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Wall Street's Next Big Problem

Business  (tags: AIG, American International Group, Federal Reserve System, Lehman, Wall Street, Finances, Banks and Banking, Mortgages, Insurance )

- 3934 days ago -
Wall Street isn't remotely prepared for the inestimable damage the financial system would suffer if A.I.G. collapsed.


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Marion Y (322)
Tuesday September 16, 2008, 5:25 am
It is unbelievable and unforgivable what BushCo and the Fed have done to our economy. The dominoes are falling and the Fed cannot continue to bailout these organizations. They (we) just don't have the money.

"If A.I.G. collapsed, its hundreds of billions of dollars of mortgage-related assets would be added to those being sold by other financial institutions. This would just depress values further. The counterparties around the world to A.I.G.’s credit default swaps may be unable to collect on their trades. As a large hedge-fund investor, A.I.G. would suddenly become a large redeemer from hedge funds, forcing fund managers to sell positions and probably driving down prices in the world’s financial markets. More failures, particularly of hedge funds, could follow. There's no precedent for the Fed to extend assistance to an insurance company, but these are unusual times.

Its collapse would be as close to an extinction-level event as the financial markets have seen since the Great Depression."

Hans L (958)
Tuesday September 16, 2008, 6:12 am
Who has burned all these billions? We are talking about hundreds of billions who knows even trillions in the end..... thats what is at risk.....

Raja G (142)
Tuesday September 16, 2008, 6:43 am
This is a cyclic reaction of overdraft economy. Fed Reserve is the Golden Goose. The US citizen are the sacrificial Goats. The dollar centric economis of the world are the Dominos. The Market Mafia will make Keynesian theory the scape Goat

Ken S (38)
Tuesday September 16, 2008, 6:53 am
This IS NOT good news.....if this sort of disaster keeps on occurring, will this be enough for the government to break the corrupt stranglehold that the Fed (a private company) has on the US monetary system.???? Will this end fractional reserve banking???It would take the courage of the founding fathers.... .unfortunately we only appear to have political forces interested in preserving their own position, and the interests of those who cause the problem.Greed and corruption appears to be accepted and normal in political circles these days... If they say we get the government we deserve......where does that leave us.????? But why do people vote for these polititions????? Is this the thin edge of something coming, that resembles a bad horror movie?? ........or are there other more sinister motives???

laurel w (207)
Tuesday September 16, 2008, 7:32 am
The Federal Reserve system is illegal. We were warned in 1913 when it began that the children in the future would end up homeless. Graduated income tax is illegal---the Uniform Commercial Code is illegal. We have got to go back to the US govt. minting money, not a "Fed" that is a private monopoly!

. (0)
Tuesday September 16, 2008, 8:03 am
The U.S. Government is flooding another 50 billion dollars into the financial system -- throwing money at the problem!?
Everyone is invited to read my personal world-economic views, at the following link:

Joycey B (750)
Tuesday September 16, 2008, 8:14 am
This country crumbles more everyday. Thanks Marion.

Marion Y (322)
Tuesday September 16, 2008, 8:28 am
Hans...this government is not accountable. Books are cooked, money diverted, the Treasury robbed and we are standing with empty pockets with all this money not being rightly used for this country. This is no accident. The power players behind BushCo (Rothschild, Rockefeller Empires and others) control us and their agenda is global domination. I think BushCo and the corrupt Fed and other cronies get the rewards of this money for their efforts to carry out the power players' agenda. In many cases, there may be a free-for-all with the money in any given jurisdiction.

Raja...Thanks for narrow down what is wrong with our overdraft economy. It was doomed to fail because it was never backed by real gold or monetary system.

Ken...I think the government and Feds are in cahoots, so they have no desire to end the money train they have run on us. We must eliminate the Federal Reserve and revamp our entire system governing this nation.

