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This morning, we awakened to the news that the U.S. dollar has now fallen to its lowest levels in about a year — in freefall against the euro, the British pound and many other major currencies.
This is precisely the danger I’ve been warning you about.
Just yesterday, I showed you how Washington’s massive debt and entitlement obligations have grown to well over $100 trillion — far more than our nation could ever hope to service — let alone ever repay.
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.
We saw how this strategy is already being implemented … how it has already begun to crush the dollar’s value on world markets …
And we’ve seen how, by destroying your buying power, it can only drive your cost of living through the roof … push retirees living on fixed incomes into abject poverty … and trigger massive new waves of bankruptcies from coast to coast.
The simple truth is, if Bernanke’s secret debt solution was the ONLY threat to the U.S. dollar, it would be enough to crush the greenback’s value.
But this intentional destruction of the dollar by our leaders is only ONE of FOUR factors that are about to crush the value of your income, savings, investments and retirement in what will go down in the history books as the single greatest confiscation of personal wealth in world history.
Today, we’re going to examine a second crucial reason why I am convinced that the U.S. dollar is doomed:
Foreign investors are abandoning the dollar in droves.
Anyone who buys long-term U.S. treasuries these days is virtually begging to get his head handed to him for three very simple reasons:
FIRST, long-term treasuries are paying bupkis. To many, tying up money for 30, long years in return for a paltry 4.2% yield isn’t an investment decision; it’s an IQ test.
SECOND, foreign investors aren’t blind, deaf or dumb: They know full well that U.S. deficits and debt are exploding. And they’re also keenly aware that Bernanke’s secret debt solution means the yield they earn in those treasuries will be worth much less with each passing year — as the dollar continues to fall in value.
AND THIRD, the sheer size of Washington’s debt has many foreign investors wondering if long-term U.S. treasuries really are a prudent investment in the first place. As our national debt continues to explode, so does the risk that at some point, Washington may have no choice but to default on that debt.
Put simply, foreign investors are disgusted with Washington’s unprecedented spending binge. They’re haunted by Bernanke’s seemingly intentional failure to defend the dollar. They’re sick and tired of footing the bill for our spendthrift ways. And they’re increasingly skeptical of our ability to pay what we owe them.
And now, they’re beginning to recoil in horror; snapping their checkbooks SHUT.
This is serious: Overseas investors fund fully 50% of our borrowing addiction, holding $6.2 trillion in U.S. securities — including almost $4.6 trillion in bonds.
But over the last year, central banks have been actively replacing portions of their dollar reserves with the euro, the Canadian and Australian dollars, and most of all gold. China alone recently announced it has quietly increased its gold reserves by more than 75% over the last seven years!
All this has enormous implications for the value of your money, your buying power and your standard of living: As demand for U.S. treasuries wanes, so does demand for dollars to buy them. And as worldwide demand for dollars declines, so does the value and spending power of every dollar in your pocket.
Worse: As more foreign central banks, overseas fund managers and investors flee the dollar, Washington has no choice but to pump out more and more unbacked paper dollars and dump them into the economy — further eroding your buying power.
It’s a perpetual cycle that can only lead to one thing: Printing presses blazing on overdrive … a collapse of bond prices … a massive surge in interest rates … an explosion of inflation … and the total destruction of our standard of living — at least, for those who aren’t aware or prepared for what is happening.
That’s why I believe it is absolutely essential that we pull out all the stops to help you weather the greenback’s ultimate collapse.
So please be sure to watch your inbox tomorrow and over the next few days for the next installments of this series — and to discover what we’re doing to help you protect your wealth and profit.
In the meantime, I stand ready to help any way I can. Just click this link to leave a comment and give me your comments. Ask anything you like and we’ll do our best to get you the answers you need to shield your wealth.
Best wishes,
Larry
Related Posts
- Sudden death for the U.S. dollar! (09/18/09)
- Dollar headed for collapse? (09/17/09)
- Dollar sinking; gold soaring! (09/23/09)
- Free Online Seminar to Survive Dollar Crisis (09/22/09)
- Bernanke’s Secret Debt Solution (09/15/09)
{ 51 comments… read them below or add one }
With the majority of our IRA funds invested in various length annuities, are we better off taking more than our RMD’s before yearend?? … and if so, how do we protect that cash either by rollover or after paying tax ? None of these annuities have been annuitized yet.
