San Diego Housing Bubble News and Analysis

I think a simple congressional law would do it.

But I would be 100% opposed to it. We already have global currencies: they're called precious metals.

If anything, Congress should overturn the law that bars the states from creating their own currencies. In times like this, better states could see their own currency do well on the International market vs. the dollar.

I believe that it would have to be brought to the floor for a vote by the Supreme Chancellor of the Galactic Republic.

Ya , like that would ever happen, he's the boss of everything. They killed all the Jedi knights didn't they? Were so screwed now.

I caught a slight clip on the BBC about Geithner trying to get someone in charge to regulate global banking. One person that has oversight. Maybe it's just me. I'm having a little trouble understanding that.

I mean, WTF. Are we already so dumified that that sounds like a good idea?

Why don't we just publicly put Rockefeller in charge and get it over with.

Edit - Here's part of the story BBC

From the article:

The treasury secretary said the existing financial system had "failed in basic, fundamental ways".
"These failures have caused a great loss of confidence in the basic fabric of our financial system," he said.
He also talked of "unwise" risk-taking and a failure of "market discipline".<---Is he talking about the unwise risk his old employer recommended.

The funny part is Giethner worked for the Fed during the bubble and here is part of the Fed's job description:

Preventing asset bubbles
The board of directors of each Federal Reserve Bank District also have regulatory and supervisory responsibilities. For example, a member bank (private bank) is not permitted to give out too many loans to people who cannot pay them back. This is because too many defaults on loans will lead to a bank run. If the board of directors has judged that a member bank is performing or behaving poorly, it will report this to the Board of Governors. This policy is described in United States Code:[26]
Each Federal reserve bank shall keep itself informed of the general character and amount of the loans and investments of its member banks with a view to ascertaining whether undue use is being made of bank credit for the speculative carrying of or trading in securities, real estate, or commodities, or for any other purpose inconsistent with the maintenance of sound credit conditions; and, in determining whether to grant or refuse advances, rediscounts, or other credit accommodations, the Federal reserve bank shall give consideration to such information. The chairman of the Federal reserve bank shall report to the Board of Governors of the Federal Reserve System any such undue use of bank credit by any member bank, together with his recommendation. Whenever, in the judgment of the Board of Governors of the Federal Reserve System, any member bank is making such undue use of bank credit, the Board may, in its discretion, after reasonable notice and an opportunity for a hearing, suspend such bank from the use of the credit facilities of the Federal Reserve System and may terminate such suspension or may renew it from time to time.
The punishment for making false statements or reports which overvalue an asset is also stated in the U.S. Code:[27]

Juxtapose that with Greenscam's 2004 "the housing market is sound and ARMs are great" speech.

So what we have is an agency who's job it is to protect from asset bubbles do everything is can to create one and then come back in as Secretary of the Treasury and demand more power for the problem they created. HAHAH

While simultaneously his other employer the IMF is recommending a world currency reserve with China, the country his father spent 30 years in building up. Oh, and his major in school was east asian economics and he speaks chinese.

Go to sleep america it was (insert political party of choice here) fault.

Turns out crises are wonderful mechanisms for power consolidation.

Am I just crazy and losing it, but is what was discussed in that movie Zeitgeist actually in the process of happening.

You are not crazy, but the times are.

Congratulations, jp. You have officially taken the red pill and unplugged yourself. You will now be leaving the Matrix. Strap yourself in and hold on. It's going to be a wild ride.

Below is one of my favorite quotes from a Holocaust survivor whose words are almost prophetic today:

“To live in this process is absolutely not to be able to notice it… Each step was so small, so inconsequential, so well explained or, on occasion, ‘regretted,’ that, unless one were detached from the whole process from the beginning… one no more saw it developing from day to day than a farmer in his field sees the corn growing. One day it is over his head.”

-Milton Mayer, “They Thought They Were Free

By 2012, I believe the corn will be towering over our heads.

Our society is run by insane people for insane objectives. I think we're being run by maniacs for maniacal ends and I think I'm liable to be put away as insane for expressing that. That's what's insane about it.
John Lennon

In a way, the world-view of the party imposed itself most successfully on people incapable of understanding it. They could be made to accept the most flagrant violations of reality, because they never fully grasped the enormity of what was demanded of them, and were not sufficiently interested in public events to notice what was happening. By lack of understanding the remained sane. George Orwell 1984

Welcome to crazy-town!

Economists will fight tooth and nail against any global currency.

partypup - arraya - thanks. I feel less crazy. Any chance I can vomit up the red pill? No turning back? Any antidote?

Sure. Just close your eyes and imagine this. After four years of disastrous socialism brought to you by Obama, Bush manages to get re-elected as president.

There, bet that made you barf. Always willing to help people barf... XBoxBoy

What is being discussed is not a new currency as a replacement for $US within this country, but a less volatile unit of measure for international trade.