Laurel...I agree, we must abolish this illegal system. In 1913, the same bankers we wanted to protect America from, are the very same people who sneaked in the Federal Reserve System on us, and have continued raping us ever since.

Robert...Excellent analysis! The big picture does not look good. It is imperative we elect a leader who can and will negotiate and talk with these countries whose fuse BushCo has lit. America is in a critical state and we must set aside our arrogance, egos and ignorance rather quickly to vote in the right people to keep America from going under, and avoid our own demise.

Thank you all for excellent input and questions!


Past Member (0)
Tuesday September 16, 2008, 9:00 am
Noted. Raja hit the nail on the head for sure.

Nevaeh M (75)
Tuesday September 16, 2008, 9:02 am
This is very devastating! huge banks are worrying about whos going to rescue them, Well who is going to rescue 1,500 workers.Lehman Brothers plans to lay off 1,500
Lehman Brothers, the ailing Wall Street bank, plans to lay off as many as 1,500 employees, or nearly 6 percent of its work force, before it announces third-quarter results on Sept. 15, a person briefed on the plans said Thursday.
Lehman has already laid off 6,000 people since June 2007, mostly in its mortgage origination and securitization businesses. It was not immediately clear what divisions would bear the brunt of the new cuts, but virtually every Wall Street business is struggling, and investment bankers and traders at Lehman are anticipating cuts.A Lehman spokesman declined to comment! He has his nerve not to even show sorry for the employee's who put there life in there hands, they have lost every thing they put in this company, stocks gone, social security gone, I watch as there employee's pack up cleaning out there desks only to know they are out of a job ,wondering is this real ? many tearful. I was tearful with them.1,500 plus 6,000 the devastating totle is 7,500 families in shock .This is the
tip of the iceberg . very sad!

Nevaeh M (75)
Tuesday September 16, 2008, 9:30 am
economic repercussions will be felt throughout the world, Unlike past downturns, this will not just be a period of cutbacks,worst is yet to come. Between now and the end of the year. It is going to be enormous !And those who are currently, or are about to be, out of a job are facing the bleakest employment conditions.It's like a game of musical chairs with too many people chasing the jobs that are left, I know i pray always. please lets even pray harder for the whole world .im going to church to light a candle and pray please find time to do the same .

Nevaeh M (75)
Tuesday September 16, 2008, 9:33 am
GREED! where dose it get any one? this is why the world is where it is ! please take time and read this. thank you.Greed is excessive or reprehensible acquisitiveness. The Bible makes it clear that greed is a sin. In Isaiah 57:17 God said that he was enraged by the greed of mankind. Jesus accused the Pharisees of greed and condemned them for it (Matt. 23:25). Our Lord again warned us against greed (Luke 12:15). He next said that greed is one of the sinful things that come out of our hearts (Mark 7:20-23). Because it is so pervasive among mankind, it is obviously part of our human nature. Interestingly, Paul agreed with this and further likened greed to idolatry (Col. 3:5), a matter that God sternly warned against. Finally covetousness, a problem that arises out of greed, is included among the Ten Commandments. To be on that list makes it of special importance, for when Jesus said that we cannot worship God and money (Matt. 6:24), he obviously knew that greed could destroy us.


Pete Conrads (91)
Tuesday September 16, 2008, 9:40 am
Sadly noted Marion, This on the aftermath of Ike through Ohio (where I am from) and through the rest of the country.....

Marian E (152)
Tuesday September 16, 2008, 10:08 am

If we immediately pulled all U.S. troops out of Afghanistan and Iraq, the money NOT
spent on making war would be enough to bail our asses out. We won't do that though, for some reason as a nation, we still think war is good for business. The current plans
are more wars to stimulate the economy. ( You thought is was about oil? Only so far as
the payment demands are not being made in U.S. dollars. If Iran changed from the Euro
to the U.S. dollar as the only payment accepted for oil, they would become our best buds.)

Thank you Marion.

