim

    Oh,and I missed to tell that I went to a (very ordinary, second hand Mozart, Schonberg) concert at Carnegie Hall. Half of the orchestra were Japanese (including the first violinist), but New Yorkers!

  25. emsnews

    As a long time observer of cultural things, once upon a time, many great composers, conductors and players were European Jews or say, Italians, etc. Russia went on to produce a bumper crop of ethnic Serbs and other groups who created tremendous music, dance and writing, etc.

    Now, it has nearly vanished. The ‘hard to learn, hard to master’ arts have moved to Asian hands while the easy stuff (pop music) continues in the hands of the former ethnic groups that dominated the hard apprenticeship high cultural arts. We certainly can ‘rap’.

    And this is a warning sign: the difficult arts either vanish (fine painting requiring lots of thinking and study is replaced with graffiti) or move to new homes and various skills become too difficult to produce.

    The flood of Japanese stars in the classic arts is the PREVIOUS generation to the one still in school today. They still had the patience and drive to excel. But the next generation will probably be a dud. In 20 years, the orchestras will all be Chinese and maybe, Russian (again).

  26. Christian W

    Re: China and Russia start to trade in their own currencies.

    China resently did this deal with Turkey as well.

    Looks like we have a deliberate strategy on the part of China to cut out the dollar.

    Baibai dollar hegemony.

  27. Wu Wei


    Very simple actually: the money supply will be limited and defined. There will be no infinite creation of money because we will put a cap on it. This cap will only be increased or decreased when needed. But the most important thing is that money should have a clearly defined limit. Our measure of value should be fixed and not be defined by supply and demand as it is now! Do we let the measures “inch” or “celsius” be defined by supply and demand!? Our current system is so ridiculous i can’t even begin to explain it 😀

    Don’t get me wrong, Steve, we would really have to put a lot of thought into this system as we never had a system like this before (well not for long as it always got corrupted quickly in the past by the British counterfeiting every government issued currency…greenbacks, assignats etc).

    We need to realize that the current system doesn’t work, i think we can all agree on that!

  28. Wu Wei

    Also, Steve, the government is not a person, it’s society. If we, as a people, decide for example that all derivatives will be outlawed, it will be done, by fiat. No corrupt person(s) will be able to reverse that!

    Another thing, do you want the law enforcement to be privatized? Education? Health care? The building of roads? Taxation?

    So why then, do you want the most important thing any country has, it’s monetary system, it’s economic lifeblood, to be controlled by private individuals? Sovereignty means nothing to you?

  29. emsnews

    No sovereign government ever controlled the paper money printing press. Reason #1 is war: if all a sovereign nation needs to fund a war is to print money the government will rush into a war very easily over the silliest things.

    This is the main reason why international traders and business people wanted a gold standard: to prevent the easily enraged populous from going into one madcap war after another.

    See how easily we go to war? At the drop of a hat. And since we are a paranoid nation with paper money, we almost alway vote for war mongers who promise to spend infinite paper debt money to arm ourselves totally and completely. The sky is the limit.

  30. Steve Murgaski

    Wu Wei, I agree it deserves a lot of thought. We should be holding conferences where people talk about Islamic banking practices, monetarism, Keynesianism, China’s blend of free markets and government control…

    The system we have now is at least partly broken because the people at the top became corrupt. That’s going to be a danger in any economic system. Even on a gold standard, you have to trust that the government has as much gold as it claims to. So there’s no utopian set-up. If there’s money, there’s the potential for abuse.

    We could probably come up with a better system for managing the economy than we have now. But we need the conference, and the political organizing.

  31. Wu Wei

    Hello Steve,

    I agree. The people really need to become aware of the mess that is our financial system. It wasn’t too long ago, about late 19th century, that the people were still discussing who should control the money supply. How far have gone astray (led astray!).

    The status quo have made economics so boring, overly complicated and just plain dull that the people no longer have any interest in what is probably one of the most important issues in any country: money and a monetary system.

    “Luckily”, this crisis is waking people up, albeit very slowly. Now all we need is for us to set aside our differences, get together and start thinking of a new financial system. A system that benefits all people not just those already wealthy or those that have the power to create and control the money supply.

  32. Wu Wei

    EMS said “See how easily we go to war? At the drop of a hat. And since we are a paranoid nation with paper money, we almost alway vote for war mongers who promise to spend infinite paper debt money to arm ourselves totally and completely.”

    Wars are fomented by the elite. Both sides are funded by the elite. When you have leaders who worship death, destruction and lust, yes, we will go to war. Not because, we, the people, want to, but because, they, the elite want to.

    Get rid of this Baal worshipping elite and i’m sure earth will become much more fun.

  33. Wu Wei

    There are no warlike people–just warlike leaders. – Ralph Bunche

    Can anything be more ridiculous than that a man has a right to kill me because he lives on the other side of the water, and because his ruler has quarrel with mine, although I have none with him? – Blaise Pascal

    Old men declare war. But it is the youth that must fight and die. – Herbert C. Hoover

    Either war is obsolete, or men are. – R. Buckminster Fuller

    Wars have ever been but another aristocratic mode of plundering and oppressing
    commerce. – Richard Cobden

    All wars are fought for money. – Socrates

    When the tyrant has disposed of foreign enemies by conquest or treaty, and there is nothing to fear from them, then he is always stirring up some war or other, in order that the people may require a leader. – Plato

    War against a foreign country only happens when the moneyed classes think they are going to profit from it. – George

    The tragedy of modern war is that the young men die fighting each other–instead of their real enemies back home in the
    capitals. – Edward Abbey

    War is a quarrel between two thieves too cowardly to fight their own battle. – Thomas Carlyle

  34. emsnews

    How could Socrates make such a stupid statement? He wasn’t a mere philosopher, he also was a soldier and his city state, Athens, was always at war. NOT FOR MONEY. But for control of TRADE.

