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alstry (36.57)

Printing/Borrowing.....vs......Printing/Monetization

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October 13, 2009 – Comments (10)

When the term printing money is uses in finance.....often it refers to printing by borrowing.  Since America was founded, America has always maintained integrity with it currency.  A nation borrowing to raise money is acceptable because it creates a legal obligation to pay it back.  As such, there is a consequence and cost to the borrowing.

However, simply printing money to pay off obligations has NEVER happened in America and ALWAYS been met with severe consequences whenever any nation has ever tried to counterfeit currency.  The reason is simple, if the world's central bankers allow one nation simply to print money out of thin air......money will lose it legal significance and integrity with trade and value around the world would be destroyed.

Bankers simply cannot allow a nation to monetize to meet obligations without swift and immediate consequences.  America is unique, it has a long history of integrity, a massive military, and as a result we have been bestowed with the privilege of being the world's reserve currency.  Such a privilege has given our citizens a number of benefits including, but not limited to cheap Oil and other imports.

The problem now is our tax receipts are evaporating and our expenses exploding due to zombulation policies.  Our deficit is on track to reach $2 Trillion dollars and there is no institution or nation in the world who can fund such a massive deficit for any sustainable period of time.

As a result, it appears Obama, Benny, and Timmy are running out of time on how they wish to proceed....if we keep printing by monetization, it is getting more and more clear that fewer and fewer countries will be willing to accept our currency as valid consideration for trade.  If that occurs, the consequences to the American people will be immediate and severe.  Costs for everything will explode and availability will be scarce. 

At that point, our President might be faced with the difficult question of being forced to attack another nation simply to get needed resources for his citizens.

The other choice is to restructure....and for government to spend within the relative constraints of its revenues.  If government cuts back, our GDP will contract materially but at least we will be able to build a sustainable foundation for future growth.

Right now, by simply printing/monetizing money.....Benny is effectively destroying America's savings and integrity while setting up America for massive distress.......even with counterfeiting/monetization, revenues to America's most important companies are evaporating....revenues can't keep contracting 25% quarter after quarter.....if they do, it will not be long before revenues contract to practically nothing.....despite how high earnings are reported through accounting gimicks.

CSX Q3 revenue declines 23% to $2.3 bln

If goods are not being shipped, they are not being sold....and a depression on only a 10% decline in GDP.

10 Comments – Post Your Own

#1) On October 13, 2009 at 4:17 PM, russiangambit (29.49) wrote:

The title shoud say - printing by borrowing or printing by stealing.

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#2) On October 13, 2009 at 4:21 PM, alstry (36.57) wrote:

Occasionally Alstry tries to be a bit diplomatic....I am trying to see how many come up with the right conclusion....you are first.....not surprising.

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#3) On October 13, 2009 at 4:24 PM, alstry (36.57) wrote:

WHAT DOES THIS MEAN??????

"The third quarter reinforces our view that the worst of the recession is likely behind us," said Michael Ward, chairman, president and CEO of CSX. "At the same time, our coal business will be impacted by weak demand well into 2010."

IS THERE MORE RECESSION AHEAD??????

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#4) On October 13, 2009 at 5:00 PM, alstry (36.57) wrote:

AIRLINE COLLAPSE WORLDWIDE!!!!!

PRAGUE, Oct 13 (Reuters) - The supervisory board of state-owned Czech Airlines (CSA) on Tuesday urged swingeing salary cuts for pilots and big job reductions to keep the carrier in business.

The new supervisory board chief proposed cancelling most employee benefits, cutting pilot salaries by up to 45 percent and reducing staff numbers by about 1,200 to 3,000.

The company, which is slated for privatisation, lost $99.6 million in the first half of the year and has already cut about 400 jobs since last month as part of a restructuring plan.

http://www.forbes.com/feeds/afx/2009/10/13/afx6994841.html

JAL TO CUT 9000......

http://home.kyodo.co.jp/modules/fstStory/index.php?storyid=464894

THOUSANDS LOSING JOBS....45% WAGE REDUCTIONS.....BRING BACK THE RECESSION

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#5) On October 13, 2009 at 6:53 PM, bridgeboy0 (30.97) wrote:

CSX Q3 revenue declines 23% to $2.3 bln

Not that it matters to you, but CSX actually met expectations for revenue for Q3.  They beat expectations for profits and the stock is up after hours.  It's a very good thing that you report this info to the rest of Motley Fool without any bias or slant unlike the mainstream media.  We're all lucky that you have decided to grace us with you insights.

The transportation services company reported earning 74 cents a share on revenue that fell 23% year over year, to $2.3 billion, due primarily to a 15% decline in volume and lower fuel surcharge recovery.

"The third quarter reinforces our view that the worst of the recession is likely behind us," said Michael Ward, chairman and CEO of CSX. "At the same time, our coal business will be impacted by weak demand well into 2010."

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#6) On October 13, 2009 at 6:56 PM, cudakhan (< 20) wrote:

I have flown in eastern Europe, they can’t afford to make any cuts.  The maintenance is poor, you're taking your life into your hands when you fly on these planes.