Past Member (0)
Tuesday September 16, 2008, 10:22 am
Noted and thanks Marion !
I began preparing last year ! I told people things were going to get bad in this country but many of them laughed at me or said it couldn't happen .Now we are seeing it can happen and its well on its way to getting worse.

Another thing nobody mentioned here is the trillions of dollars in loans the Bush administration borrowed from China and Japan to fund his wars along with our taxes of course .China's market was down yesterday and I would suppose Japan's also .Now what if they both decided to save themselves they would call in these loans ? We can't pay those loans we are already over extended with these god foresaking wars .Effectively China and Japan would own us .Our sovereignty is at stake here and don't be surprised if Bush tries to coonvince the American people that our only chance for survival is to join with Canada and Mexico .Bush wanted this a long time ago but both Canadians and American's were against it .Whose to say Bush didn't deliberately manipulate the market so he could pull off his plan.Call me paranoid if you will but Bush has done as much to take us into these two wars so what makes anyone think he wouldn't pull off another shadowy deal.

Past Member (0)
Tuesday September 16, 2008, 10:29 am
When I say Bush I don't mean just Bush I mean those behind this administration who have been controling everything for years !
Why would Bush and these people hold so many secret meetings with the Candian Primere and Mexico's President if they didn't have a plan to pull this thing off ? Bush's term is almost over and I think he has a big surprise in store for the American people ! I honestly don't think Bush and Cheney will just ride off into the sunset come January !
I am hoping the ride off to prison but I doubt that is going to happen.

Jim Phillips (3247)
Tuesday September 16, 2008, 10:39 am
The Sky is Falling... The Sky is Falling...
The dominoes are falling... The dominoes are falling...
the collapse is coming...

TY, Marion.


. (0)
Tuesday September 16, 2008, 11:51 am
so depressing any good news?

serge vrabec (278)
Tuesday September 16, 2008, 11:58 am
I'm glad that many know that "money" does not exist, just blips on the screens. The Economy, ha, I call it the main control Board, I, for one will be relieved when it falls, with minimal human suffering of course. So we can get with the new stuff. Be nice to your neighbor, stay aware, Be Prepared folks. Thx Marion.

"It only Rock and Roll but i like it"- Rolling Stones

Christine Mitchell (66)
Tuesday September 16, 2008, 12:38 pm
for years people have been living way above their means on plastic and now, as that irreverant rev wright said... the chickens are coming home to roost... in more ways than one... sad but true...:(

Tim Redfern (581)
Tuesday September 16, 2008, 12:45 pm
This is all a warning, everything that's
happening now, Lehman Bros., AIG, Freddie
and Fannie, etc.
We've got a front-row seat to the collapse
of the economy. Right NOW is the time to
If you live in a city, GET OUT!, if you
possibly can. Get to a small town, someplace
rural in a very out-of-the-way place. The big
population centers will be the WORST places to
be when the lid slams down.
Also, kill your TV! It's a Weapon of Mass Distraction,
spewing lies and poison!

Thanks for an important post, Marion.

Nevaeh M (75)
Tuesday September 16, 2008, 12:49 pm
Government 'help' to business is just as disastrous as government persecution... the only way a government can be of service to national prosperity is by keeping its hands off .

Nevaeh M (75)
Tuesday September 16, 2008, 1:08 pm
A corporation's primary goal is to make money. Government's primary role is to take a big chunk of that money and keep it.

Marion Y (322)
Tuesday September 16, 2008, 1:09 pm
Neveah...Just like the workers, it looks like many of the banks won't get bailed out either, and Americans will still be held holding an empty bag:

Run On The Bank? Americans Could Lose Their Deposits - this article says "although the Federal Deposit Insurance Corp. guarantees individual accounts up to $100,000, the FDIC fund only has about $50 billion to “insure” about $1 trillion in assets across the nation’s financial institutions. When Americans realize the fact that banks are “going to run out of money”, the article nonchalantly states, a run on the banks will accelerate."

