Debt, Deficits(trade and budget),employment,Dollar


Some time ago, we decoupled Gold from the dollar. It seemed to be the best thing to do. A shortage of liquidity was the reason for the crash of 1929 the reasoning went.  We still remember the crash of 1987 and the bear market in 2000 which might reassert itself in the coming months.

The crashes havent gone away and neither have the recessions. What we are happily choking on is the ability to print dollars without any relation to anything.  

The dollar has declined 20% or more in value in the last three years vs the Euro. Do you think our surfiet of Dollars has anything to do with it. We have a 500 billion dollar a year trade deficit. We have this paper dollar buying Goods and is used as a defacto global trading medium. Countries hoard dollars as most of the world trade is conducted in Dollars.

With the dollar dropping 20% vs the major currencies it might cause other nations to pick a more stable currency, which at the moment seems the euro.  The Dollar is artificially supported by the buyers of our Government debt, (they are the countries with a trade surplus China and Japan). Could this entire situation unravel?

In every recent testimony before congress and the Senate Alan Greenspan he has warned of the high level of deficit financing.

You may ask, what has this got to do with the elections in November. To which I will state that a vote for either Democrats or Republicans will maintain the status quo.  I have heard arguments that it has been that way for the last 50 years, what difference does it make now. Economic disaster of any great magnitude take time to develop. When laws of economics are flouted consistently, corrective measures occur. This disaster which is looming is going to be worse than 1929. At least in 1929 we had Gold as our harbor of wealth, now we will have nothing just some empty pols promise who has cashed in and will be vacationing in the Swiss Alps, while John Q public wonders what happened.

If you need to take evasive action, it is not after the disaster occurs but rather in the times of action that are presented to you like the elections this year. The earlier we start to treat the disease the better the chances of it not being as painful.

The writing is there on the wall...

People start to seriously start looking at Libertarian candidate Badnarik who is our best hope of getting us out of this mess.

Bring back the gold standard <runs back into the woods>


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