    A huge, huge, huge difference and this shows how people are fooled into thinking all of this is about mere money. Money is an abstract representation for TRADE. It is not even remotely trade itself. And this is why the history of trade is also the history of conquests.

  35. emsnews

    Also, the internet is full of fake quotes. Beware of doing this.

  36. Wu Wei

    Ems said “NOT FOR MONEY. But for control of TRADE.”

    Whatever happened to your I BE BANK, I BE BANK philosophy? You always told us China had decided to BE BANK. Money matters, the name of your old blog, remember?

    You are contradicting yourself, miss Supkis.

  37. Wu Wei

    History have been nothing but fights/wars over control of the money supply.

    Just recently, Iraq wanted to sell oil in euro. Invade Iraq. Dollar hegemony continues.

  38. emsnews

    China IS ALREADY the ‘bank’…they are the biggest creditor nation on this flipping earth. And pray tell, how did they gain this??

    VIA TRADE. Ahem.

  39. emsnews

    NO NATION EVER fights over ‘money supply’. That is meaningless. They do fight over control of commodities such as gold that could once upon a time be turned into ‘money’ just as many other things could be used as a basis for ‘wealth’ but the true nature of ‘money’ isn’t ‘how do you print numbers’ but rather, What can you buy with these IOU scraps of paper?

    And the answer is, ‘Trade goods of various sorts’. So…it always goes back to trade. What do you trade, who controls trade routes and who collects tolls on trade.

  40. Steve Murgaski

    The US wants trade denominated in its own currency so it can go into debt more easily than other countries. This is turning out to be a horrible long-term strategy.

    As long as trading is done in dollars, people have to hold dollars. Which means dollars can be printed up and used to buy things without short-term consequences — because people hold onto them. But in the long-run, the country succumbs to the temptation to print money instead of competing fairly. Then, when other currencies start to look more attractive, it’s in over its head.

  41. emsnews

    Worse, the plan also destroyed our own economic system.

    By the way, finally, the first installment of the Wikileaks diplomatic destructo release has hit the internet. Lots of fun stuff about Hillary and Obama looking to spy on top UN officials, other embassies and assorted other people we must not spy on because it is effing illegal as all hell.

  42. Wu Wei

    Elaine, are you implying China had any other choice but to become creditor to the USA? The system we live in today is called dollar hegemony. China has two options availble to them with the toiletpaper they receive(d) from the USA: 1. invest it in USA debt or 2. hold on to them. They can’t spend the dollars back home without causing instant inflation since the goods produced have already been exported. So it’s more like China WAS ALLOWED TO BECOME BANK.

    On to your next reply “NO NATION EVER fights over ‘money supply’. That is meaningless”. Where did i say anything about nations fighting over the money (supply)? Individuals (Rothschild, Warburg et al) fight over control of the money (supply), of course these individuals pretend to be governments (Federal Reserve, Bank of England etc). Usurpation it’s called i believe. And these people fight ALL THE FREAKING TIME over this control. You said “They do fight over control of commodities”, so why do they fight over control of commodities because when you own/control these commodities, one is able to issue and control the money based on these commodities (if we view money as a commodity). Is that so hard to understand? It’s all about the FREAKING MONEY. When money is viewed as a commodity or debt as we do today, creating and controlling the money means you effectively own all the wealth the people gain by trading, producing etc.

    If we were to have a correct view of what money really is (neither debt nor commodity), then yes, trade would have meaning again but IT CAN EVER NEVER be more important than developing your own domestic economy. Trade, trade, trade blabla yadayada. You are THE advocate of globalization even though you always talk about protectionism. Babylonian confusion!

  43. Wu Wei

    Why China must buy US Treasuries with her Trade Surplus Dollars by Henry C.K. Liu

    Henry C.K. Liu is well, genius. He truly understands the financial system of today. Read anything you can by him, people.


    ELAINE: That goes under ‘duh’. When the US was the world’s top creditor nation (before the Vietnam War) we bought the debts of other governments such as Weimar Germany or the dying British Empire which used to be a creditor nation but became a debtor nation after WWI.

    This isn’t a sign of weakness. IT IS A SIGN OF POWER. China holds our debts and yes, we can default on it like Germany did to us in 1930, for example. But this leads to fatal messes (WWII, for example) and the US is in deep waters in this regard because our debts accumulated by China also are connected to our steel manufacturing being moved to China so China is much stronger than us if a global war broke out and everyone had to choose sides.

  44. Wu Wei

    Oh, Elaine and Steve, of course this system is not sustainable.

    But when the dollar finally has been destroyed, by design, whenever that may be, who will make use of that chaos to implement their new world reserve currency…..China or the West (read Rothschild et al)?

    This is THE question on my mind.

  45. Wu Wei

    “Since 1978, China has exposed itself to the disadvantages of export trade denominated in dollars. Much of the wealth created in China during the last 30 years has ended up in the US, leaving China in an extended state of capital shortage despite being the largest holder of foreign reserves in the world. When it comes to consumer power and environmental pollution, China is only the kitchen; the dinning room is in the US. In a new world economic order, China should move the dinning room back inside China.”

    China and a New World Economic Order by
    Henry C.K. Liu

  46. Pingback: Countries Debt | More More Pics

  47. Hello,

    I am Sree Buddha Dev Ray, I read your article “Creditor Nations Are Always”. I became very happy to read your article.

    If anybody read your article, he or she will be benefited.

    Thank you

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