Larry,
Is it wise to continue to hold stocks as a hedge against the dollars fall so we can continue to at least keep enough wealth to stay ahead of the inflation? By stocks I mean in resources and technology. Thanks
SWITCH YOUR U.S. DENOMINATED FINANCIAL ASSETS INTO WORLD CLASS TANGIBLE ASSETS: e.g. REAL ESTATE, OIL, GOLD AND OTHER RAW MATERIALS. AND TO EQUITIES BASED ON FOREIGN ASSETS—STOCKS OF CHINESE, BRAZILIAN, CANADIAN COMPANIES
Larry, I appreciate your honesty here becuase I am also alarmed by what I see. Being in a conservative mind set, I’m playing the WEISS Smart Money portfolio to a tee right now. I am frustrated though, with greater funds sitting on the sidelines in several banks (Weiss safe bank list). I do not feel confident putting the additional money into the market but it seems there is no money to made elsewhere. Paralysis!
Dear Larry,
I also subscribe to a Weiss Premium Newsletter, 21st Century Super Trader, and eagerly await that letter, sooon, sugesting an inverse ETF to take advantage of the further fall of the dollar.
I agree that it is here and coming more masively. My data is from a very different source than Wall Street and includes, at leats, the Rolling Stone article about the Great American Bubble Machine and Goldman Sachs — emminent demise….
Karl
money in a 401k , limited investments , whats the best option.
Larry,
These comments on the dollar and its expected impact on wealth are alarming. But would not that be a strong reason to buy gold? Yet, I have held off on further purchases because of your comments that gold would be dropping here not rising. Also, you folks are generally positive about the stock markets medium term which is fine but why have not the U.S. markets reacted negatively to the situation with the dollar as they have in the past. The scenario right now is terribly confusing!
I have been waiting on the sidelines for too long. I’m ready to put some cash in gold. Please advise of prospects, and if some retirement funds can be rolled over.
Help! I am retired and financial plans included receiving at least a modest amount of interest or other income. Now with no or little interest and forthcoming hyperinflation, what do we do now to protect our assets and receive income to keep us afloat without jeopardizing the principal? My annuity policy income was based on S & P average, but now I am hearing that there won’t be any income for the rest of my life. I have not annuitized the policy yet. Do I take out my money and absorb the penalty and put the funds elsewhere ? If so, where?
Thank you.
With only 3% bulls, isn’t the contrarian view that the dollar has bottomed and will rise. Politics doesn’t control the dollar. What do you think about the possibility of a bottom in the next couple of weeks?
I certainly believe you But what do I invest in? I live in Canada.
Won’t a cheapr dollar increase attractiveness of American goods and services, reduce imports to US and lead to employment creation?
Also, the 104 trillions owed to pnsioners etc will not be payable as lump sums but as weekly/monthly payments over a long number of years!
Where do you see the dollar vs Euro say by end pf December 2009?
I remember reading a report that the Dollar index will be allowed to fall to 75 or 74. And Should have a trading range between 75 and 80.
But that is the FED that thinks they can “try to” control that.
Rise or fall, I’m in Silver and Gold. I don’t care what price it goes too (up or down) I’m holding on.
Don’t you think that the US is between a rock and a hard place with no way out? This is how I see and that is capitulate on the USD and suffer the consequences and suffer the pain now or just keep prolonging the inevitable collapse. Either way they lose. At this point is it better to do it now or later. I don’t know about you Martin but I’m a few years younger than you. There is no way I want to live through the consequences of a dollar collapse.
But my heart really aches for my children and it’s something that permeates through my mind and body every day. I really don’t know why I’m here. I had three near death experiences with the most severe blood infections while going through dialysis. Can you believe that I finally got a kidney transplant and it’s going on five years.
I don’t fear death and wake up each morning that it’s a miracle. No matter how bad the economy gets just try hanging onto life not knowing if you’re going to die or live. But my children have not had to live through that hell and to really look beyond this world for something much greater to come.
