Friday , 22 September 2017


U.S. Dollar Collapse Will Be Cataclysmic Endgame of Current Fiscal Policy

Government fiscal policy – profligate spending, leading to debt crisis, leading to currency crisis, leadingdollar-worm-hole to…the fall of the U.S. dollar – is the major cataclysmic endgame that is going to befall the U.S.

So says Laurynas Vegys (caseyresearch.com) in edited excerpts from the original article* entitled A Crisis vs. THE Crisis: Keep Your Eye on the Ball.

 
The following article is presented by Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!)www.FinancialArticleSummariesToday.com (A site for sore eyes and inquisitive minds) and the FREE Market Intelligence Report newsletter (sample here; register here) and has been edited, abridged and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.

Vegys goes on to say in further edited excerpts:

Major financial, economic, or political trends…don’t normally appear as full-fledged disasters overnight. In fact, quite the opposite; they tend to lurk, linger, and brew in stealth mode until a boiling point is finally reached, and then they erupt into full-blown crises (to the surprise and detriment of the unprepared).

Fortunately, the signs are always there for those with the courage and independence of mind to take heed and they are telling us…that the real ball we need to keep our eyes upon is our government’s fiscal policy of profligate spending, leading to debt crisis, leading to currency crisis, leading to…the fall of the US dollar.

The first parts of this progression are already in place. Consider this long-term chart of U.S. debt.

 debt 1

Notice that government debt was practically nonexistent halfway through the 20th century, but has seen a dramatic increase with the expansion of federal government spending.

Consider this astounding fact: The government has accumulated more debt during the Obama administration than it did from the time George Washington took office to Bill Clinton’s election in 1992. Total US government debt at the end of 2013 exceeded $16 trillion.

Let’s put that in perspective, since today’s dollars don’t buy what a nickel did a hundred years ago.

debt 2

Except for the period of World War II and its immediate aftermath, never before has the U.S. government been this deep in debt. Having recently surpassed the threshold of 100% debt to GDP, America has crossed into uncharted territory, bringing itself in-line with the likes of:

  • Japan, “leading” the world with a 242% debt to GDP ratio
  • Greece: 174%
  • Italy: 133%
  • Portugal: 125%
  • Ireland: 117%

The projection in the chart above is based on the 9.4% average annual rate of debt-to-GDP growth since the U.S. embarked on its current course in response to the crash of 2008. If the rate persists, the U.S. will be deeper in debt relative to its GDP than Ireland next year, deeper than Portugal in 2016, Italy in 2017, Greece in 2019, and even Japan in 2023 (and the US does not have the advantage of decades of trade surpluses Japan had).

Granted, the politicians and bureaucrats say they will slow this runaway train, but we’re not talking about Fed tapering here. Congress will have to embrace the pain of living within its means. We’ll believe that when we see it.

Let’s take a more conservative, 10-year average growth rate (an arbitrary standard many analysts use): 5.3%. At this rate, the US will still be deeper in debt than Ireland and Portugal in 2017, Italy in 2019, Greece in 2024, and Japan in 2030.

Either way, this is still THE crisis of our times; all of the countries mentioned above are undergoing excruciating economic and social pain. It’s no stretch to imagine the kind of social and political turmoil that has resulted from the European debt crisis coming to Main Street USA, as American debt goes off the charts.

It’s also important to understand that the debt charted above excludes state and local debt, as well as the unfunded liabilities of social entitlement programs like Social Security and Medicare.

This ever-growing mountain—volcano—of government debt is long-term, systemic, and extremely difficult to alter trend…It’s here to stay for the foreseeable future. While some investors have grown accustomed to this government-created phenomenon and no longer regard it as dangerous as outright military conflict, make no mistake—in the mid- to long-term, it’s just as dangerous to your wealth and standard of living.

Protecting yourself from this crisis is simple: convert as much government currency units as you can into real money: gold.

Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.

*http://www.caseyresearch.com/cdd/a-crisis-vs.-the-crisis-keep-your-eye-on-the-ball

Related Articles:

1. Is the U.S. Dollar Still on Top? If Not, Who Really Has the Most Valuable Currency?

Do you think the USD is still on top? What makes a currency strong isn’t necessarily what makes it popular or valuable, as you’re about to read. Read More »

2. What Would USD Collapse Mean for the World?

I came to the conclusion several years ago that it was just a matter of time before the world realized that the relative functionality of the U.S. dollar was about to go belly up – to collapse. [Below is an explanation as to why I have come to that conclusion and what I think it would mean for the well-being of the world.] Words: 881 Read More »

3. The U.S. Dollar Will Collapse When This Upcoming Event Happens

The term ‘safe fiat currency’ is as intellectually disingenuous as terms like ‘fair tax’ or ‘government innovation’ but, as we’ve been exploring recently why modern central banking is completely dysfunctional, it does beg the question– is any currency ‘safe’? Let’s look at the numbers for some data-driven analysis. Words: 575 Read More »

5. The Collapse of the U.S. Dollar is Unavoidable! Here’s Why

The mother of all collapses is still in front of us. Below are my reasons why that is the case and how to protect yourself financially from such an eventuality. Read More »

