The $1 Billion Armageddon Trade

[Phinnaeus Gage]

http://etfdailynews.com/2011/07/25/investors-the-1-billion-armageddon-trade-placed-against-the-united-states/

It looks like our AAA rating is about to have a fender bender and may need to rely on a towing service to get around. I'm not a speculator, I'm a forum guy (sorry, Bones). Somebody has made a bet, a $1B bet nonetheless, possibly knowing that the US is going to default or lose its AAA rating. If he (not a woman--read http://forum.bitcoin.org/index.php?topic=32386.0 ) wins, he'll decuple his investment. I personally find that fact outrageous. No one should be able to make a tenfold, or more, profit on any investment--unless its for the betterment of the overall global community (had you there for a second).

Any thoughts on how this may effect Bitcoin?

Bitcoin: Default Proof!

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the u.s. has already defaulted.

[hugolp]

The rating agencies are regulated by the USA government. The USA government will never loose the AAA rating by these agencies.

[westkybitcoins]

the u.s. has already defaulted.

Multiple times, no less.

[kiba]

I personally find that fact outrageous. No one should be able to make a tenfold, or more, profit on any investment--unless its for the betterment of the overall global community (had you there for a second).

Why are you making moral judgement on how much profit a person should be able to make?

[The_JMiner]

It depends on what type of agreement is reached.

A) No agreement, then highly likely. The republicans would love for some shit to happen and blame Obama. (2012 elections hello....)

B) Debt ceiling is raised but only enough for 6 months. Still likely that we could lose our triple A

C) Debt ceiling is raided substantially.  No we do not lose our triple A.

[Phinnaeus Gage]

I personally find that fact outrageous. No one should be able to make a tenfold, or more, profit on any investment--unless its for the betterment of the overall global community (had you there for a second).

Why are you making moral judgement on how much profit a person should be able to make?

I wasn't. The statement you're referring to was obviously tongue-in-cheek. I even clarified that fact by placing the phrase "had you there for a second" in parentheses knowing that if I didn't, I may end up getting a comment such as yours. I was trying to cover all bases, but still got called out. The next time I'm at bat, I promise to do better.

BTW, I harvest and buy reclaimed barn wood for a living. I buy at pennies on the dollar and make 400-1,000+ percent profit on each transaction. Therefore, I have no qualms in making as much profit as possible, and pass no moral judgement on others who do.

Thank you kindly, kiba, for the comment, and please don't take my comment towards you personal.

Bitcoin: Now Accepted at Quark's Bar, Grill, Gaming House and Holosuite Arcade

[Phinnaeus Gage]

It depends on what type of agreement is reached.

A) No agreement, then highly likely. The republicans would love for some shit to happen and blame Obama. (2012 elections hello....)

B) Debt ceiling is raised but only enough for 6 months. Still likely that we could lose our triple A

C) Debt ceiling is raided substantially.  No we do not lose our triple A.

"C) Debt ceiling is raised substantially.  No we do not lose our triple A."

This would be my favorite option. If we went from an AAA rating to an AA, I would probably start drinking again.

[foggyb]

It depends on what type of agreement is reached.

A) No agreement, then highly likely. The republicans would love for some shit to happen and blame Obama. (2012 elections hello....)

The democrats would love for some shit to happen and blame have Obama ride to the rescue. (2012 elections hello....)

[Seraphim401]

I think the U.S. will lose it for while,but get it back again.
Seems like the real powers of this world wants weaken every strong country,so no one can stand in way of world government.
In their sick twisted minds I bet they think they are creating some kind of power equilibrium.
What do you think the hype about China is all about?Every time those fake commies "create" some kind of weapon it's hyped by the media (Refurbished Russian aircraft carrier,stealth bomber that Clinton sold to them etc...).Never again will the world know a power like the USA.

[Palmdetroit]

It depends on what type of agreement is reached.

A) No agreement, then highly likely. The republicans would love for some shit to happen and blame Obama. (2012 elections hello....)

