The collapse of the dollar imminent?


#1

I figured I’d start a thread about the biggest single threat to our nation that no one is talking about and analyzing in today’s media. The collapse of the world reserve currency, the American dollar. For those that are aware of this threat if I leave out any important information please feel free to add below.

Every country trades (exports/imports) goods and services in the Dollar. It’s a world wide currency. I believe it’s been that way since we wen’t away from the gold standard in the 1950’s. I’m sure all of you are aware that of the saying over the last few years of how we are spending .46 cents of every US dollar to pay for our national debt, which has reached a record high if 16 trillion ( I thought I heard it’s really more like 20 trillion). That news has been made public. Now what the average citizen doesn’t realize is that the Federal Reserve now thanks to congress and the president, has the legal ability to print unlimited amounts of dollars, which is what the federal reserve does. Now according to QE3 which was part of the economic recovery package, the Federal reserve is now printing 85 billion in fresh bills monthly and pumping it into the economy to try to stimulate job growth here in the US. To rev up the economy. However, it’s clearly not working, because if it was the unemployment rate wouldn’t be 7.5% but rather around 4%. So we are wasting over a trillion a year doing this. This also allows the federal reserve which is also in control of our nations debt interest rate (interest on our nations debt) to keep our interest rate at near 0%-0.25%. So basically we are borrowing money from other country’s (china etc…) by printing more dollars, to artificially keep interest rates low, which intern devalues our nations currency (the dollar), to try to stimulate job growth, which isn’t working.

Now what the federal government doesn’t want you to know and why no one except Ron Paul, and his son Rand Paul are mentioning is that eventually they will be forced to raise those interest rates from an artificially low rate of 0%-0.25% all the way up to a normal interest rate of 4.00%. That’s a gigantic difference. When that happens our nations debt will go from 20 trillion+ all the way to over 45 trillion dollars, which has to be paid back. At this point the dollar will lose all or the majority of it’s value and every country will stop using it and it will no longer be the worlds reserve currency. We currently have too much national debt right now to get out of this mess. It’s already too late. President Obama already won a second term and has 3.5 more years as president, and there’s no way he’s going to raise interest rates and stop this printing of all of this money. Even if we had a tea party congress and a tea party president, it will already be too late.

At this point, The federal government will need to pay back the debt and find a way to raise the value of the dollar and will likely take extreme measures to do so like the did during the 1920’s depression. Yes I said depression. You think this recession was bad it’s actually a walk in the park compared to this. The Federal government will be 45+ trillion in debt and that kind of debt can’t be paid back with just raising taxes. Even if everybody paid 100% of their yearly income in taxes it wont even do the trick. What they did in the depression of the 1920’s is close and shut the doors of all the US banks, and cease everybody’s assets that are related to the dollar. That means every type of checking account and saving account. That left everybody with nothing. The government was within legal authority to do that too. Something else people don’t realize is that **Executive Order 6102 is an Executive Order signed on April 5, 1933, by U.S. President Franklin D. Roosevelt “forbidding the Hoarding of Gold Coin, Gold Bullion, and Gold Certificates within the continental United States”. The order criminalized the possession of monetary gold by any individual, partnership, association or corporation. **Basically, if you didn’t purchase gold and actually received it before the economy collapsed you are out of luck and screwed.

During a depression no one can find work (if you do your lucky, but still not making much). Basic necessities like staples (sugar, cotton) and Gasoline rose in prices never before seen. Specialty good were worthless like TV’s etc… because people needed things to survive. This is what inflation looks like.

There are many people that believe the collapse of the dollar is imminent. Look at what the billionaires are doing, the rich people. They are buying up lots of physical gold. Other country’s like China, Australia, Middle east, India have recently abandoned the dollar and if you go there you can’t use it anywhere, because it wont be accepted. Russia just bought enough physical gold that weighs as much as the statue of Liberty. What many don’t know is that these are the big players in the gold market and they try in sneaky ways to keep the little guys from buying gold. Notice how the value of gold has lowered recently? We’ll it’s not because the economy is turning around or because the value of the dollar is rising, it’s because Cyprus sold some of it’s gold reserves to pay for a bailout, because it’s in trouble. Remember the best time to buy and invest in something is when people are selling and the price is going down.

People think the dollar will really start to devalue and be worthless around 2015-2016. My advice to anybody that is able too is buy physical gold now. Do is asap, and sacrifice vacations and fun and just buy as much physical gold as you can. It will be your life line when the crap really starts to hit the fan.

This is 1920’s all over again and everything is alike including the president. Please, if anybody can make the argument that this wont happen, I want them to post how. Thanks.


#2

Bump. Trying to get opinions on this from those here. Why isn’t the media talking or projecting this at all, and what is your take on it? Does this concern you also, and what are you doing to protect yourself? Thanks.