6. What Will Happen If (and probably when) the U.S. Debt Bubble Bursts?

The madmen who are responsible for the coming economic disaster continue to behave as if they can manage to avoid it. Violating Einstein’s definition of insanity, they continue to apply the same poison that caused the problem. These fools believe they can manage complexities they do not understand. The end is certain, only its timing is unknown, and, once interest rates begin to rise, and they will, it’s game over so it begs the questions “How much longer this can possibly go on?” and “What will happen to the U.S. and the world when it does?” Read More »

7. Dollar’s Days As Reserve Currency To End In 2 Years (10 Years Latest) – Here’s Why

The American dollar will be overthrown…in as short a period as 5 to 10 years says one analyst while another believes it will happen as early as 2015, 2016 latest. Here’s why.  Read More »

8. Economics Can’t Trump Mathematics & the Math Says US In a Debt Death Spiral

The madmen who are responsible for the coming economic disaster continue to behave as if they can manage to avoid it.  Violating Einstein’s definition of insanity, they continue to apply the same poison that caused the problem. These fools believe they can manage complexities they do not understand. We are bigger fools for providing them the authority to indulge their hubris and wreak such damage. Read More »

9. When the Debt Bubble Bursts We’re Going to See Economic Chaos So Get Ready – NOW!

Never before has the world faced such a serious debt crisis.  Yes, in the past there have certainly been nations that have gotten into trouble with debt, but we have never had a situation where virtually all of the major powers around the globe were all drowning in debt at the same time. Right now, confidence is being shaken as debt levels skyrocket to extremely dangerous levels.  Many are openly wondering how much longer this can possibly go on. [Here’s my take on the situation.] Read More »

10. U.S.A.: United States of Addiction – Our Insatiable Appetite for Debt

16 point 7 trillion dollars.  That is our current national debt.  12 point 8 trillion dollars.  That is the amount households carry in mortgage and consumer debt.  We are now addicted to debt to lubricate the wheels of our financial system.  There is nothing wrong with debt per se, but it is safe to say that too much debt relative to how much revenue is being produced is a sign of economic problems.  At the core of our current financial mess is how we use debt as a parachute for any problem. [Unfortunately,] addictions are never easily cured and we have yet to come to terms with our insatiable appetite for debt.  Words: 850 Read More »

11. Gov’t Debt Will Keep Increasing Until the System Implodes! Are You Ready?

Why are so many politicians around the world declaring that the debt crisis is “over” when debt-to-GDP ratios all over the planet continue to skyrocket?  The global economy has never seen anything like the sovereign debt bubble that we are experiencing today. This insanity will continue until a day of reckoning arrives and the system implodes.  Nobody knows exactly when that moment will be reached, but without a doubt it is coming. Are you ready? Words: 1270

12. A Practical Assessment of the U.S. Debt Problem Shows It to Be Absolutely Absurd

The U.S. debt situation when broken down to one of family statistics really seems absurd. Yet it’s true. It’s a slow motion train wreck that can be seen coming miles away but which, like deer paralyzed in the headlights, everyone is unwilling to face up to and to take any meaningful corrective action – and it will be the downfall of them all. Words: 550

13. Finally! Someone With the Balls to Face Reality and Outline the Probable Outcome & Utter Hopelessness of America’s Debt Problems

Many articles are being written these days that more or less scope the dire financial circumstances the U.S. is in. That being said, I had not been able to find one “analyst” – even one – who had the guts to outline the probable outcome and general hopelessness of the situation and to offer any meaningful prescription for investors to survive this coming catastrophe – until now. Words: 710

14. Economics of Gov’t Are No Different Than Those of Typical American Family – Here’s Why

If Congress does not raise the debt ceiling, the result will be no different than the Jones family deciding that they have maxed out their credit cards and that, if they continue borrowing and spending over their means, there will be significant pain to the family at best and bankruptcy at worst. Any attempt to prove otherwise is futile because it’s just not true! [To further make his point the author provides below 7 other examples of why the economics of government are no different than those of the typical American household.] Words: 585

15. U.S. Debt 101: If the U.S. Were A Stock Few Investors Would Own It – Here’s Why

There has been a lot of media coverage about the United States’ debt issue these days. Why should we care? Because as U.S. citizens, we all own stock in this “company” called the United States of America (let’s say the ticker symbol is USA). We purchased this stock through the various taxes we pay every year (income tax, payroll tax, corporate tax) and we receive dividends through the various benefits we receive every year (security provided by defense budget, Medicare/Medicaid benefits, Social Security benefits, etc.). This article attempts to explain the U.S. national debt in simple layman’s terms by analyzing the United States and its debt issue as if it were a stock investment. Words: 1929; Charts: 5; Tables: 1

16. U.S.’s Runaway Financial Train is About to Destroy the Status Quo

People riding a runaway train can party and remain oblivious to the fact that the train is about to crash into a huge obstacle. Our runaway financial train is about to destroy the status quo as it crashes into the obstacle of mathematical consequences – the inevitable financial train wreck. “If something cannot go on forever, it will stop.” [Let me explain.] Words: 974

17. Take Note: Don’t Say You Weren’t Forewarned!

It is relatively easy to predict further commodity price inflation as a result of the massive money printing going on worldwide and that hard assets, not paper assets, will help protect purchasing power but it is much more difficult to project where else this money printing leads and to what extent a crash is inevitable. What is the endgame? Will it be another financial crash such as in 2008 or will it be a more destructive financial and economic crash that causes a severe but temporary disruption in the delivery of goods and services? Words: 1470