B) Debt ceiling is raised but only enough for 6 months. Still likely that we could lose our triple A

C) Debt ceiling is raided substantially.  No we do not lose our triple A.

AAA will be lost doing C as well, just FYI - And those who think we should do another 2.5 trill.. that's 25k per every person in this country... and it will be all gone right after next years elections,... if it even lasts that long

1million+ liability for every taxpayer as of today... no possible solution unless the dollar loses 90% of value



for the all the numbers that show just how sad it's become:  image courtesy of:
http://usdebtclock.org/index.html

[Bitcoin Swami]

The rating agencies are regulated by the USA government. The USA government will never loose the AAA rating by these agencies.

Yes it seems these agencies were the same ones giving AAA ratings to home loans when they were crap.

[bitrebel]

The US has already defaulted.

I second that.

Ron Paul is one of the ones saying this.

We have been bankrupt since 1933, so what does one more default matter?

Does anyone have a deckchair that can fly overboard or sink?
Now is the time you may want to paint it, polish it, decorate it, and nail it down.

[Oldminer]

America may have won the war of Independence but were quickly invaded again by stealth via the Fed money system that has its roots in the UK banking system. As a result, the US is simply a 'corporation' of the UK and most Americans dont even realise it. Quite ingenious really.

[Seraphim401]

America may have won the war of Independence but were quickly invaded again by stealth via the Fed money system that has its roots in the UK banking system. As a result, the US is simply a 'corporation' of the UK and most Americans dont even realise it. Quite ingenious really.

Nice to be on a forum where people understand that.I myself woke up that fact only about a year ago.
 

[CurbsideProphet]

America may have won the war of Independence but were quickly invaded again by stealth via the Fed money system that has its roots in the UK banking system. As a result, the US is simply a 'corporation' of the UK and most Americans dont even realise it. Quite ingenious really.

What is the alternative though?  Yes, the spending has gotten out of hand but if you're really going to attack the root of the system, there needs to be a viable alternative.  Can you name a single successful economy that doesn't use fractional reserve banking?

[Oldminer]

The Federal Reserve creates money out of nothing.  It is a four step process:

1. The Federal Open Market Committee approves the purchase of United States Bonds.
2. The bonds are purchased by the Federal Reserve.
3. The Federal Reserve pays for these bonds with electronic credits to the seller's bank, these credits are based on nothing.
4. The banks use these deposits as reserves.  They can loan out over ten times the amount of their reserves to new borrowers, all at interest.

It's a house of cards..

http://www.iamthewitness.com/DarylBradfordSmith_Bankers.htm

[CurbsideProphet]

The Federal Reserve creates money out of nothing.  It is a four step process:

1. The Federal Open Market Committee approves the purchase of United States Bonds.
2. The bonds are purchased by the Federal Reserve.
3. The Federal Reserve pays for these bonds with electronic credits to the seller's bank, these credits are based on nothing.
4. The banks use these deposits as reserves.  They can loan out over ten times the amount of their reserves to new borrowers, all at interest.

It's a house of cards..

http://www.iamthewitness.com/DarylBradfordSmith_Bankers.htm

Yes, what you've described is fractional-reserve banking.  I'm aware of how the system works.  I'm asking you what is your proposal for an alternative.  Even Islamic banking, which prohibits profit from interest, has aspects of fractional-reserve banking.  So I ask again, can you provide an example of a current successful economy/country that does not employ fractional-reserve banking?

Please don't construe this is an attack.  To my knowledge there are none but I recognize the fact that I can (and often times am) wrong.  What I see is a system that has been corrupted and needs to be repaired.  I don't necessarily see the need to throw the baby out with the bath water.

[kloinko1n]

America may have won the war of Independence but were quickly invaded again by stealth via the Fed money system that has its roots in the UK banking system. As a result, the US is simply a 'corporation' of the UK and most Americans dont even realise it. Quite ingenious really.

What is the alternative though?  Yes, the spending has gotten out of hand but if you're really going to attack the root of the system, there needs to be a viable alternative.  Can you name a single successful economy that doesn't use fractional reserve banking?

