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Wednesday, December 23, 2009

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Written by VisionVictory
Sunday, 13 December 2009 10:07

Every single fiat currency that has ever existed prior to the ones we have with us today, has eventually been destroyed by its government. Let me say that again. Over 3,800 fiat currencies have failed with the exception of the ones we have with us today. So, what's different about the ones we have with us today? Nothing.

The only difference between a fiat currency that has value today and one that no longer exists, is time. Currently, the world is supported by a 38 year old fiat Dollar system. Prior to the entitlement boom, the U.S. Dollar was as good as gold..literally. Prior to 1933 Americans had a currency that was redeemable in gold and silver. Sound money kept control of our government through limited supply and demand. Unfortunately, Democrat President Woodrow Wilson created the creature from Jekyl Island known as the Federal Reserve in 1913.

With the free market no longer influencing interest rates and credit worthiness, the U.S. economy entered its first Federal Reserve boom bust cycle with the roaring 20's followed by the Great Depression, then by war, more war, recessions (new word for depressions), and of course the Great Society. With the transition from Republic to Empire complete, Republican President Nixon did what any good emperor would do, devalue the currency and keep the party going.

You see all leaders with sound money face the same two choices:

  1. They can live within their means; tell their constituents the truth about war, government services, and the free lunches that aren't really free. If society wants war, services, and free lunch for all they will need to be taxed. I'll let you guess how many Kings, Emperors, and Presidents have chosen option number 1.
  2. Screw sound money. We'll borrow instead of tax. Print instead of making payments. No one will even notice since we (the government) can tame inflation. You see at first no one notices. No one even cares. The tax revenue and deficits are still not that far a part. Of course as government gets bigger and more free lunches are passed out, the debt rises so much that just the interest becomes, oh say 202 billion for 2009
With the unlimited man made fiat dollar the sky is the limit, I mean it took Republican President Ronald Reagan one term to grow the national debt larger than all the previous Presidents combined. Did Ronald Reagan create all the unaffordable entitlements? No, and neither did Obama or Bush for that matter. But guess what they all do have in common, they all chose option number 2.
One of the biggest frauds in the world today is that the United States dollar is a safe haven. The U.S. dollar became a safe haven when it still had ties to gold and silver. Shortly after WWII the gold dollar was crowned with world reserve status. This meant nations and central banks agreed to do transactions in U.S. dollars. Because of this, demand for U.S. dollars Nations and Central Banks have saved and looked to the dollar as a store of value.
The fiat dollar didn't come until 1971. President Nixon feeling the pressure of war and exploding entitlements closed the gold window. The dollar was now a free floating fiat currency. And by the way, with world reserve status, it was still in high demand. With the dollar now backed by a printing press and still in high demand, U.S. consumers were given the ultimate global credit card.
For the last 3 decades the world has produced, saved, and built their nations, while the U.S has been busy maxing out their global credit card by borrowing, spending, and living the good life. No need to save when the world needs dollars to buy oil, we have lenders lined up at our interest only door steps. Who needs capital to expand an economy when you have China, Japan, and the whole world begging for freshly printed U.S. currency?
How long will this party last?
In my opinion the party is already over, we're just too drunk on debt to notice. Americans have been in an illusion of wealth for so long, they actually believe that 2005 was a normal year. Most believe a recovery is likely and will bring back good times. Meanwhile the world is buying less and less U.S. currency, a trend that has accelerated to the downside for the last 9 years.

The U.S. currency has seen dramatic declines priced against gold, oil, Euros, and food. U.S. stocks as well priced in oil, gold, food, Euros, Aussie dollars, Canadian dollars, Swiss francs, and almost any other item of value has seen a decline. I know, stocks are up, but my point is that they are only up in Dollars. It's a trick and all part of the illusion; in fact, you can call it the final act. As I write this, congress is about to raise the debt ceiling again, but this time its going to be raised to a record 1.9 trillion.

Previous to 2009 the record for an annual deficit was less than half a trillion. 2009 blew the roof off with a 1.4 trillion dollar deficit, payments of course have been kept down with an artificially low rate of 2% and of course paying our lenders back in a devalued currency has also helped the trickery. The breaking point in my opinion is here, now, today, and it is only a matter of time. Remember how I said the trend for buying dollars is down? Well guess what, the demand for borrowing is up, up by more than you can imagine.

It took 205 years for the national debt to hit 1 trillion dollars, less than 10 to hit its second trillion, and in 2009 less than 9 months to add 1 trillion to the deficit. According to the Congressional Budget office for fiscal year 2010, we should hit a trillion just 7 months in. So let's look at the macro data, more war, more interest, more entitlements, entitlement spending, and less revenue from baby boomers and foreign lenders. Hmm, I wonder if they will continue the weak dollar policy.

People who still hold their wealth in U.S. dollars blow me away. I can't tell you the day or time, but I can tell you that ALL nations who have chosen option number 2, ALL empires, ALL fiat currencies eventually come to an end. When that day comes, its not going to be pretty. The drug of stimulus, artificial interest rates, and printing prosperity will turn into a hyperinflationary nightmare. Those on the fence will be washed away by a foreign tsunami flooding the nation with dollars. They will be buying our gold, silver, valuable real estate, commodities, and other assets. Foreigners will turn in their dollar causing prices for everyday Americans to become unreachable.

Like ALL other fiat currencies, the dream will end in a terror. Nation after Nation has repeated history, the history that you can not print your way to prosperity. You can not devalue your currency to pay debts and you can not sustain an endless military occupation of the world. In closing, the dollar crisis is here, and there is no turning back.

Post Script:

My advice; my non-licensed armchair economist advice: Get out of the dollar.

You are up against the tide of inevitability. Stop voting for Democrats and Republicans that support the illusion, the entitlement system, the free lunch system is killing this country. We have to own up to our promises, devaluing a nation's currency and taxing the people through inflation is thievery. It's not too late to change course, however, in my opinion it is too late to avoid the economic iceberg.

Americans who want to prepare for a complete currency collapse (loss of world reserve status) or who just want to stop losing wealth in the illusion of nominal gains, need to exchange U.S. dollars for gold, silver, foreign businesses, and goods that can be used during a time of economic instability. I am not a paid advertiser or promoter, but I have used these companies to protect myself, I know the people who run these companies and have even become friends with a few of them.

I buy my gold and silver from: locals,,, and

I purchase foreign businesses (funds) through

I purchase rice, flour, sugar, honey, canned goods, and other bulk items from Costco.

Am I a doom and gloomer? No, in fact just the opposite. I purchase investments that I believe will increase my wealth, I purchase goods that I believe will cost more (a lot more) in the future. I just had my first child and continue sharing information with people on youtube( I'm a realist who is starring a crisis and an opportunity in the face. I'm greedy and I'm generous, my greed drives me to know the facts, my generosity drives me to take 10-15 hours out of my week to share info on youtube and my website. Does youtube pay me, yes, only when people click on the ads. But guess what? not that many do.

My point is, in the end, I really hope people take the information I provide and share it like I do. I also hope the people who come to the same conclusion take action. Every piece of information we give or share with each other is a crack in the illusionary glass. I can't tell you how many times people question getting out of the dollar when all the evidence points that the dollar is their biggest risk. People are running around worried about gold and foreign stock confiscation. Guess what people, they are already confiscating your wealth through U.S. dollar inflation.

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