The Fall of the US dollar as the global world currency is an imminent $100 trillion US collapse which will result in an Worldwide Economic Breakdown and Collapse leading to an extended period of global anarchy. This will ignite a 25 year depression in the USA.
Why? Let’s look at the facts.
Since 2008, the Federal Reserve has printed over 3.1 trillion US Dollars of “New Money”. The US now has over $18 trillion dollars in Federal Debt and $127 trillion dollars in Unfunded Liabilities such as Medicare, Medicaid, Social Security, Student Loans, FHA and etc.
During the post WWII era of 1950-60, every dollar of debt created a GDP of $2.41, 1970’s to the early 1980’s we got $0.41 of GDP per dollar and presently we get $0.03 GDP growth for $1 of debt. Sadly this math is not adding up to a best of times scenario. Debt is now destroying economic growth and it is at a pace to go negative in the not so distant future.
Why would you say debt is destroying economic growth?
I would argue that we are already in the 25 year depression that is being hidden and it’s about to get worse. Sure, the stock market is booming but what about the 50 million + Americans on food stamps? The labor market participation is at an all time low.
Don’t believe me?
All you have to do is look at the Bureau of Labor Statistics figures. It has dropped 3% or more in a decade! The real unemployment rate from 2008 to present has gone from about 13% to 23%. Our velocity of money is rapidly declining at rates faster than our great depression in 1929 which lasted for 12 years.
What is “Velocity of Money”?
The velocity of money is the frequency at which one unit of currency is used to purchase domestically- produced goods and services within a given time period. In other words, it is the number of times one dollar is spent to buy goods and services per unit of time. The similarity of present day to the “Great Depression” are staggering.
The “Misery Index” today is at 37.2, during the Great Depression of the 1930’s it was 27. Look at what the “Wall Street Examiner” has to say about it.
So what is the “Misery Index”?
The misery index is an economic indicator, created by economist Arthur Okun, and found by adding the unemployment rate to the inflation rate. It is assumed that both a higher rate of unemployment and a worsening of inflation create economic and social costs for a country.
This means that consumers and businesses are having a tougher time paying their bills and ultimately banks will fail as well leaning on the already heavily debt burdened Federal Reserve. The Federal Reserve is already insolvent because the purchasing of US Debt by foreign countries like Russia and China have plummeted and they are dumping Treasuries at a feverish rate. Some say an attack on the Fed could topple our economy. It has already happened in my opinion.
So what has saved us so far?
The Belgiums have been buying our debt to replace the and prop up the Fed. There is wide speculation that the Belgiums are not actually the source behind the purchase of Treasuries. Someone is playing the Peter and Paul game. Who? I have not found out yet. It’s a shell game that has just about reached it’s end.
So why is the Federal Reserve insolvent?
The Fed has around $56 billion worth of capital reserves. The Fed has about $4.3 trillion in unstable liabilities. The “Debt to Capital” ratio back in 2008 was 22-1. Today the “Debt to Capital” ration is 60-1 as noted by the Federal Reserve Bank of St. Louis. Total Debt to Equity for USA This is not just affecting the Fed. American banking now have over $60 trillion in debt. Debt used to grow 2X faster than the economy. The debt American banks now grow at 30X faster than the economy. For every $1 of economic growth, $30 dollars of debt is being created. The stock market cap to GDP is riding at 203%. People are borrowing money to buy stocks driving up the price of stocks to an unrealistic and dangerous value. Global Derivatives Market is now over $700 trillion and the global GDP is just over $70 trillion. Collapse of the Global Derivatives Market is unavoidable without the Fed using “Quantitative Easing” which it discontinued in Nov 2014. Quantitative easing (QE) is an unconventional monetary policy used by a central bank to stimulate an economy when standard monetary policy has become ineffective. The Fed has been prompting up the economy with around a $100 billion every month since 2008. Now the Fed is broke and insolvent.
What are “Global Derivatives”?
The derivatives market is the financial market for derivatives, financial instruments like futures contracts or options, which are derived from other forms of assets.
The market can be divided into two, that for exchange-traded derivatives and that for over-the-counter derivatives. The legal nature of these products is very different as well as the way they are traded, though many market participants are active in both.
I’m sure everyone is enjoying the cheap fuel prices today. Well not so fast. Ever hear of the “Petro Dollar”?
Petrodollar refers to United States dollars earned through exports of petroleum (oil).
Watch this video if you want to learn more how the Petro Dollar works:
Source: Petro Dollar
So why should I care about the “Petro Dollar”?
The US dollar is the reserve currency standard for the price of petroleum. Russia, Saudi Arabia and China have bought heavily into our “Petro Dollar” system. Since the Obama Administration is clearly rattling the Saudis with his unwavering attention to Iran, they feel betrayed sense their security heavily relies upon the US because the US is pulling troops out of the middle east creating a power vacuum ripe for Iran to fill with the help of the Chinese and Russians. Chinese are heavily dependent on Russian oil to fuel their growing economy and this partnership only makes sense for them to change the reserve currency in the future to something else other than the US dollar.
So what could the next reserve currency be?
China has secretly been acquiring lots of Gold. Why Gold? Gold is the alternative to the US dollar for a reserve currency. Did you know that in WWII the US dollar was so worthless that we had to buy oil with Gold? There has been a lot of repatriation gold by foreign governments in the last year that no longer feel safe storing their gold with the USA.
Not surprisingly Belgium is looking to repatriate their gold. Why? They are buying up our Treasuries? What is the purpose? Are they worried about the US currency? Many countries are considering backing their currencies with Gold.
No worries, I’ll just buy Gold. Really? Unless it’s physical gold that you can hold in your hand you are probably buying junk gold bonds. Most of the gold sold is not actually in your possession and is a Ponzi scheme. You might as well buy into junk bonds. There is no real gold backing up it up. Another thing to consider about owning physical gold and certificates is this fact:
Executive Order 6102 is a United States presidential executive order signed on April 5, 1933, by President Franklin D. Roosevelt “forbidding the Hoarding of gold coin, gold bullion, and gold certificates within the continental United States”. The order criminalized the possession of monetary gold by any individual, partnership, association or corporation.
As you can see if you read about Executive Order 6102, Obama could issue a similar executive order in a financial crisis and economic meltdown and pay you a lot less than you paid for it, criminalize gold hoarders and steal your wealth if you are heavily invested in gold.
So why is China hoarding gold?
Well it is a dual edged sword. China has been doing a lot of shadow banking whereas a lot of the cities and factories it is building are actually empty. They have a lot of people around the world invested in property in China that is actually just junk. When China, the world’s 2nd largest economy goes bust, they will need the gold to purchase oil and the world global economy will go bust. If they need the gold to replace the US dollar as the next reserve currency with the Chinese Yuan or Russian Ruble. This would collapse the US dollar removing it as the reserve currency for the world.
Lastly, let’s look at the Internal Monetary Fund (IMF). When not if the US dollar is replaced as the reserve currency for the world, the IMF will issue SDRs since the IMF “Debt to Capital” is only 3-1, it is in a better position than the Fed to replace the reserve currency.
More about SDRs: http://www.imf.org/external/np/exr/facts/sdr.htm
What does this mean?
Until now, the USA has controlled its own banks and monetary system. The United States would lose control of it’s central bank and currency would be controlled by the IMF or in other words, countries that don’t like us very much.
You can kiss our sovereignty good bye when this happens.