Instead of having one barrel of oil valued at $US52 we will have a barrel of oil valued at WCU33, where WCU (World Currency Unit) is a function of several currencies. The idea is to limit the ability of the US to tax world wide populous at will.

It is natural for the rest of the world to try to shield off from consequences of O's policies the same way we try to reduce/remove the foreign oil dependency, no?

It is completely irrelevant whether oil is valued in dollars, WCUs, or South African rands. The currency in question would be purchased by the buyer of oil on the forex market, transferred to the seller, and immediately sold on the same forex market. It has nothing to do with "limiting the ability of the US to tax world wide populous" or "shielding off from consequences of O's policies". If China does not want to keep its reserves in dollars, they are free to diversify into euros and anything else they want. No need to create some artificial currency for that.

I'm no expert, but I think there's more to it than this. There would be no need for the governments to get involved if it was just a question of a basket of currencies being used to price things. Any oil exporter or even any two parties could make their own deal regarding payment in whatever currency (or basket of currencies) they wanted to deal in.

I think the issue is more that currently most central banks settle international liabilities in dollars, and the IMF lends and generally works in dollars. Because many central banks try to peg their currency (either firmly or loosely) to the dollar foreigners are unhappy with our government's devaluation of the dollar. (In order to keep their currency low, they need to buy dollars and sell their own currency, something they are getting tired of doing.) Once the foreign central banks start talking about using a currency other than the dollar for settlement, that's where the issues come in.

So, while I think you're correct that the issue is not about replacing the dollar as the normal currency in the USA, the issue is also much more political than just what will oil or other commodities be priced in. The issue is will central banks, (including ours) be willing to settle debts in this World Currency Unit? And if so, will we allow banks to do stuff like fractional reserve lending in WCUs? If so, who controls the banks or put another way, who is in charge of monetary policy for the WCU?

XBoxBoy

edit - looks like esmith beat me to it with some of the argument - oh well....

Here is the best piece on the dollar as reserve currency and how it works to give the US an artificially high standard of living. Hey, it was a nice run that was bound to end at some point. Hopefully we don't start a war to keep getting our free lunch.

http://www.atimes.com/atimes/China_Busin...
Page 1 of 4
CHINA'S DOLLAR MILLSTONE, Part 1
Breaking free from dollar hegemony
By Henry C K Liu

The vast expansion of US-led globalized trade since the Cold War ended in 1991 had been fueled by unsustainable serial debt bubbles built on dollar hegemony, which came into existence on a global scale with the emergence of deregulated global financial markets that made cross-border flow of funds routine since the 1990s.

Dollar hegemony is a geopolitically constructed peculiarity through which critical commodities, the most notable being oil, are denominated in fiat dollars, not backed by gold or other species since then president Richard Nixon took the US dollar off gold in 1971. The recycling of petro-dollars into other dollar assets is the price the US has extracted from oil-producing countries for US tolerance of the oil-exporting cartel since 1973. After that, everyone accepts dollars because dollars can buy oil, and every

economy needs oil. Dollar hegemony separates the trade value of every currency from direct connection to the productivity of the issuing economy to link it directly to the size of dollar reserves held by the issuing central bank. Dollar hegemony enables the US to own indirectly but essentially the entire global economy by requiring its wealth to be denominated in fiat dollars that the US can print at will with little in the way of monetary penalties.

XBoxBoy - yeah. That thought will make anyone puke a sack lunch. I was hoping the red pill would make it's way out, but I think it already dissolved.

Now I have to get that thought out of my head. Just the mere mention makes me queasy.

Why? I'm an economist (not tied to the banking or real estate sectors) and I feel no desire to fight something that makes no sense to begin with.

BGinRB: You're one of the few grownups in this thread! Thank you for educating the younger, more passionate Piggs, who apparently envisioned the end of national currencies. More than a unit for global trade, what is being discussed is a 'currency' that can be used by countries to be held as foreign reserves. (Wasn't the SDR created for this very purpose decades ago? It just never became as ubiquitous as the greenback).

Arraya: Thank you for sharing the very lucid atimes.com article. I'll read the rest of it.

didn't they do that back in the 70's?
heck wasnt that the basis for creating the Euro?

Something like that, right. Euro replaced ECU. Some of the currencies from ECU basket are still around.

My point is that the basket is not going to replace $US internally.

You know this makes me think aout the youtube video i seen where the currnet money form becomes replaced by a more uniform system the would remove a lot of potential crime.

Check it out :
http://www.youtube.com/watch?v=DLvTYuh1_JI

Why wait for the Government? We can do it on are selfs.

Regards,

http://www.msnbc.msn.com/id/3032619/#304...

XBoxBoy get my vote for best (worst) nightmare. You should write scripts for the horror flix.