Hello,
I find it rather disturbing that our government either has no official currency policy, or most likely, left the dollar to its own fate. Curent debt level is workable, but the 10 year projection of additional $10 trillion or so is not repayable. Over time dollar has to weaken unless deep changes take place.
Level of the Dollar index is not alarming just yet. Some central banks are still acumulating USD, although they are in the minority, (Brasil, Australia, even China increased its holdings). However, the low of about 70 from 2008 will be critical. If it holds, Dollar will have bought itself a 2-3 years reprieve, during which our government will better prove to the world that we are serious about fiscal prudence.
If it doesn’t hold, we might have serious problems much faster and more severe than we can even foresee right now.
Like your news letter. Keep up the good work.
HI,
we are trading on the brink of collaspe and everyone is upbeat thinking we have beat back the D word. Bernake and others are pretty much downstream and off the hook until bread reaches $5.00 a loaf.
Pesimission and negativity are not needed but do you see China comming to our rescue? When you live beyond your means for any extended time you have to pay the piper..
We went to Afghanistan to get one man! He is not there. That country is called the death of empires although Iraq was our waterloo. in Afghanistan Alexander the Great failed, The British failed, the French failed and the Russians failed. Paints a good picture of what we can expect after 8 or 9 years.
gold will be almost worthless. To survive I seee returning to an agrarian society can we feed ourselves. anyone still know what a loom is?
I hope I have it ALL WRONG……. Time Will Tell
(the polecat from the sticks)
Keeeping 500 military operations around the globe hasn’t helped either.
Maybe there is a God, but he is on vacation ?????
Dear Larry,
Nice chart. Had you run this warning near the top it would have been great….did you?
Now everyone is negative on the US$ time to be contrary and look for a reversal.
Regards
Simon
Larry
Now that gold has broken resistant levels and is clearly on the way up. Will you concede that it’s now time to BUY gold? In your last newsletter you said “Do NOT add any more core gold holdings to your portfolio at this time”. Why?
John S
$dollar is probably doomed - but doomed yet?
When the current equities rally collapses, will the $dollar not rise?
If the US Government defaults or the dubious assest-backed credit IOUs coolapse, will the $dollar not rise?
Larry,
I hold your gold put option and have just sold my last gold ETF yesterday at a very good profit, on the strength of your statements re a pull gold back. I still have gold producer stocks, but I feel naked without my gold ETF. I’m waiting for your Real Wealth Report, but next week seems like a long way off.
Would you consider publishing twice a month?!
Celia
I bid on a commercial property last week. Only two bidders present. Starting bid was 12% of what the property sold for in the past. It was obvious they wanted to start the bidding at about 50% of the previous sale price to avoid, as the agent put it, “stigmatizing” the property. Final bid was less than 20% of past “R.E. boom” value. The property did not sell. This was an example of how the possible future value of the dollar may be dictating current commercial property sales prices, along with the other woes of real estate.
Larry
How do you reconcile your belief that the recession is over, which you stated in this morning’s video, with your long term view that the Dow will suffer a massive and long correction beginning sometime next year?
Regards
Frank O
Larry - I read your information very carefully; I am not a sophisticated but rather cautious investor; I would welcome any down to earth suggestions for what to do next….
I’m in cash mostly and am inclined to go with what you are saying about the collapse of the dollar. What, then should I be doing with my money, my real estate, my IRA’s etc.
Please help - Now you’ve got me on the edge of my chair - and my future. At 66 - I can’t afford to make mistakes with my investments, my life….
thanks for any constructive feedback and specific advice!
mary
Should we be converting our dollars to foreign currency?
Larry,
With the economic fundamentals being in such a malaise, it’s hard to say if the dollar freefall is going to continue. The stimulus spending is giving an illusion of a recovery resulting in more investor speculation that the dollar is going to collapse. The thrifty consumer of the Great Depression has seemed to have returned, and they’re not going for it. This can result in a market correction sooner rather than later. Once it happens, the dollar will go back up again. Increasing protectionism is likely to discourage investors from overseas markets, increasing the likeliness of a global double-dip recession, but overseas currencies might still be ahead of the dollar.
