A 50 million mark Weimar Republic banknote worth $1 USD
By: Ryan Jaroncyk, THL Contributor
I'm not one to be an alarmist, but this is serious folks.
Over the last few months, central banks around the world put a whopping 63% of their cash into Euros and Yen, instead of the U.S. Dollar. Though not widely reported, this is a seismic shift. Normally, the U.S. Dollar is the top choice for central bank reserves.
It means the US financial system may be about to receive the shock of its life, making the "Panic of '08" look like a stroll in the park.
How did we get here?
The Federal Government began borrowing and spending gargantuan amounts of money. Huge deficits began to emerge, and trillions were added to the national debt. American consumers were also busy spending themselves into oblivion.
Then, in the latter part of Bush's term, Fed Chairman, Ben Bernanke pushed the Dollar to an all-time record low with vast amounts of money printing and record low interest rates. A Democratic-led Congress further accelerated out-of-control spending from 2007-2008.
Finally, the "Panic of '08" struck, the Federal Government was bailing out Wall Street, and the Federal Reserve was printing trillions of dollars out of thin air to prop up the system.
Due to a fragile economy and 10% unemployment, Fed Chairman Ben Bernanke remains resistant to raising interest rates anytime soon. Gold is setting new, nominal records. Global markets, particularly in China, Russia, India, and Brazil, are experiencing monstrous rebounds, much more significant than our own 55% rally off the March low.
The international community is beginning to express grave concern over the value of the US Dollar due to unsustainable debt levels and inflationary policies at the Fed.
US Senate candidate and investment guru, Peter Schiff, is famous for predicting a stock, credit, and housing collapse. Jim Rogers, the billionaire investor, called it. Nouriel Roubini, an NYU economist, warned of a serious recession.
Marc Faber, a top investment analyst, was sounding the alarm bells. And of all the 2008 presidential candidates, both Republican and Democrat, only one warned about a Dollar crisis and an imminent, severe recession: Dr. Ron Paul.
All of these individuals were ridiculed, scoffed at, or second-guessed, right up until the time their prescient forecasts were fulfilled. Now, these guys are hot commodities on all the major news networks. And what are most of them warning about now? The collapse of the Dollar. Look them up and take the necessary, precautionary steps.
If the Dollar falls, there will be no funding for any of these other endeavors. And if you think it can't fall, recall how only a year before the "Panic of '08" hit, the U.S. stock market had been at an all-time record high.
Put the next round of candidates to the test. If they have previously held office, how did they vote on fiscal matters? If they ran as candidates, did they predict the crisis? Are they talking about the US Dollar now? What are their specific proposals to head off a disastrous currency collapse?