#3

because it is all tin foil talk propagated by those who wish to make people fear the govt. The gold bubble will burst if our economy gets going strong again but if the US economy collapses then the world economy will collapse and your gold bar will be worth just as much as the paper the bills are printed on.

Want proof? Look no further than the gold market. How else can you explain the massive move in an otherwise worthless metal over the last decade?

If you are honest, ask yourself what real utility is there for gold?

Don’t recite what the so-called analysts or experts will tell you about gold being the only real currency in the world (it is not). Those folks will tell you that gold is the only thing that will protect you and your family when things go horribly wrong (fear mongering).

Really, what do you think the world is going to be like if things do really go horribly wrong? I highly doubt that gold bar will get you much if chaos truly takes hold.

Three Reasons Gold Is Like Bitcoin - Business Insider


#4

It’s pretty much a mathematical certainty at this point.

Combine the fact that we will have to pay for the growing debt with money creation, with the fact that our Keynesian leaders believe in printing to stimulate “demand”, there is no way out of it.

Obligations continue to grow and we are decades in debt. And the money creation is destructive to our economy, creating a death spiral or printing to save it.


#5

People should fear the government. It is running us into the ground.

If the world economy collapses-and hence its currencies-gold will be the rallying point and will rise dramatically in value.

That writer is pretty much an idiot. Inflation is happening in consumer products, though the government is cooking the numbers. But a lot of the money is pouring into the stock market which is why it is at record levels…and it is inevitable there will be a crash as a result. Companies are not close to being worth what they are trading for. Finally, a lot of the money is simply being held in banks depressing interest rates.


#6

Not true at all actually. There is a reason why Former President Roosevelt signed executive order 6102 outlawing the purchase and hoarding of Gold in general. It was because he knew the true value of it. I understand things are different right now for a few reasons. Gold will have tremendous value to other countries who have gotten away from the dollar, and there are quite a few big countries that have already done that, and who have purchased tons of gold to prepare for this event. I would recommend to people right now to buy as much physical gold as they can, because right before the dollar collapses and becomes worthless Gold will likely be valued at a record high (likely at $5,000-$6,000 and ounce and it’s currently at $1,500) I would immediately sell it for stock piles of food, seeds, water and much needed necessities. I would also buy foreign currency from a country that was smart and that got away from the dollar. Gold itself will also be worth a lot to other country’s who are using it.


#7

Thats not saying anything of course the US and its economy arent going to last for ever, on a long enough timeline the survival rate for everything is zero. If anyone think its going to happen in their lifetime they are just fools.


#8

No it was because when our dollar was backed by gold he didnt want people manipulating the entire economy. Anyone buying gold now it almost sure to lose a ton of money, the gold bubble is going to pop. This is the time to sell get out of gold and rebuy after it pops.


#9

Also many people aren’t aware that the United States doesn’t have to pay for all that it citizens consumes in imports, and when the dollar fails they will have too. That in itself is scary.


#10

Unless you are late in life, it probably will happen in your lifetime.

The money creation has been unprecedented ever since 2008 and will only get worse. There is a trajectory that has been set, and markets will only put up with it for so long. Certainly not for decades.


#11

This is exactly what the big players (other countries like ours and others, and billionaires) in gold want you to believe. This is the reasoning they use to keep the little guys out so they can make more money and get the gold. All of these big players are buying as much gold as they can get their hands on. Look it up. Gold will be worth a ton for at least the next decade.


#12

Right. HE wanted to manipulate the economy. And he wanted to pay for the New Deal, so he devalued the dollar by 40% in a single swipe.


#13

Wasn’t the federal government spending .42 cents of every dollar to pay the interest on the national debt just last year? Now it’s .46 cents.


#14

Yes. And tax revenue is historically capped at around 20% of GDP, regardless of the rate. So it must be financed by the inflation tax.


#15

I might well welcome super-inflation…thousands of dollars worth of student debt? Gone!..but seriously I think about it, it’s certainly worrisome. Not sure it will be so sudden and dramatic though, I’ve been hearing “the dollar will collapse we’re all going to die!” since 2008. The dollar is going to decline slowly over a long period of time and a lot of our debt is probably just going to end up being cancelled (that won’t help the dollar, or our credit rating).

Also the dollar deflated during the Depression, of course it was gold-backed at the time (hence the Executive Order).


#16

This is the fallacy that the tin foilers can never get past.

If car can go 0-100 in 3.9 seconds that does not mean it will go 0-1000 in 39 seconds.


#17

I’ll say a few of things in answer to your questions and post as well as ask a couple of questions.