'Fractional Reserve Banking' isn't synonymous with 'Federal Reserve Banking', although it abbreviates the same.
The 'state', be it federal or not, is quite able to do the fractional banking all by herself and earn a lot of money in the process, which can be used for useful public works, instead of building up debts with private banks.
In fact, the American Constitution gives 'the congress' (i.e. NOT the private Federal Reserve) the sole right to create money.

[Oldminer]

Yes, what you've described is fractional-reserve banking.  I'm aware of how the system works.  I'm asking you what is your proposal for an alternative.  Even Islamic banking, which prohibits profit from interest, has aspects of fractional-reserve banking.  So I ask again, can you provide an example of a current successful economy/country that does not employ fractional-reserve banking?

Please don't construe this is an attack.  To my knowledge there are none but I recognize the fact that I can (and often times am) wrong.  What I see is a system that has been corrupted and needs to be repaired.  I don't necessarily see the need to throw the baby out with the bath water.

Sorry, I took a while with my last post which wasn't in response to your post

However, in response to your question - I don't know of one. To find one you would need to find a (successful) economic system that isnt tainted by the UK banking monopolists. And last time I looked, there wasn't a corner of the globe thats free of their tentacles. In other words, if there was a viable alternative its since been 'colonised' & corrupted.

[CurbsideProphet]

America may have won the war of Independence but were quickly invaded again by stealth via the Fed money system that has its roots in the UK banking system. As a result, the US is simply a 'corporation' of the UK and most Americans dont even realise it. Quite ingenious really.

What is the alternative though?  Yes, the spending has gotten out of hand but if you're really going to attack the root of the system, there needs to be a viable alternative.  Can you name a single successful economy that doesn't use fractional reserve banking?

'Fractional Reserve Banking' isn't synonymous with 'Federal Reserve Banking', although it abbreviates the same.
The 'state', be it federal or not, is quite able to do the fractional banking all by herself and earn a lot of money in the process, which can be used for useful public works, instead of building up debts with private banks.
In fact, the American Constitution gives 'the congress' (i.e. NOT the private Federal Reserve) the sole right to create money.

Okay now we're getting somewhere.  Let me first just say, if you look at Oldminer's four step process, the last step (#4) is fractional-reserve banking.  

The Federal Reserve is for lack of a better word, a cartel of banks.  I believe what you are advocating (correct me if I'm wrong) is to take away the power from the Fed and return it to Congress?  Let me know if I'm hot or cold here.  I'm all for more controls over the Fed, as I mentioned in my previous post, the system is in disarray and needs to be repaired.  I just don't necessarily believe we need to scrub the whole model and start over.

[CurbsideProphet]

Yes, what you've described is fractional-reserve banking.  I'm aware of how the system works.  I'm asking you what is your proposal for an alternative.  Even Islamic banking, which prohibits profit from interest, has aspects of fractional-reserve banking.  So I ask again, can you provide an example of a current successful economy/country that does not employ fractional-reserve banking?

Please don't construe this is an attack.  To my knowledge there are none but I recognize the fact that I can (and often times am) wrong.  What I see is a system that has been corrupted and needs to be repaired.  I don't necessarily see the need to throw the baby out with the bath water.

Sorry, I took a while with my last post which wasn't in response to your post

However, in response to your question - I don't know of one. To find one you would need to find a (successful) economic system that isnt tainted by the UK banking monopolists. And last time I looked, there wasn't a corner of the globe thats free of their tentacles. In other words, if there was a viable alternative its since been 'colonised' & corrupted.

Ah, sorry I thought you were responding to me.

[hugolp]

America may have won the war of Independence but were quickly invaded again by stealth via the Fed money system that has its roots in the UK banking system. As a result, the US is simply a 'corporation' of the UK and most Americans dont even realise it. Quite ingenious really.

What is the alternative though?  Yes, the spending has gotten out of hand but if you're really going to attack the root of the system, there needs to be a viable alternative.  Can you name a single successful economy that doesn't use fractional reserve banking?