It seems that the only way we could avoid chaos, is to go out and use our Dollars as quickly as posible to acquire as many and as much foreign hard currencie such as the Swiss Frans, the Swedish and Danish Kronas, Dutch Guilders, the Krugerand, etc. as we can, and then set up an underground bartering system under the exclusion of our corrupt, incompetent and outright stupid goverment. But you know what? There are already plenty of resrtictive and even criminal laws on the US books that will dump you into jail, before you even get out of the airport. The sorry fact is that our banks, our politicians and Wallstreet have rigged the system in such a way that the US citicenry can only stand by and watch helplessly as they tear the financial foundatios of this country to shreds.
What can we do? Go back to the middle Ages: Build a wall around youy village, Plow your lawn under, plant vege-tables, raise chicken and rabbits, wear everlasting Blue Jeans and shirts, Select your own local politicians and stop sending money and representatives to Washington. I am sure there will be some rough years, at first, But in the end we will all breathe some fresh air and we will suddenly recognize something we have long missed: FREEDOM.
I am an 83 year old widow who has been in the stock market for 50 years. Most of my estate is in
precious metals, stocks in commodities or stocks outside of the United States. I cannot predict what
is going to happen but I am sure that I am in a better financial situation than most people my age who
hold Treasury notes or Bonds. My financial advisor thinks that my portfolio is one of a 30 year old but I told him that I read a lot and feel that this is the best way to manage an estate for my children and
grandchildren–Thanks to you , Larry, and the Weiss Group, I feel confident that I am in as good a
situation as any one else going through this horrible mess.
Most of my retirement savings are in long term annuities, index annuities that are not moving for the last 2 years. What’s the best move? I’m thinking of Dividend stocks, which ones are safe and pays good, out there? My risk tolerance is very low. I have not found a good and trusted financial advisor that could help me in this uncertain financial chaos.Any advice or recommendation will be greatly appreciated.
God bless.
Franz
Larry,
You have convinced me of the dim future of the dollar. I can see the similarity of us following the last stages of the Roman Empire. We have the out of control bureaucracy, fraud and a weakened military.
We need a savior. Larry, I can get gold bullion in hand, but where do I put my major assets without fearing confiscation?
Frank
How can I protect myself and my investments that are dollar based? Whay are my options to safely put money in other currencys?
Larry,
As the dollar loses its value, will u.s. stocks go up or down?
LARRY,
I am a suscriber of both Alliance and real wealth. I read your post as well as Mike Larson constantly. I believe dollar will continue to go down, Fed needs to pull out this excess paper money in next couple years. I have some thoughts about how we can put together a comprehensive solution with all of factors as follows:
1. dollar going down
2. west to east shift
3. natural resource race
4. all central banks with huge excess paper money since last year
5. Warren Buffet famous play: fear vs greedy
6. how can we play with Russia rich resource with a booming economy neighbor, China. I hold some RSX, it goes up quite nicely. I still trying to find more ways to play. Any idea?
7. how we can invest EWZ vs RSX or better with individul stock?
8. From CYCLE standpoint, when we need to enter these natural resource positions?
9. I hope you and Rich will have better stock picks of natural resource stocks to fully take advantage of this huge opportunities.
Thank you so much for your work.
George
So what do I do? Sell all my current holdings except GLD?
Other holdings are: AAN, BRK/B, PSQ, SDS, SH, UNG, TBT, GIS, CPL, AND FPGCX. They are down around 10 percent of cost.
I also have three income annuities (with Kemper and Allianz) that supplement my Social Security income. I am 84 and active.
I own my home.
dear larry, my wife has a 401k which i don’t have to tell how its doing. how could or where put her money somewhere safer.
do you reecommend puirchase of EVERBANK currency C/Ds at this time? Which ones do you recommend?
How much gold should one have and is copper and others also a good buy.
My wife said that I should sell my $50 gold coins after the price of gold reaches over a thousand dollars. I feel that the value of the gold and platium coins could go even higher, We are almost 70 years of age and she feels that we should cash them in. I say hold and see. as we may need this for our future to pay asst living costs and health issues.
Larry,
So what should we do to protect ourselves from the plunge in the value of the U.S. dollar?
