It has always been said that what goes up must come down, and it has
equally been said that the bigger they are, the harder they fall.
The currency bubble we now face is not only dangerous, it is ironic and
poised for a crash.
Don’t be fooled by the calm before the storm.
The U.S. petrodollar – which has been the de facto global reserve currency
for more than 40 years – is truly in decline, even as the financial
terminology labels it as “strong.” A deceptive term to be sure.
The dollar is trading at a higher rate than anytime in the previous
decade, hurting U.S. export business and impinging upon the
repayment of debts from foreign entities. With the bottom threatening to come
unglued, it is this “strong” high from which America is poised to fall.
And it is largely due to historically unprecedented intervention by the
Federal Reserve. Its policy of buying bonds and issuing interest-free money
via QE3 has immediate implications that not only determine the domestic
economy, but shape global markets, too. Newsmax’s Ashish Advani writes:
Teflon Dollar.
That name would be appropriate for the U.S. dollar these days. It can do
nothing wrong. No matter what any says, or does not say, the U.S. dollar
heads higher.
[...]
U.S. corporations have already announced weak earnings due to the
strong dollar and have issued earnings warnings. Second-quarter
results will be worse than first-quarter results are. The stock market surge
upward seems to have halted with large swings, and after three
months, the stocks are nearly flat compared with start of the year.
Yet the dollar shows no signs of abetment.
But the appearance of stability and normalcy is only going to make the
inevitable crash worse… with all signs pointing to a harsh correction coming.
Former Congressman and presidential candidate Ron Paul recently warned that a strong dollar “is not a
reason for optimism,” chiding that historic highs in dollar exchange is
a sign of foreboding things to come:
The United States is teetering on the brink of a disastrous
financial crisis, the former congressman pointed out. The dollar’s “rally” is
not a sign that the US economy is strengthening, but just a byproduct of a
world’s surfeit of easy money.
According to Dr. Paul, the Federal Reserve’s policies facilitated the
unprecedented growth of the dollar against other major currencies, not real
economic growth.
The International Man writes that a dollar crash is coming,
and that it would likely follow a euro crash, which would only increase the
magnitude of the currency calamity (planned, as the site argues, for the rise
of a purely digital currency, controlled and monitored electronically):
It’s safe to say that the EU, the US, and quite a few other
jurisdictions are nearing currency crashes, and in all likelihood, the euro
will go before the dollar. So, unless the EU has already prearranged
a new euro, the US dollar might well be chosen as an immediate solution to
the problem, as the US dollar is presently recognised and traded throughout
Europe. Therefore, a relatively painless transfer could be made.
However, the dollar, which is presently praised as being a sound currency,
is really only sound in relation to the euro (and some other lesser
currencies). Once its less stable brother, the euro, collapses, the dollar
will be exposed.
The London Guardian warned that a perfect storm of economic
factors are driving the world to the brink once again – giving legitimacy to
fears that a new global crash is coming, bigger than the one in 2009.
With debt rates among many of the world’s nations soaring, it is chilling
to note that “absolutely nothing has changed since the crisis.”
In all practicality, no lessons have been learned:
As Janet Yellen’s Federal Reserve prepares to raise interest rates,
boosting the value of the dollar, while the plunging price of crude puts
intense pressure on the finances of oil-exporting countries, there
are growing fears of a new debt crisis in the making.
Ann Pettifor of Prime Economics,
who foreshadowed the credit crunch in her 2003 book The Coming First
World Debt Crisis, says:
“We’re going to have another financial crisis. Brazil’s already in
great trouble with the strength of the dollar; I dread to think what’s
happening in South Africa; then there’s Malaysia. We’re back to where we
were, and that for me is really frightening.”
Through this now-quiet but deeply-rumbling currency pageant, the world
order is being remade – and the average American will likely not be shielded
from its effects.
Though the demise of the dollar and the rise of a truly global reserve
currency has been planned for some time, the entrance of the China-led Asian
Infrastructure Investment Bank is making some serious waves and rocking the
dollar-boat in ways that may only remain subtle for a short time longer. Advani writes:
From a geopolitical standpoint, the U.S. has shot itself in the
foot and is now seeing increased hostility to the U.S. dollar. Last
July, I wrote to you about the new challenge to the World Bank and the
International Monetary Fund (IMF). Asian countries, after being ignored by
the IMF and World Bank for decades, decided to challenge the Western
hemisphere dominance by announcing their own world financing body, the Asia
Infrastructure Investment Bank (AIIB).
The AIIB is now the biggest disruption to the global monetary
system since the end of World War II.
Is it time to sell the U.S. dollar now before there is a mad rush and the
dollar goes into free fall? Or will the Teflon coating continue to protect
the dollar for some time?
The moves in the game are now controlled only by the largest of pieces –
with the Federal Reserve the driving current behind everything in the U.S.
market sphere.
The average person must be prepared to do with less, to batten down the
hatches should this crisis come, and likely be ready for trade and exchange
by means outside the official system.
The official currency of the aftermath will likely be digital – controlled
by the big banks, monitored by the authorities, and presenting significant
restrictions over individual accounts. The International Man discusses a number of these scenarios.
The unofficial black and grey markets will likely see the value of silver
and other precious metals, and deal heavily in barter items and secondary
currencies to meet the everyday needs of people on the ground level.
Here is a discussion of some of most
important barter items you will want to have on hand for emergency trading,
including both necessities and coveted comfort items like: cigarettes, soap,
bullets, alcohol, laundry detergent, silver coins, water bottles, water
filters, water purifiers, matches & lighters, toilet paper, candles,
batteries and more.
Stockpiling these items, or having the ability to produce them will
increase your positions in times of crisis, and enhance your ability to
survive.
Gold will remain valuable, too, but silver is denominated better for everyday exchanges and
is thus more liquid, and perhaps less subject to theft and confiscation.