The problem is not fractional reserve. Fractional reserve is fine. The problem is central banking. You dont need to have a money monopolly regulated by a central bank, people can freely choose the money they want.

[Oldminer]

I believe what you are advocating (correct me if I'm wrong) is to take away the power from the Fed and return it to Congress?  

Lincoln and JFK tried this and both were assassinated as a direct result. Though I do believe their models are the only one's that are actually workable.

[iamzill]

America may have won the war of Independence but were quickly invaded again by stealth via the Fed money system that has its roots in the UK banking system. As a result, the US is simply a 'corporation' of the UK and most Americans dont even realise it. Quite ingenious really.

What is the alternative though?  Yes, the spending has gotten out of hand but if you're really going to attack the root of the system, there needs to be a viable alternative.  Can you name a single successful economy that doesn't use fractional reserve banking?

The problem is not fractional reserve. Fractional reserve is fine. The problem is central banking. You dont need to have a money monopolly regulated by a central bank, people can freely choose the money they want.

While I agree with your sentiments, I don't think this model can apply to US unless a constitutional amendment is passed.

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

Only Congress has the power to regulate the money supply, and Congress so far has only issued one type of currency: the USD. So the people is faced with a Hobson's choice. (Technically the American Gold Eagle is also legal tender but the $5 coin is actually worth $150...)

I fully support the idea of private currency though. The first time I used an ATM in Hong Kong 4 different shades of plastic bills popped out. I thought I was scammed with monopoly money at first. As it turns out each bank issue their own set of notes. All the private banks work together to regulate the HongKong dollar. Now that's free market at work. Since none of the locals carry around counterfeit bill detectors I assume they have no problem identifying and trusting 20+ different types of bills. None of the HK banks got a bail out either.

[DrKennethNoisewater]

I believe what you are advocating (correct me if I'm wrong) is to take away the power from the Fed and return it to Congress?  

Lincoln and JFK tried this and both were assassinated as a direct result. Though I do believe their models are the only one's that are actually workable.

Agreed.

Watch as the USD slowly gets hammered.

Keep in mind, while you're not looking, you're 8oz bottle of ketchup that you buy every month has now become a 6oz bottle @ the same price...........

[Phinnaeus Gage]

Very interesting discussion we have going on here. I'm opted to stay out of it because my comment(s) may not add value. Thank you kindly to all the posters so far. Keep up the discussion.

[airdata]

I hope they placed the bet or however they wish to call it in USD.  That would just be hilarious.

[Phinnaeus Gage]

Any one here care to guess who made such a bet? ...or the source of the inside information?

[hugolp]

I believe what you are advocating (correct me if I'm wrong) is to take away the power from the Fed and return it to Congress?  

Lincoln and JFK tried this and both were assassinated as a direct result. Though I do believe their models are the only one's that are actually workable.

If we have to be historically accurate thats false.

JFK passed a bill to emit silver certificates, he did not pass a bill allowing congress to print as much as they want to, and it is quite unclear the silver certificates was the reason why he was assesinated. I guess it could be, there are several theories as to why he was killed.

Lincoln did print "all" the dollars he wanted, but the dollar hyperinflated and lost 50$% of its value in 2 or 4 years (dont remember exactly right now). If it were not because congress decided to stop printing which returned confidence in the currency, the dollar would have completely collapsed. Again, there are several theories as to why Lincoln was assesinated but saying its because of the greenbacks its quite a strecth. It does not make too much sense.

[The_JMiner]

Keep in mind, while you're not looking, you're 8oz bottle of ketchup that you buy every month has now become a 6oz bottle @ the same price...........

Exactly , they know they can not raise prices (duh scare the people) so they lower the quantity! Mind boggling to say the least.

[Phinnaeus Gage]

Keep in mind, while you're not looking, you're 8oz bottle of ketchup that you buy every month has now become a 6oz bottle @ the same price...........

Exactly , they know they can not raise prices (duh scare the people) so they lower the quantity! Mind boggling to say the least.

