THIS VIDEO regarding the US economy and especially our currency.
Numbers don't lie...governments and medias do. Our country is facing its most serious threat to its very subsistence in the history of our republic. Those who refuse to see it will just be its victims. This is not "fun" news or a pleasurable topic to blog about...but after 20 years of belief that this will "some day" happen...I fear that "D-day" is soon upon us and we have little time to prepare or adjust for it. This is not just about the USA, but any country dependent on US dollars...like PANAMA.
The video itself is long and "boring"...like most economic discussions to the average American bystander. For those of you who refuse to take the time for the presentation, let me give you my 2 minute summary...
The only thing that has saved America from economic ruin this past decade has been the power of the American dollar as the defacto "world currency". Up until recently, the whole world has pegged their economic and currency system rates to the dollar. Based on that, our government is the only one that can simply "print more money" to cover up our debts and meet some of our obligations...saving us from hyperinflation. Meanwhile we hypocritically look down our collective noses at failed states such as Greece, Iceland, Ireland and others who are in huge default over their collective debts. The core summary of the video is...those days are SOON coming to an end.
Many world governments and businesses are starting to move quickly into other currencies besides the dollar. China holds the most of our US treasuries and obligations that are supposed to support the value of our currency. When they pull the plug on accepting dollars as payment, things will go downhill quickly. The only reasons they haven't done so already is that we are still BUYING a majority of what China is producing...and we help keep China's currency at a deflated value which helps them sell more to US and the rest of the world at a cheaper price. If currencies are allowed to adjust for true values, almost overnight there will be no one who can afford what the Chinese are producing. Is it any wonder that many knowledgeable and big money investors have moved into Gold and other commodities which have pushed those values up tremendously over the past 5-10 years?
I fully realize this is "unpleasant" to consider...and don't shoot me...I'm just passing on what more knowledgeable "prophets" are saying and that I unfortunately agree with. To survive, we must plug into global investments and diversify into multiple currencies...because the day is very likely coming when your credit cards and even ATM cards will be shut down and many of us will be left with no access to our assets or ability to buy anything with common currency.
Most of us won't do anything about this because of "normalcy bias". This is when a majority of people just cannot believe that a catastrophe that has never happened before will happen. Therefore, they don't prepare, plan or take action against the possibility. It is this bias that caused only a minority of 100,000 Jews to escape from Nazi Germany in the late 30s before it became too late for the 450,000 others still "hoping" Hitler was just an anomaly or "temporary problem". It is this bias that kept a majority of people in New Orleans from fleeing the oncoming "Katrina" which took out over 2000 lives. The choices we make determine whether we will be victims, survivors or beneficiaries of doom and destruction.
I truly want to write the blog that is "rosy", positive and telling everyone that "everything is going to be alright...just believe, have faith and continue waving that flag"...but, I cannot do that in good conscience...especially to many of you who are the closest and dearest people in my life.
I prefer to suggest that we all encourage each other to take actions against an insecure and dangerous future. Convert as much cash and other assets as you can into commodities and multiple currencies. Get some of your portfolio outside of the USA WHILE YOU STILL CAN. This is not about patriotism...this is about survival, personal responsibility and even morality. Globalization is IRREVERSIBLE. Pay off your debts if you can, but not to the detriment of your "survival cash" and investments. When the crisis hits, it will not be about how much debt you have...no one will be paying. It will be about what cash and possessions you can protect from seizure and outright revolution and anarchy.
Still don't believe this could happen? Well, that is your choice...but there will be no one (including government) to come to your rescue when this happens and you will not be able to say you "had no idea".
In addition, politically we must demand our government to focus on getting our economy...and currency...supported. The only way I think we can do that is 1) pull back on all foreign expenditures, including the ineffective wars we are funding on many fronts, 2) rev up the domestic engines of productivity and self production of oil and other core products we depend on for survival and industrialization instead of giving our last "gold" to the Arabs and Asian economies of the world, and 3) STOP DEFICIT SPENDING BY ALL GOVERNMENTS...FEDERAL, STATE AND MUNICIPAL.
So there, I end this difficult blog with macro constructive suggestions on how to avert this coming catastrophe. Not that it will happen...because the Federal printing presses continue rolling out those bundles of C-notes every day...and sends most of them out to the foreigners we buy from or who hold our debts...with just enough funneled to the masses of Americans to keep them placated...for now.
God help us...truly!
PS, I just noticed Sam wrote on this subject as well on his Panama Blog...