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Wow! I just checked here on my personal blog and found more than 500 brilliant responses to my article in Money and Markets yesterday, and more are still pouring in!
In that article, I detailed how, even if every American family could save five percent of their income year after year … and even assuming every single penny of that savings was thrown into the pot to pay off Washington’s debt …
Each American family — and descendents — would have to toil for the next 429 years!
And that’s only if no MORE debt was added in the meantime!
After detailing the true depth of U.S. national debt and the disastrous impact Washington’s borrowing and spending spree is having on the dollar, I asked a simple question: “How can America get out from under this mess?”
The answers that readers posted are absolutely spot-on:
John H. wrote: “I believe we have reached a tipping point. Clearly a nation that has lived beyond its means as long as we have cannot reasonably be expected to change its course and live frugally enough to repay its indebtedness.”
Kurt seems resigned to a vast confiscation of wealth: “I believe our federal bureaucracy is out of control, has no fiscal discipline and have ruined this country. We have not felt the full effects of our debt burden but we will.”
Reverend H. hit the nail on the head: “It’s impossible to borrow and spend, or to tax and spend our way out of the hole we’ve dug,” he says.
“Wenchypoo” agrees and adds, “It seems to be Obama’s intent to let the dollar rot.”
So the question remains …
Why has Washington utterly failed
to come to the dollar’s defense?
Do they even know what causes
a currency to rise or fall in value?
The answer is clearly that U.S. Fed Chief Ben Bernanke knows exactly what he’s doing. In 2002 — during one of his most famous speeches — he stated:
“By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also REDUCE THE VALUE OF A DOLLAR in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services.”
Make no mistake about it: Bernanke is fully aware of what’s needed to defend the dollar. He could light the fuse on the greatest bull market in the history of the greenback with the stroke of a pen if he wanted to.
The sad fact, though, is that …
The last thing Bernanke or President Obama
want right now is a strong dollar.
WHY have Obama and Bernanke failed to come to the greenback’s defense? Why is Washington continuing to spend, borrow and print knowing that by doing so they are, in effect, declaring war on the U.S. dollar?
Simple: THEY HAVE NO CHOICE!
Consider these facts:
The U.S. government’s official debt is at an all-time high of $11.8 trillion. Every year, Washington has to make a staggering $335.3 billion in interest payments just to avoid default on that debt. In fact, just the interest on the national debt now equals 12% of all federal spending.
The Federal Reserve is also in hock up to its eyeballs — the liabilities on its balance sheet have DOUBLED — from $1.2 trillion a year ago to more than $2 trillion today.
Most terrifying of all — especially with the first wave of almost 4 million baby boomers reaching retirement age this year — unfunded government IOUs are coming due on Social Security, Medicare, and Federal pension payments. Those obligations are enormous: An estimated $104 TRILLION.
We are now the single most indebted nation in the history of the planet. We owe more to foreign investors, retirees and ordinary citizens than we could ever hope to repay.
And that’s not the half of it: Washington will add an all-time record $1.8 trillion to the national debt, pushing our budget deficits to almost 13% of GDP.
This year and every year for the foreseeable future, Washington will have to borrow 80% of the world’s surplus savings just to pay its bills!
Gutting the dollar is the ONLY way
Washington can hope to survive
this massive debt catastrophe.
Destroying the value of our nation’s currency is the insidious, cynical trick governments the world over have always used when skyrocketing deficits and debt threatened the collapse of their economies.
This last-ditch strategy has been used many times before — in Brazil … Russia … Argentina … France … Australia … the UK and more.
It’s even happened before right here in the United States: In 1933 — when President Franklin Roosevelt and Fed Chief Eugene Black intentionally devalued the dollar in an attempt to re-ignite the economy.
It’s the historical desperation move of last resort:
FIRST, governments spend, borrow and print money wildly over many decades to fund programs aimed at keeping the voters happy …
SECOND, when the debt burden begins to crush their economies, governments then borrow and print even more wildly in a doomed attempt to spend their way out of the debt crisis they created, and …
THIRD, when the government’s debts grow too large to repay — or when paying the interest on that debt becomes too burdensome — they intentionally debase their own currencies in an attempt to service and repay their debt with cheaper money.
This time around, I’m calling it
“Bernanke’s Secret Debt Solution”
— and it is already happening.
Right now; before our very eyes.
Every time a government employs this strategy, its people suffer. Economic growth continues to suffer. Spending power plunges and the cost of living soars. Bankruptcies skyrocket. Savings are wiped out in the blink of an eye.
Please don’t get me wrong. When a nation’s economy is in as much trouble as ours, there’s not much else the government can do to pull itself out of it. So what Bernanke is doing is inevitable.
But HOW he’s doing it — keeping virtually all Americans in the dark, with no chance to protect themselves from the inevitable financial fallout — is utterly unconscionable.
The Question of the Day:
What can we do to help you
protect yourself and profit
from Washington’s insidious scheme
to crush the dollar?
As I pointed out earlier, this is NOT a forecast. It is already happening. You can see it in the historic plunge of the U.S. dollar against the euro, the British pound and other currencies. And you can see it on a very personal level every month as your dollars buy less; your cost of living soars.
The worst part is that this great debasement of the U.S. dollar is still in its early stages.
Washington’s record-shattering deficits … off-the-charts borrowing by the U.S. Treasury … and run-away money-printing at the Fed you’re seeing right now — all virtually guarantee that the declines in the greenback’s buying power we’ve seen so far are only a dress rehearsal for the dollar disaster to come.
This intentional destruction of our incomes, our savings, our investments and our retirements is far and away the greatest, most personal financial crisis any of us will ever have to deal with. And the greatest theft on the planet.
As always, we at Weiss Research want to be here for you; to see you through … to help you protect yourself … and even to help you grow your wealth while the value of your dollars continues to disintegrate.
I’m all ears — just click this link and leave a comment to let me know what we can do to help make sure your family is NOT victimized as Washington continues to gut the value of your money.
I promise that all of us here at Weiss will do everything in our power to help you get through this with your wealth intact and still growing.
Best wishes,
Larry
Record-shattering federal deficits and debt … the largest treasury auctions of all time … out-of-control money printing at the Fed … all mean ONE THING for you:
The U.S. dollar resumed its swan dive overnight, hitting brand-new, one-year lows.
We took a look at Bernanke’s secret solution to our massive, record-shattering debt: That only by destroying the value of the U.S. dollar can Washington ever even hope to service our skyrocketing debt — by satisfying its Social Security, Medicare and Medicaid obligations with ever-cheaper dollars.