Wait till the day they start selling individual .25oz packets of ketchup at todays 8oz 6oz prices. And the package will cost more to make than the ketchup inside.

Honey, what do you want me to get at Walmart since I'm going there to this cavity filled? Have you seen my ObamaCare card?

One package of generic ketchup, two small eggs, 4 slices of their day old bread, and 3oz of 1% milk. Here's the online coupon for the ketchup and the container to put the milk in. Make sure you don't buy anything else. Remember, we're on a budget. Check the bicycle basket glove box for your card. I think I saw it there when I went dumpster diving an hour ago. While you're gone, I'll get the landlord to fix the leak in this tent. And remember to not make any eye contact with Homeland Security.

Bitcoin: Don't Wait till Things get Bad

[DrKennethNoisewater]

I find it interesting that the whole time I've been involved with Bitcoin, mining of Bitcoin, and lurking (sometimes posting) on this forum, that no one has ever mentioned the book "Daemon" and it's sequel "Freedom TM"

There are some very cool parallels...........

Any1? Bueller?

[Phinnaeus Gage]

I find it interesting that the whole time I've been involved with Bitcoin, mining of Bitcoin, and lurking (sometimes posting) on this forum, that no one has ever mentioned the book "Daemon" and it's sequel "Freedom TM"

There are some very cool parallels...........

Any1? Bueller?

From Amazon http://www.amazon.com/Daemon-Daniel-Suarez/dp/0525951113

Robin Cook on Daemon

Doctor and author Robin Cook is widely credited with introducing the word "medical" to the thriller genre. Thirty-one years after the publication of his breakthrough novel, Coma, he continues to dominate the category he created, including his most recent bestseller, Foreign Body, which explores a growing trend of medical tourism--first-world citizens traveling to third-world countries for 21st-century surgery.

Daemon is an ambitious novel, which sets out not only to entertain, which it surely does, but also to challenge the reader to consider social issues as broad as the implications of living in a technologically advanced world and whether democracy can survive in such a world.

The storyline portrays one possible world consequent to the development of the technological innovations that we currently live with and the reality that the author, Suarez, imagines will evolve, and it is chilling and tense (on www.thedaemon.com the reader can find evidence that the seemingly incredible advances Suarez proposes could in fact become real). Daemon is filled with multiple scenes involving power displays by the Daemon's allies resulting in complete loss of control by its enemies, violence with new and innovative weaponry, explosions, car crashes, blood, guts, and limbs-cut-off galore.

As far as computer complexity, Daemon will satisfy any computer geek's thirst. I was thankful for Pete Sebeck, the detective in the book whose average-person understanding of computers necessitates an occasional explanation about what is going on. I came away from the novel with a new understanding, respect, and fear of computer capability.

In the end, Suarez invites the reader to enter the "second age of reason," to think about where recent and imminent advances in computer technology are taking us and whether we want to go there. For me, it is this "thinking" aspect of the novel which makes it a particularly fun, satisfying, and significant read.

[DrKennethNoisewater]

And, A Darknet economy evolves in which "DarkNetCredits" quickly out pace the USD...........

[kloinko1n]

America may have won the war of Independence but were quickly invaded again by stealth via the Fed money system that has its roots in the UK banking system. As a result, the US is simply a 'corporation' of the UK and most Americans dont even realise it. Quite ingenious really.

What is the alternative though?  Yes, the spending has gotten out of hand but if you're really going to attack the root of the system, there needs to be a viable alternative.  Can you name a single successful economy that doesn't use fractional reserve banking?

'Fractional Reserve Banking' isn't synonymous with 'Federal Reserve Banking', although it abbreviates the same.
The 'state', be it federal or not, is quite able to do the fractional banking all by herself and earn a lot of money in the process, which can be used for useful public works, instead of building up debts with private banks.
In fact, the American Constitution gives 'the congress' (i.e. NOT the private Federal Reserve) the sole right to create money.

Okay now we're getting somewhere.  Let me first just say, if you look at Oldminer's four step process, the last step (#4) is fractional-reserve banking.  

