U.S. House of Representatives Bill “...
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Mandela

Dianella, Australia

#23 Jul 1, 2014
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US Economic Outlook for 2014 | US Economic Forecast 2014
Will Buried Provision in H.R. 2847 Decimate U.S Economy on July 1, 2014?
June 16, 2014

Did the U.S. government really seal the fate of the U.S. economy back in March 2010, when it passed H.R. 2847? On July 1, 2014, H.R. 2847, better known as HIRE (the Hiring Incentives to Restore Employment Act) goes into effect.

On the surface, the bill provides payroll tax breaks and incentives for businesses to hire unemployed workers.

But it’s a little-known provision within Bill H.R. 2847 that is causing some financial pundits to predict the end of America. The provision known as FATCA (the Foreign Account Tax Compliance Act) insists foreign banks keep better track of the flow of money owned by U.S. citizens.

FATCA requires banks in other countries to send the IRS personal information (name, address, and account information) about transactions their American customers make. If a bank fails to comply, the U.S. will impose a 30% withholding tax.

The fear is that foreign banks will not want to have to deal with the IRS and instead willchoose to take the path of least resistance by avoiding American customers, and by extension, their U.S. dollars altogether.

At the same time, FATCA could also be cost-prohibitive for small- and medium-sized foreign banks; meaning it’s cheaper and easier to just divest from U.S.-based assets.

Why would any bank willingly refuse to do business with a U.S. customer? Because there are more financially secure markets elsewhere for foreign banks to invest in: China, Russia, Germany, Australia, France, Canada…the list goes on.

How is that possible? After all, the U.S. dollar has been the world currency since World War II, and being the world’s currency means Americans can deal directly with any country with their own currency.

In effect, the U.S. doesn’t need to produce anything to create wealth; it can just print more money to get out of debt or create the illusion of liquidity. The same cannot be said for the rest of the world, however, If Germany wants to buy oil from Russia, it has to exchange its currency for U.S. dollars; it can only do this by generating revenue from products and services others want to buy.

Why will the world no longer want to favor the U.S. dollar as the reserve currency? Simple: the Federal Reserve has, with its quantitative easing policy, dumped more than $3.0 trillion into the U.S. economy since 2008. Where did it get the money? It printed it out of thin air.

Its simple math: the more there is of something, the less value it has. Not only has the U.S. dollar been devalued, the country has seen its national debt soar. Before the markets crashed in 2008, the U.S. was in debt to the tune of $10.0 trillion; today, the U.S. holds debt of $17.7 trillion!

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With the U.S. dollar losing favor as the reserve currency, countries will no longer want to hold large quantities of U.S. dollars and foreign businesses will turn their backs on U.S. markets. With fewer people wanting to hold U.S. currency, the U.S. will no longer be able to print its way out of debt.

And with fewer foreign banks willing to take U.S. deposits, Americans, with their fists full of devalued currency, will be unable to exchange it for more stable currencies.

So, will H.R. 2847, once implemented on July 1, 2014, lead to the end of America? No, for many reasons. First, the U.S. is the world’s biggest economy; we produce and consumer more than anyone else. While the U.S. dollar has been devalued, it still holds value compared to other currencies and economies.

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Mandela

Dianella, Australia

#24 Jul 1, 2014
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Continued

So, will H.R. 2847, once implemented on July 1, 2014, lead to the end of America? No, for many reasons.

First, the U.S. is the world’s biggest economy; we produce and consumer more than anyone else. While the U.S. dollar has been devalued, it still holds value compared to other currencies and economies.

The U.S. government is also transparent. Foreign institutions can access our economic data and forecasts and rely on the data; the economic data provided by certain other global powerhouses is not quite as trustworthy or transparent.

Instead of concentrating on July 1, 2014 and H.R. 2847 being the end of America, it might be better to look at what America will look like at the end of 2014.

According to the mainstream media, the U.S. economy is back on track after weathering the biggest financial meltdown since the Great

Depression. Wall Street pundits and even the U.S. government point to a number of factors suggesting the U.S. economy is back on solid footing: the five-plus-year bull run on the stock market, the major indices trading at record highs, housing prices having rebounded, and the job market improving.