"“In reality, I don’t want to cause a run on the banks; but, I won’t prevent one by saying that everything is fine and that you should wait until it is too late. My recommendation: Move your important savings and checking accounts to banks that have a higher likelihood of weathering the storm,” he adds."

Bank of America is not one of them.

Marion Y (322)
Tuesday September 16, 2008, 1:26 pm
Pete...I hope you're all right. When you go through a disaster, news like this weighs even heavier.

Marian...Pull out of Iraq? Why isn't Congress raising this question instead of you? If we can come up with solutions, why are they running the country? We need to fire them all and take their place!

Linda...Everything you said...I read somewhere Bush may call off the election. Is this the October Surprise?

Serge...I hope folks are listening to nice to neighbors...stay aware.

Christine...Yes, we must change our thinking and come to grips with reality. Whether we like the messenger or not, Rev. Wright was right.

Tim...You know how to ride into town at the last minute to let us know we are on our own, then ride out as fast as you came, with smoke trailing you.

Great contributions, my friends.

Nevaeh M (75)
Tuesday September 16, 2008, 1:27 pm
Power x Stupidity = Self-destruction, Democracy = Dictatorship of dull Majorities "Nothing but a silent Cry ,Cold war still going on - now being a War of Systems" etc.
The ones and only ignoramuses around GW Bush, who are responsible for the U.S. Downfall of economics, hitting all banks, your savings, stock exchanges of the world, pretending to be THE CURE of their criminal deeds, initiated by Greenspan, Friedman and Wolfowitz-Sachs, when in fact they prepared the final BANKRUPTCY of our economic world-systems, of CAPITALISM.
What a pretension of zero-numbers! Let's go and bring before a Human-rights Court the criminals who are responsible that now the economics of the whole world will soon tumble to hell, destroying for millions of people their savings, without recourse, because the sins of the past can never again be cured, the huge towers of indebtedness never be worked down, especially with those lessened income-taxes for the richest Skunk-VIPs, and the prices for resources and energy will make sure that whatever the diverse FED in this world will do, will prove to have been contra-productive.This criminal Crook-State, USA. GOD BLESS AMERICA !.

Lucien Pan Morningstar (217)
Tuesday September 16, 2008, 1:33 pm
classic putting the greedy wolves (my apologies to actual lupines/canines )in charge of the proverbial hen house.. massive deregulation of of securities &on top of that ( the odds on fave to be mcsame's sec'y of the treasury and primary designer of mccain's economic plan, phil gramm,( aka mr mental recession )), as one of his last acts as a senator & chair of the senate finance com., pushed thru a bill that made it possible and legal to make a security of a security thyat was made from bundled debt ie made possible the esoteric securities that are a big part of the present troubles and massively de-reg'd the financial markets in general...this next part may not solve it but it might help if your in favor of getting ridd of the fed vote paul, barr ,or nader ,, if" the fed" is not an issue vote gravel, mckinny ,or obama... dont trust one pack of proverbial wolves to regulate the communal hen hopusew

Marion Y (322)
Tuesday September 16, 2008, 1:42 pm
Lucien...Thanks for the reminder about Gramm. Lots of wolves in the McCain group who played a part in creating this mess. And thanks for the candidate breakdown. Nice.

Just came across this article worth reading:

Let the bank runs begin! The gist of this article is that nothing can stop the bank runs now.

"American sentiment is rapidly changing: Six thousand banks is a long way to go!

When chickens discover a blemish on an otherwise healthy chicken, they will immediately attack it and peck it to death.

The global financial market players are just as merciless."