The Federal Reserve is for lack of a better word, a cartel of banks.  I believe what you are advocating (correct me if I'm wrong) is to take away the power from the Fed and return it to Congress?  Let me know if I'm hot or cold here.  I'm all for more controls over the Fed, as I mentioned in my previous post, the system is in disarray and needs to be repaired.  I just don't necessarily believe we need to scrub the whole model and start over.

Yes, of course men should take away the power from the Fed and at least (re?)turn it to congress.
The constitution of the USA only grants the right of creating money to the congress, and not to a bunch of banksters whose only goal is to make money out of states, be it through the right of printing money or through the proceeds of war.

In my opinion 'we' should 'scrub the whole model' and return to a sane model where by default states don't borrow money, nor print unlimited amounts of it. 'Printing' is allowed, but only to accommodate the production of services and goods and a proper flow of money.
Currencies should be backed by valuable items, like for instance silver, gold, platinum or whatever deemed valuable enough. Uranium?

[GideonGono]

I don't think "returning" to the constitution as it pertains to Congress "coining money and regulating the value thereof" is a viable solution. It failed to stop the rise of central banking when it was first tried. What makes you think things will be any different this time? I think the whole concept of monopoly money should be relegated to the dustbin of history entirely.

[netrin]

Lincoln and JFK tried this and both were assassinated as a direct result. Though I do believe their models are the only one's that are actually workable.

Clearly the SS risks/ed their lives to protect these, other presidents, their families, and diplomats. But isn't it odd that the only responsibilities of the Secret Service are to protect politicians and the physical currency? As if the mission were to keep these two institutions in line.

"Psst... Mr. President, just a reminder, so we're clear about a few things..."

[kloinko1n]

I don't think "returning" to the constitution as it pertains to Congress "coining money and regulating the value thereof" is a viable solution. It failed to stop the rise of central banking when it was first tried. What makes you think things will be any different this time? I think the whole concept of monopoly money should be relegated to the dustbin of history entirely.

I think what failed to stop the central banking was congress itself by letting themselves be corrupted by the banks to vote on the deal on x-mas eve when majority is unavailable for voting.
And then the president signing the federal reserve law.

[netrin]

http://etfdailynews.com/2011/07/25/investors-the-1-billion-armageddon-trade-placed-against-the-united-states/

Can someone please explain the gist of a futures trade. Some dude predicts the AAA rating will go down, which will force the US govt to pay higher rates (or not at all?)... then...the trader promised what?

[GideonGono]

I don't think "returning" to the constitution as it pertains to Congress "coining money and regulating the value thereof" is a viable solution. It failed to stop the rise of central banking when it was first tried. What makes you think things will be any different this time? I think the whole concept of monopoly money should be relegated to the dustbin of history entirely.

I think what failed to stop the central banking was congress itself by letting themselves be corrupted by the banks to vote on the deal on x-mas eve when majority is unavailable for voting.
And then the president signing the federal reserve law.

What is to stop this from happening again?

[TheGer]

First.  Put the Glass-Steagall Act back in place.

The repeal of provisions of the Glass–Steagall Act of 1933 by the Gramm–Leach–Bliley Act effectively removed the separation that previously existed between investment banking which issued securities and commercial banks which accepted deposits. The deregulation also removed conflict of interest prohibitions between investment bankers serving as officers of commercial banks. Experts believe that this repeal directly contributed to the severity of the Financial crisis of 2007–2011 by allowing Wall Street investment banking firms to gamble with their depositors' money that was held in commercial banks owned or created by the investment firms

America may have won the war of Independence but were quickly invaded again by stealth via the Fed money system that has its roots in the UK banking system. As a result, the US is simply a 'corporation' of the UK and most Americans dont even realise it. Quite ingenious really.

What is the alternative though?  Yes, the spending has gotten out of hand but if you're really going to attack the root of the system, there needs to be a viable alternative.  Can you name a single successful economy that doesn't use fractional reserve banking?