Nice content indeed! i will visit as often as i can.
cheers
Larry,
What will happen to my mortgage, will I reap a windfall?
Frank
Larry,
I am concerned about maintaining the value of my investments as others have stated. Currently I am heavily invested in various oil companies including MLPs which I think may be safe, especially with inflation. Also, I have purchased TIPS and some municipal bonds, GLD, and a few thousand dollars of US and Canadian gold coins. Am I treading on dangerous ground and, if so, please point me in the right direction. I subscribe to “Safe Money” with Dr. Weiss and follow some of his recommendations, but I am getting less adventuresome.
Thanks,
Lloyd Westphal
Lloyd Westphal
My understanding is that President Nixon took USA off the gold standard in the early 70″S saying the US Dollar is only worth as much as it will purchase in the US…….thus USA does not have to exchange dollars for gold…..and will remain strong…..please advise ….thanks…
Hi Larry,
We have X-number of gold Eagles, Y-number of silver Eagles, and Z-number of USD in a safety deposit box. Also, there are is a sufficient number of USD in a checking account for our daily operations. Our income from SS, a pension and a short term savings account sustains the checking account and allows a very small occasional addition to the gold and silver coins. I am concerned about the Z-number of USD in the safety deposit box as it is in danger of becoming worthless.
I think all existing currencies face the same danger. Should we be converting it to gold or silver?
Also, should the gold/silver ratio be a specific number? Thanks, Clarence
We have about 40 real investment investment properties valued at about 3 million. We have about 1/2 million in debt. some cash. What would you advise us to do.
My pension is tied to the dollar. Should I cash it in and take the tax penalty so I have freedom with my money?
1. Do you see the US mandating exchanging our FRNs for gold, silver or platinum AMEROs?
2. Would this not be a better currency than worthless paper IOUs - aka FRNs (federal reserve notes)?
3. Since they have essentially stopped citizens from moving our US$ into offshore banks, how else can we convert to another currency?
4. If investing in gold and silver futures and ETFs, gives us a return, aren’t we ahead of the game?
5. Why don’t we just solve the problem once and for all ….
(a) Revoke the private Federal Reserve’s charter, END the FED and kick them out of our country or put them on trial for TREASON.
(b) Create our own gold, silver, platinum backed currency.
(c) Arrest all congressmen and senators (except Ron Paul & Dennis Kucinich) for TREASON, and mandate that NO lawyer can be in public office, nor be a judge (else this violates separation of powers doctrine), this includes the Pres, VP, and cabinet members.
(d) Bring all our military home to protect our borders as we go through this change of the guard.
(e) Start repealling all unconstitutional laws on the books.
(f) Ban the Council on Foreign Relations (CFR) and Trilateral Commission and any other communist front organization.
(g) Deport all illegal aliens, international banksters, jesuits, and communists.
That would help out a lot - - - don’t you think? If you don’t do something soon, we will implode! We are training people now to fill the political offices. We also have Free Energy devices that will revolutionize the world, clean up our air, and put an end to big oil. Next - we need to put an end to big pharma as they are murdering millions. Don’t take their poison folks, in pill form or in fear mongering.
Sincerely,
Stephen R.
LARRY
thanks for offering this chance, to gain the knowledge necessary, to combat the falling dollar.i would apprieciate your thoughts on foriegn currency. since the dollar will fall,which currency or currencies will be in the best position to rise in value. Larry is it better to hold these currencies through a forex account, or can the actual currency be held.if holding the currency is better ,what is the best source for purchasing currency.the same question but substitute gold and silver in place of currency.
respectfully jerry dotto
I read experts saying DEFLATION is certain now and INFLATION is certain now. Both cannot be true, right? I hear that the current meetings in Pittsburgh will push for reestablishing the USD as the world standard but that conflicts with Bernake’s secret strategy. Both cannot be true. Whaaaaaa?
Of course the dollar must fall for USA to get the economy going again. The proliferation of paper money continues to diminish the dollar’s worth. So why isn’t TBT soaring?! Instead, it is dropping like a rock as the market gets legs. It appears many are trying to wish the market to fix the sick money system. It cannot. Do you recommend holding the TBT after a 10 point drop?
is it safe to move us dollars to canada?