Tim Redfern (581)
Tuesday September 16, 2008, 2:24 pm
Marion, just consider me the Paul Revere
of Care2, thank you. Or consider me the Freak
on the street corner, wearing the Moses-robe
and the long beard, carrying the sign that says,
"The End is Near!".
But, to clarify something you said, my friend;
If you stay in the cities, you really will be on
your own, simply because of the big-city mentality.
It isn't that way in small towns and rural areas.
I'm a native of Los Angeles, where I lived until
I moved to Tennessee in 1995. I know both sides of
this too well.
No kidding, folks, if there's any way you can get
out of the metro areas and re-locate to the country,
somewhere, ANYwhere, do it NOW!, do it LAST WEEK!!
The cities will soon be no place to be.

Tim Redfern (581)
Tuesday September 16, 2008, 2:25 pm
btw, that's marijuana smoke trailing me.

. (0)
Tuesday September 16, 2008, 2:40 pm
FDIC guaranteed! Isn't it nice to know the government promises 'to hold' our money for us, for an indefinite period of time, while we would go hungry! For how long -- nobody knows (1-3 years)? And for those who bought into the 'gold-rush' for protection -- I repeat -- the government may repeat it's out-law of gold transactions, in order to stabilize a currency recovery!!! Keep a 'cash' supply on hand (for exchange 'script money' if necessary), and invest in personal survival items: freezed dried foods...Maybe it's time to browse the bookstore or Online for a survival guide -- just in case!

Marion Y (322)
Tuesday September 16, 2008, 3:29 pm
Tim...Solid advice to leave the cities. Here's a link to break down survival during economic decline.

"btw, that's marijuana smoke trailing me."

Uh-huh...I kind of figured that LOL! Glad it didn't slow you down getting the message out...

And glad to have you back from vacation!

Marion Y (322)
Tuesday September 16, 2008, 3:34 pm
Robert...So true on the gold transactions. What is 'script money?'

AWAY AWHILE Cal Mendelsohn (1065)
Tuesday September 16, 2008, 3:35 pm
Awesome article Marion, and its time to stop propping everything up with funny money.

Blue Bunting (855)
Tuesday September 16, 2008, 3:45 pm
If A.I.G. collapses, all the deals are off the table; no papers have been signed and BofA will back out of the deal to buy Merrill Lynch; why should it buy Merrill at $50, when it could buy it for $5 or $2 or $.25/share???

People, be advised that THIS IS ALLPAPER .. there's no money behind this ... everything is unravelling.

. (0)
Tuesday September 16, 2008, 4:17 pm
'Script' money: During the Great Depression, the U.S. minted dollar bills became zero in gold-standard to currency value. Cash money became absolutely useless. No one would except this worthless paper, so the government printed a color-number coded 'script' and claimed it was leading to a new currency value, and it was. This is where they out-lawed the gold transactions, to stabilize the economic balance, to then print and issue the new officially minted monetary dollar bills. Script money was an act of faith in the future ressurection of the U.S. economy, it actually had no seperate value than the collapsed dollar bill! In essence it was a mental illusion of faith in a different color paper.
Hey Marion; Can you send me a Url link for 'Hard Times' where you saw a reference to:

. (0)
Tuesday September 16, 2008, 4:24 pm
P.S.: People had to take wheel-barrows of 'old' currency cash money, and trade it in for the new fake script money. Those who had 'cash on hand' were able to then buy (with traded script) the meagre affordable necessities of survival for food & clothing & maybe toward shelter.

Marion Y (322)
Tuesday September 16, 2008, 4:41 pm
Robert...Thanks for the description. I looked for 'script money' but found nothing but web design jargon. I will email you about 'Hard Times'. I couldn't find your reference so will get more info from you.

About the financial bailouts...

Martin Hennecke, senior manager of private clients at Tyche, told CNBC on Thursday, "We expect a depression in the United States. We expect a depression, very possibly, also in Europe," Hennecke said on "Worldwide Exchange."


