RiskAverseAlert

The Destruction of the Dollar: It's Nearly Inevitable

Debt is never really an issue. Rather, the issue is how it is applied to physical processes that venture to increase the productive powers of mankind's labor. That is why the current crisis likely will be solved in a fashion resembling the way by which Alexander Hamilton resuscitated the Continental Congress following the defeat of the British Empire by the United States of America in 1783, thereby laying the groundwork for the Constitutional Republic the nation became in 1789.

We are in the dying days of an imperialist monetarist system that has existed in some form or another for thousands of years. The beginning days of a global credit system along lines established by Hamilton and nearly put in place worldwide at the conclusion of the second world war are upon us.

Your thinking is much too contained inside the box. Certainly the United States legitimately owes a great deal on what has been loaned to the nation and unwisely spent. Yet the only way this legitimate debt is going to be fairly paid back is along lines suggested here. Too many repugnant, colonialist adventures have been unwisely pursued in recent times for the nation to be suckered into the only other alternative: all out war for the purpose of reneging -- stealing -- what is rightly owed. The people simply are in no mood after having been swindled for so many years, wittingly or not, by those whose Ivy League educations have proven no more valuable than the presently bankrupt Federal Reserve. Likewise, there simply are not enough aircraft in the world, nor enough poisons to jam down our throat that could bring a change of heart.

You see, I AM a protectionist. I believe the U.S. deserves everything put forward in the simple, single-sentence Preamble to its Constitution. This runs contrary to everything we are experiencing, which you think we deserve. So, per your being short Treasuries, let it be known there are real Americans (unlike this treasonous hack Bernanke) who will defend the dollar and the Treasury, who understand how these are under attack by enemies both internal and external, and who kindly ask those too afraid to step outside the box if they might find the dignity within themselves to open their minds and simply listen. Truth is only some small number of people in Congress is all that need be changed for the world to be reborn in the spirit of the American Revolution. The choice we presently face goes way beyond anything you are suggesting. It is between peace and human dignity versus physical breakdown and war. The matter is that serious. Don't kid yourself to think there aren't interests pushing for the latter in these, the dying days of their bankrupt imperialist monetarist system.

Three Asset Classes that Can Actually Outpace Coming Inflationary Price Increases

Any worse than double-digit inflation to come is likely only in a process of breakdown of the global physical economy. Financial assets surely will deflate; the hyper-inflation of monetary aggregates in response to the "credit crisis" virtually assures this. View the wall of money as a war chest. No Fed tightening will change the outcome this wall portends. Financial asset deflation was begun when the sub-prime mortgage market imploded, and it will not stop until cooler minds are given opportunity to act on the fact that, the present financial system is bankrupt, must be put through reorganization, and reestablished in an environment whose sound structural framework already has historic precedent (think the Bank of the United States).

Until policy drastically changes and calls a bankrupt duck "fupped duck," increasing segments of physical production will cease to exist because finance to support physical economic processes will not be forthcoming in those measures needed to sustain present capacity. We already see this effect in so many places you would have to be practically blind, deaf and dumb not to acknowledge what, really, is going on.

Thus, given our present direction, it is by scarcity that hyperinflation will be felt by most.

Confidence Games and Ponzi Schemes: No Way to Run the World's Largest Economy

"You see, consumption is not necessarily a bad thing. In fact, it is very necessary - people have to buy stuff. But, like most everything else, it is best done in moderation..."

Mmmm... How about it is best done with utmost intention at raising one's productive purpose? Such consumption could, indeed, become quite prolific. Yet if one were to moderate this, then might not one's productivity be compromised? So, your call for moderation is much too vague and easily misconstrued...

"After years of spending freely - much of it funded not by income, but by taking on record levels of new debt - consumers are now pulling back."

And that is THE MAJOR ISSUE underlying many problems we presently face. This issue has been largely ignored for far too long. Now that debt can no longer be expanded to mask THE problem, we are returned to the very reason the United States of America was formed in the first place (i.e. in opposition to tyranny). I am speaking specifically of the INCOME problem. While INCOME was being robbed we were allowed to go into debt under the false premise income would recover. Bzzzz. WRONG. And now comes either one of two things: revolt (demanding a return of our capacity to generate abundant income) or fascism (which underlies most calls to consume less).

"Nowhere is confidence more important than at the Treasury Department and other government agencies that manage the nation's money."

Agreed. And those Mars rovers have yet to find benevolent alien life willing to backstop Treasury's profuse bleeding of debt. BIG PROBLEMO.

Your attack on Medicare and Social Security smack of fascism. To call these programs a "Ponzi scheme" without addressing the INCOME ISSUE is a fraud.

"The entire world has been duped into believing that asset prices can continue to rise indefinitely and that we'll all eventually grow wealthy as a result."

Well, I believe the Dow Jones Industrials Average could fall to 3600 TOMORROW and still remain in a long-term uptrend, so there's some truth to the idea that "we'll all eventually grow wealthy." However, sometimes the "long-term" does not match up with one's lifetime, so I generally agree with your premise.

No, confidence games and Ponzi schemes never end well ... but I do know of one REVOLUTION (1776) that ended FABULOUSLY (and thank God for Alexander Hamilton)...