  1. I like your focus on this issue…it is indeed the most threatening thing that there has EVER been to the continued existence of this country. ( I include all our wars and the cold war in this opinion because I never thought we WERE LIKELY TO LOSE those other existential threats. ) The second Obama election is LIKELY to put us over the edge as a country…BUT… if we can stymie enough actions on BHO’s part…winning the Senate in 2014 and holding the house AND of course winning with a FISCAL conservative in 2016…we might still have a chance.
  2. I question the accuracy of your paragraph

"Now what the federal government doesn’t want you to know and why no one except Ron Paul, and his son Rand Paul are mentioning is that eventually they will be forced to raise those interest rates from an artificially low rate of 0%-0.25% all the way up to a normal interest rate of 4.00%. That’s a gigantic difference. When that happens our nations debt will go from 20 trillion+ all the way to over 45 trillion dollars, which has to be paid back.

a. The Pauls are by NO STRETCH of the Imagination not the “only ones mentioning” our debt and the crippling interest rates to come. Standard fare from any number of Republicans…and I think ALL of the serious Prez candidates. It was clearly laid out in the Romney 54 point plan and in the Ryan plan. RON Pauls solution of cutting a trillion from the budget was in fact the MOST IRRESPONSIBLE thing one could do if they hoped NOT to put the country into a GREAT DEPRESSION. He fiscal plan was and remains idiotic.
b. Where the hell does 45 trillion come from??? Bogus. If the debt rises to 20 TRILLION as is likely…at 1% interest then the TAXPAYERS must each year pay 200,000,000,000…200 billion to pay off the interest and keep the country solvent. Just like a house mortgage…if you can pay the interest…you can keep the house. So…if the interest goes as you suggest to 4% what does that mean??? Correct…the annual interest just went to 800 billion a year. The debt remains 20 trillion not 45 trillion. So if we take in roughly 3 trillion in taxes a year…we’ll have 2.2 trillion left for all our other needs. Hard times…since medicare, SS, and basic defense will eat more than that…hard changes will be needed…but survivable.
c. The real danger lies if inflation REALLY kicks in and people around the world no longer want to BUY our debt at 4%…they may treat us like Greece…not willing to buy our debt at any interest. At 10% interest…our ANNUAL payments on the debt go to 2 TRILLION and the country collapses. It can happen. It is happening in Europe…our interest rates in the 80’s were in the mid teens!! Scary. Right now…our economy is actually GOOD at the macro level…(not talking about jobs) talking about GDP, inflation, corporate profits and tax revenues…thanks to us being a safe haven for other people to put their investments. Won’t last forever since we are being as irresponsible fiscally as you point out. When they stop believing in the Dollar…things can change quickly…just like the run on the banks in the Great Depression.
3. Are you aware that ALL the gold that has EVER been mined in the history of the WORLD has a total value of around 7.5 trillion at an oz. price of $1500?? There ain’t enough gold ever made to pay even half of OUR country’s debt! Gold is no solution for the country or monetary systems…but is may indeed be a good way to hedge your individual risks. I sure wouldn’t risk everything on a commodity that went from nearly 1800 bucks last October to around $1350 in mid April losing 28% of value may be a great investment…but it can also be a case where you get killed if the timing ain’t right and you need to convert. I joke that if the end is near…Canned Food and Bullets and the like may be more valuable than gold. The real question…is the end gonna be past the expiration date on the beef stew? :smiley:
I also think that you could spread your risk a bit by investing in gold and platinum and bags of silver coins that are sold by weight if you like commodities.
Gold is back up off its’ lows last month by about $100 bucks so a lot of the opportunistic upside is over I think…still a whole lot better than last year if you think the long term is up.


#18

^There is not enough gold to back currency at its current value. But in reality any amount of gold or any other substance can be enough to back a currency if the government chooses to make a conversion. The price will adjust accordingly.


#19

That 45 trillion number is my estimate, it’s interest on top of principle, with a high unemployment rate over a long period of time, which means less revenue or not enough revenue coming in to pay the interest/principle on the national debt. I figure the interest rates will increase each year by at least 1% starting next year for several years, and 1% on 15-16 trillion is 150 billion dollars a year. Perhaps in 5 years we will be paying 750 billion towards our national debt, which means other federal programs wont be funded. Clearly. Combine extremely high unemployment, with Obamcare, and massive regulations already in place, and the Federal Government will lose revenue and at that point, they will start taking money, because they don’t have enough coming in.

I expect really high unemployment due to Obamacare, and I expect it to skyrocket even further when taxes are forced to go up on businesses to pay the national debt. We haven’t even seen and felt this yet and it’s going to get so much more worse. It’s right around the corner.

FYI, In 1980, banks’ prime lending rate stood at 17.75 percent, and right now it’s really close to 0%. My rate estimates are really conservative.


#20

I agree with this. I heard that a non official analysis says that the USA has 8000 tons of gold that we own. If they did an audit they would find out. I mentioned Ron Paul and his son, because during the presidential debate (Primary’s), Ron Paul said we should go back to the Gold Standard. Many people thought that was drastic, but they don’t know what’s about to happen to the dollar. It’s not mainstream news.