Marion Y (322)
Tuesday September 16, 2008, 5:03 pm
Cal and Blue...Hard to believe, but true. We may as well be playing with Monopoly money. I looked it up to figure out what you two are talking about. Here's an article that lays out Money 101 in simple terms even I understand:

Past Member (0)
Tuesday September 16, 2008, 6:25 pm
Marion I don't know if that will be the October surprise I see it more like happening just before we are suppose to put in a new President in January or just before the November elections.Even if we do have an election and there aren't any surprises we will be in for some rough times ahead and it will take years before we come out of it .Hopefully we will have a President with a brain and a heart ( Obama ) who can do what needs to be done intelligently and swiftly as possible.

The question that Mariann brought up about ending the war brings up more questions like why hasn't Congress acted on this in the event that our economy is so bad to save us trillions of dollars .Could it be that as I said this fallen economy was a planned event ?

I started stocking up on goods last year and kept a little money aside for gas etc. just in case I need to relocate to my oldest sons place in another state out in the country on 40 acres of land where we can become some what self sufficient .I live in a small city so I don't expect that there will be the problems you will see in the larger cities .
The problem is I have two grown children and grandchildren here that don't think this could happen and I don't want to leave until I know they have become aware and possibly would leave with me.

Cal and Blue are right the money has nothing behind it to back it so it is actually worthless.
I use a Credit Union because I think they are more sound than banks but I know they too will eventual collapse as well ,I am just hoping my children will wake up before that happens.

One thing that I have to admit scares me is the lack of money to buy anything including fuel .I sure hope my oldest son knows where to get a wood burning stove because its awfully cold up there in the winter time :(

Past Member (0)
Tuesday September 16, 2008, 6:30 pm
My mother lived through the depression and what she told us girls wasn't a pretty picture !

Serge things will change but what scares me is how will they change .Will we still be a country or will we lose our sovereignty ?Will we have declared marshal law under Bush/Cheney or will we have Obama as president or god forbid McCain ?
I am not going to panic I will take a wait and see approach to all of this and then I will act or not depending on the outcome.

Nevaeh M (75)
Tuesday September 16, 2008, 6:53 pm
Thanks Robert, I've never heard about scrip money, very interesting , i just had a discussion about this with my husband. he said he can remember his grandmother talking about this back in the depression days. so i had to become Nevaeh PI lol. this is what i found,Scrip
Scrip is any substitute for currency which is not legal tender and is often a form of credit. Scrips were created as company payment of employees and also as a means of payment in times where regular money is unavailable, such as remote coal towns or occupied countries in war time. Other forms of scrip include subway tokens, arcade tokens and tickets, and "points" on some websites.

Scrips have gained historical importance and become a subject of study in numismatics and exonumia due to their wide variety and recurring use, History.Company scrip was a credit against the accrued wages of employees. In the United States, where everything in a mining or logging camp was run, created and owned by a company, scrip provided the worker with credit when their wages had been depleted. These remote locations were cash poor. Workers had very little choice but to purchase meals and goods at a company store. In this way, the company could place enormous markups on goods in a company store, making workers completely dependent on the company, thus enforcing their "loyalty" to the company. While scrip was a de facto form of currency, employees were rarely paid in scrip. Additionally, while employees could exchange scrip for cash, it was rarely done so at face value. Scrip in this context was valid only within that area or town where it was issued. While store owners in neighboring communities could accept the scrip as currency, they rarely provided a 1 for 1 exchange. This was to avoid the risk of having coins/currency that were worthless anywhere else.

When U.S. President Andrew Jackson issued his Specie Circular of 1836 due to credit shortages, Virginia Scrip was accepted as payments for federal lands.

In nineteenth-century Western Canada, the federal government devised a system of land grants called scrip. Notes in the form of money scrip (valued at $160 or $240) or land scrip, valued at 160 acres or 240 acres (65 hectares or 97 hectares) were offered to the Métis people in exchange for their Aboriginal rights.[1]

Scrip as a de facto form of currency within the setting of the mining or logging industry was discontinued around 1952.