Unfortunately, those numbers do not tell the full story. The major U.S. indices may indeed be trading at record highs, but the economic foundation holding those stocks up is shaky at best.

Since the beginning of 2013, quarter after quarter, more and more companies on the S&P 500 have revised their earnings guidance lower. To compensate for weak results, companies masked their poor earnings and revenues with cost-cutting measures and near-record stock buyback plans.

The unemployment rate is 6.3%, but the underemployment rate is an eye-watering 12.3%. On top of that, 46.1 million, or 14.5% of the country, receive food stamps. And more and more Americans are in debt;
according to the most recent data, Americans owe $11.65 trillion in debt. The average credit card debt is $15,191, the average mortgage debt is $154,365, and the average student loan debt is more than $33,000.

What about U.S. housing? Housing prices have risen 25% since the beginning of 2012, but still need to increase more than 20% to reach their pre-recession highs.

And the U.S. housing market is too expensive for most first-time home buyers.

In fact, first-time home buyers, the barometer for how well the U.S. economy is doing, accounted for around 16% of new-home purchases in April, down from a range of 25% to 28% between 2001 and 2007.

As for existing home sales, first-time buyers made up just 29% of purchases; the 30-year average for first-time homebuyers, and a number economists consider healthy, is 40%.

And overall, the homeownership rate in the U.S. is at its lowest levels in almost 20 years.

Bill H.R. 2847 will not be the end of America; on July 1, 2014, America will look identical to the way it does now. But as for America at the end of 2014, that’s another story.

The surface data appears really great, but it’s not a true reflection of Main Street. Take a closer, more detailed look at the economic data and you’ll see that the U.S. economy will be much worse on December 31, 2014 than it is today.

To get a handle on debt and raise the standard of living on Main Street, the broader U.S. economy needs to experience sustained growth—and that just isn’t in place yet.
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Good luck

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yon

Miami Beach, FL

#27 Aug 9, 2014
The last 3 months have seen Russia's "de-dollarization" plans accelerate. First Gazprom clients shift to Euros and Renminbi, then the UK signs currency swap agreements with China, then NATO ally Turkey cuts ties and mulls de-dollarization, Switzerland jumps in the currency swap agreements, and BRICS create their own non-US-based funding vehicle, and then finally this week, Russia's oligarchs have shifted cash holdings to Hong Kong. But this week, as RT reports, Russian and Chinese central banks have agreed a draft currency swap agreement, which will allow them to increase trade in domestic currencies and cut the dependence on the US dollar in bilateral payments.“"The agreement will stimulate further development of direct trade in yuan and rubles on the domestic foreign exchange markets of Russia and China," the Russian regulator said.

As RT reports........http://www.zero hedge.com/news/2014-08-09/de-d ollarization-accelerates-china russia-complete-currency-swap- agreement

If the major financial players don't fund US $17 Trillion debt bomb....look out below.
Mandela

Trigg, Australia

#28 Aug 10, 2014
yon wrote:
The last 3 months have seen Russia's "de-dollarization" plans accelerate. First Gazprom clients shift to Euros and Renminbi, then the UK signs currency swap agreements with China, then NATO ally Turkey cuts ties and mulls de-dollarization, Switzerland jumps in the currency swap agreements, and BRICS create their own non-US-based funding vehicle, and then finally this week, Russia's oligarchs have shifted cash holdings to Hong Kong. But this week, as RT reports, Russian and Chinese central banks have agreed a draft currency swap agreement, which will allow them to increase trade in domestic currencies and cut the dependence on the US dollar in bilateral payments.“"The agreement will stimulate further development of direct trade in yuan and rubles on the domestic foreign exchange markets of Russia and China," the Russian regulator said.
As RT reports........http://www.zero hedge.com/news/2014-08-09/de-d ollarization-accelerates-china russia-complete-currency-swap- agreement
If the major financial players don't fund US $17 Trillion debt bomb....look out below.
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It seems the turkeys are coming home to roost for the last time .........
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Where did it all go so wrong..........

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yon

Miami Beach, FL

#29 Aug 10, 2014
Do Chinese cook with turkeys?

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