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#7) On October 13, 2009 at 8:58 PM, alstry (36.57) wrote:

cud,

If the dollar looses reserve status.....based on our deficit, Eastern Europe might look good to where we could be.

bridge,

you are right it doesn't matter expectations were met....worse should not be better than expected.......but it is in this envirnoment until we simply can't get any worse if we maintain the current trajectory.

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#8) On October 13, 2009 at 9:03 PM, alstry (36.57) wrote:

IT IS SIMPLY NOT POSSIBLE THAT THE RECESSION IS OVER AND PRACTICALLY EVERY CITY, COUNTY, AND STATE ARE MAKING SIGNIFICANT CUTS GOING FORWARD....NOT TO MENTION THENS OF THOUSANDS OF BUSINESSES

City of Aurora - 50

Millers Brothers Mining - 85

Update: Bloomberg Buys BusinessWeek - Layoffs Coming?

Premier Resort at BareFoot Resort - Layoffs Today?

City of Williams - 3+

Ohio State Prisons - 41 Layoffs , 118 Vacant Positions Eliminated 

Shakespeare & Company - Slash Debt = Layoffs

Gov Lynch - 250 State Workers to Lose Jobs

Czech Airlines - 1,200 - 3,000

Country Financial Offers 400 Early Retirement

NewPage Corporation - Slowdown = Layoffs

Albemarle Corporation - New Layoffs Should Be Minimal 

Osceola County - More Layoffs 40?

Mueller Copper Tube Plant - 37

Update: City of Manteca - 12 Officers 

City of Macomb - Budget Concerns .... 10% in Cuts?

City of Kennewick - Layoffs may be Necessary 

Brighton Area Schools - Layoffs / Closing Possible

Japan Airlines Corp. - Raised to 9,000 layoffs

BDZ Rail Company ( International ) - 1,300 Total

Nestle Oil ( International ) - 351 total jobs

City of Bossier - "Significant" Layoffs Possible

Midwest Airlines Acquisition Will Lead to Layoffs

Update: NH State Union Rejects Contract Proposal  - Layoffs Coming this week?  

Erie County Job & Family Services - 7 Next Week

Pennsylvania Libraries - Hours Cuts, with Layoffs Still Possible

Straub's in Ellisville

Barnes & Noble Bookstore closing Lakeland Store

Coffee Bean Emporium & Gifts

O'Malia's Food Market Closing Northside Store

Frankie's Italian Grille 

Kohl's Closing Wisconsin Distribution Center - 250 Jobs Effected

Update: Coleman to move Distribution Center from Wichita 

Baker Hughes Inc in Houston - 62 in December

University of Toledo Medical Center - 50

CurrentTV - Layoffs Coming?

Metro Light Rail - 4 

Team Broadcasting Services - 96

Volvo North America - 50

Lockheed Martin Loses Contract - 12+ Layoffs

Clariant - 800

ZillionTV - 1/3 of its Workforce

Update: Conde Nast - Layoffs at Glamour and a Dating Site

Victor Valley College - 28?

The Chief Justice of the Iowa Supreme Court Warns of Layoffs

Centenary College of Louisiana - Reducing Staff 15%

Update: State of New Hampshire Employees will find out ...Furloughs or Layoffs

Speedy Hire PLC ( International ) - 270 in last 6 months and more Job Cuts to come

Update : Onondaga County - Layoffs Coming?

DaySpring Inc - 53

City of Grand Rapids - Layoffs Coming?

Update: State of Vermont - 27 Layoffs , 123 Vacant Positions Eliminated 

Verizon ( Mass, and RI) - 200

Yakima County - up to 60 Layoffs

Missouri Gov. Announces More Job Cuts

York County Stretch Thin After Layoffs

Abredeen Council ( International ) - 1,200 Over next Few Years

City of Palo Alto - Falling Tax Revenues, Layoffs Coming?

Village of Snowmass Colorado - 6

City of Moraine - 187 

Niagara Pharmetics  ( International ) - 30

BPG Properties - 10% of Corporate Staff

Consolidations, Layoffs Hits Atlanta Drugmakers

Layoffs Hit Public Health Workers Hard

Halifax Health - 80 Jobs Total

Whatcom County Bus Service - Cutting Routes, up to 20 Layoffs

Virginia Tech Prepares Employees for Layoffs

Boeing - 130 Layoffs Notices

City of Northwood - 5

Pittsfield School District - More Layoffs?

Edipresse ( International ) - 10% of Workforce or 100

Hamilton County Library Systems - Layoffs / Closings Possible

City of Spokane - 24 Officers?

State of Indiana - Budget Problems, Layoffs Possible

Oral Roberts University - 124

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#9) On October 13, 2009 at 9:15 PM, wvillegas007 (< 20) wrote:

Romanian government collapses after less than a year:

http://www.ft.com/cms/s/0/347311be-b859-11de-8ca9-00144feab49a.html

 WHOS IS NEXT??

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#10) On October 13, 2009 at 9:49 PM, AvianFlu (21.95) wrote:

Damn...I called and Cabela's is out of shotguns!

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