Scrip is also related to the stock market where companies pay dividends in the form of scrip rather than paying actual currency. It is also a written document that acknowledges debt.

After the Great War and Second World War, scrip was used in Germany and Austria; detailed accounts are in Notgeld.

Modern use,Scrip survives in modern times in various forms. Thailand's township, Amphoe Kut Chum, once issued its own local scrip called Bia Kut Chum: Bia is Thai for cowry shell, which was once used as small change, and still so used in metaphorical expressions. To side-step implications that the community intended their scrip as an unlawful substitute for currency, it now issues exchange coupons called Boon Kut Chum.[edit] Gift certificates
Scrip is now issued in the form of gift certificates (alternatively gift vouchers), or gift cards. The two are essentially the same except that the cards automate the checkout and accounting processes. Cards usually have a barcode or magnetic strip, which can be processed through a standard electronic credit card machine.

Cards do not have any value until they are sold, at which time the cashier enters the amount which the customer wishes to put on the card. This amount is rarely stored on the card but is instead noted in the store's database, which is crosslinked to the card ID. The major exception is in many public transport systems and library photocopiers, where a simplified system (with no network) stores the value only on the card itself (a stored-value card). To thwart counterfeiting, the data is encrypted, though not very strongly given the relatively low amounts of money involved. The magstripe is also often placed differently than on credit cards, so they cannot be read or written with standard equipment.

Scrip fundraising,
In the late 1980s, the term scrip evolved to include a fundraising method popular with non-profit organizations like schools, bands and athletic groups. With scrip fundraising, retailers offer the gift certificates and gift cards to non-profit organizations at a discount. The non-profit organizations sell the gift cards to member families at full face value. The families redeem the gift cards at full face value, and the discount or rebate is retained by the non-profit organization as revenue. Great Lakes Scrip Center, the nation’s largest broker of scrip gift cards, reports that more than 3 million US households and 13,000 non-profit organizations use scrip fundraising.

Gifts cards are increasingly being offered as consumer incentives at no cost or for a substantial discount. For example, reward points given for the use of credit cards can be exchanged for a variety of gift cards and some companies will offer high value gift cards at a discount. Gift cards are readily available at a discount using online trading services.

There are websites that allow users to trade, donate, buy and sell gift cards. Sellers use these websites because the gift card is not to a store of their liking, and buyers because this provides opportunities to buy these cards for less than they are nominally worth at the business.

Online games.Many online games (MMORPGs) provide a type of virtual currency that can only be earned within the game and/or be purchased with real legal tender from outside the game. Typically this currency cannot be exchanged for real legal tender after it has been acquired, but there are exceptions. Some games are free, but sometimes players are required to donate currency in exchange for additional items or gaming options, which can be traded among the gaming community and used as currency or traded back for real money. The ability to exchange real money for virtual currency or scrip and then back into real money raises a great many new issues, some of which parallel traditional issues with scrip and some of which are new.

While other online games may not provide scrip in the form of virtual currency or may not redeem it for real legal tender, an active market in trading virtual assets acquired in-game may still exist outside the game. In some cases, this may involve payments in real legal tender (e.g., trading of in-game assets on eBay). This, too, can be considered a modern form of scrip.

The amount of trade in these forms of online scrip can be very substantial, although the very nature of scrip strongly constrains its influence to the environment in which it was issued. Nevertheless, as the amount of trade grows and its value in real-world currency increases, many new and unexplored economic, legal, and policy questions arise; see the separate article Virtual economy for further discussion.

Issues,Unless the gift card is obtained at a discount (paying less than the actual value of the card), some point out that trading real money for scrip is unproductive as it then ties up that money until it is used, and usually may only be used at one store. Furthermore, not all gift cards issued are redeemed. In 2006, the value of unredeemed gift cards has been estimated at almost US$8 billion.

VISA, MasterCard and American Express gift cards are initially funded by a credit card or bank account, after which the funding account and gift card are not connected to one another. Therefore, once the predetermined funds are consumed, the card number expires. Gift card holders are thus able to make riskier Internet purchases, without the fear of having to persuade a merchant to stop pulling funds from them.

VISA and MasterCard also have re-loadable debit cards.

One disadvantage of gift scrip is that some gift card providers charge "maintenance fees" on the cards, particularly if they are not used after a certain period of time, or the card will expire after a given period of time.Some provinces and states in North America (e.g. California, Ontario, Massachusetts, Washington) have enacted laws to eliminate non-use fees or expirations,[5] but because the laws often only apply to single-merchant cards buyers have to review the gift card conditions prior to purchase to determine exact restrictions and fees.

Military scrip,Military personnel deployed in other countries (protective or occupation) are generally paid in military scrip, which prevents legal tender from going into the black market, plus it is an excellent way of keeping tabs on military payments and spending. This type of scrip can be exchanged through the military for legal tender upon return to the home nation. Military occupying powers have also been known to issue occupation scrip for local civilian use as a means of controlling the local economies.where was i when history was taught?


Marion Y (322)
Tuesday September 16, 2008, 7:57 pm
Linda...Yes, I believe this fallen economy was deliberate. Past and president economists running the Fed knew and understand clearly the consequences of lowering interest rates in a free market. Most likely many dems and repubs played the markets accordingly with inside information. Offshore accounts created in fictitious names, or diverted to accounts for relatives and friends is likely. These people in on the scams have already placed their money outside of the US long ago. They have no worries, unless we get smart and march on Washington en masse. I don't believe Obama is in on it because the republicans would have called him out long ago. But 'Keating Five' McCain and his side-kick, Gramm, were deep in this and played a role in the collapse of our economy.

40 acres and a mule, huh? Just kidding. But there's lots you can do with that land. I'm happy for you. I hope it's remote so others won't easily find you.

Your children will come around soon, if the economy moves along as it is now. My children don't understand either. They still think I'm nuts. That doesn't bother me. Everything I've told them will sink in at the first sign of martial law, 2-3 more major bank failings and any number of other signs that will affect them or people they know. If your children don't come on board fast enough and time is running out, you may have to decide to go without them. But they will come.

Have you thought about solar panels? This would solve your electrical needs. Money will have no meaning after awhile, at least the money we currently use. With the land space, growing your own food and selling/bartering with neighbors would sustain you. Storing gas is an option out there and driving only when absolutely necessary. Water and energy. The survival blogs will help you with ideas and what you need to prepare.

You're right not to worry as it does no good. You seem to have a jump on this and a good plan. Visit as many blogs on survival and the answers will come. is a good resource and the owner also keeps you tuned on the economy. You are fortunate you have your mother's stories. This will keep you motivated.

Marion Y (322)
Tuesday September 16, 2008, 8:04 pm
Nevaeh...You're a natural PI, LOL! Thanks for this information. Your examples jogged my memory on the miners using scrips from an old movie. So this is what the government might do when our currency has no value. I'm not optimistic that this will work in our favor.

Sandy v (91)
Saturday September 20, 2008, 1:50 pm
Tim you live too far but I know exactly what you mean and yes, small towns are sooooo different. Don't think they would like all of us moving and making them BIG towns! The dominos have fallen and the house of cards. Lord, you know what goes up gotta come down. Now the american people will HAVE to work together of we all lose. I hope everyone out there realizes this goes back to the 80's and to McCain and his deregulations. If anyone can feel comfortable voting for this lying idiot, may God help them and us

Marion Y (322)
Saturday September 20, 2008, 2:22 pm
Wow! I posted the above comment for another thread and it ended up here. What's going on Care2?

Marion Y (322)
Saturday September 20, 2008, 2:25 pm
Okay, now that comment disappeared and I'm left with the one above that makes no sense. Please ignore folks.
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