Tuesday, May 4, 2010

The Dollar's Inevitable Demise

A very interesting article in now found in "The American Thinker".

If you are interested in finance, or know anyone who is in the world of finance, it is pretty much accepted that the dollar is rapidly headed for a "collapse". My interest in this relates to the outcome of such a scenario. It has been my belief (and many others as well), that the complete collapse of the dollar could have one of two outcomes:

- It could lead to a new "dollar", based on the EURO model and based on a North American Union (NAU) being formed. If we go this route, I would expect to begin hearing from government leaders etc., that the only way out of the financial crisis formed by a dollar collapse would be the formation of a NAU and an "Amero", which has already received much discussion.

- It could bypass any talk of an Amero (depending on the circumstances existing at the time of the collapse) and a world-currency could be formed.

This article confirms much of the fear that many financial experts express regarding the fate of the dollar:

The Dollar's Inevitable Demise"


Consider these figures. The current size of the American economy is roughly $14 trillion. As of this writing, the federal government's total public debt stands at nearly $13 trillion.

In its first midsession review, the White House Office of Management and Budget estimated that at the end of 2010, the national debt will breach the $14-trillion mark. This means that America's sovereign debt will be soon equal to the annual output of our economy. In other words, our national debt will shortly reach 100 percent of GDP. History and experience show that most governments that assume such levels of debt are ultimately not able to contain them. In most cases, this kind of situation eventually leads to the disintegration of the country's monetary regime and the collapse of its currency.

There is every reason to believe that the deficit will grow even faster in the years to come, as the federal government further increases its involvement in health care.

This, however, is not the worst of it, because the national debt represents only a relatively small portion of our government's total financial obligations. The far greater bulk is made up of long-term liabilities inherent in entitlement programs. According to the latest estimates by the Dallas Federal Reserve, the combined liabilities of Medicare, Social Security, and Medicaid amount to an astounding $104 trillion.

Given the dollar's status as the world's reserve currency, default would be a cataclysmic global event that would result in the disintegration of the world's financial system. Needless to say, this kind of calamity would bring about the dollar's sudden collapse with ruinous consequences for the American people.

Whichever of the two possible options our government chooses to pursue, the final result will be currency destruction.

Outright default would result in the dollar's immediate collapse, while inflation would produce a more gradual decline, at least initially. Needless to say, given the immense weight of the government' financial burden, the inflationary route will ultimately wipe out most of the greenback's worth. Either way, we will end up with a greatly debased, if not completely worthless, currency and all the painful repercussions inherent in that downfall.

To put it bluntly, the dollar's days are numbered and its demise is inevitable.



But unlike, say, Greece, the American dollar is what makes the world economy spin. Almost everything internationally is still ultimately tied to the dollar. Once the dollar collapses, there will have to be a "global solution". The collapse of the dollar seems to be an excellent "crisis" for the globalists to operate, and to finalize their plans for a world financial system and a world currency (both of which would dramatically help precipitate the movement towards a world government).

Things sure are getting "interesting" aren't they? At least for a prophecy watcher.

The dollar collapse is just a matter of time. Money can be printed for a brief period, and then inflation will become an even bigger problem. Printing more and more money would just serve to delay the inevitable.

But what is more interesting - is what happens after the collapse of the dollar.

As they say, "never let a crisis go to waste".

The collapse of the dollar would simply represent yet another significant step towards the Tribulation.

12 comments:

Anonymous said...

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Joe Agnello said...

Scott,

It's absolutely heartbreaking to see the fall of this once great God-fearing nation. I agree that we will probably see the dollar go away soon. I wouldn't even doubt if it happened over night.

I find it so interesting that at the same time Europe is getting closer to forming the basis of a global economic community, we in America our putting so much emphasis on overhauling our financial system.

My guess is that once the dollar is removed as the reserve currency, we will hit much harder times financially. Then we will turn to Europe, which will likely grow in strength tremendously when their currency becomes the global reserve unit.

I think you will find the following articles interesting:

http://www.zerohedge.com/article/imf-prepares-global-cataclysm-expands-backup-rescue-facility-half-trillion-contribution-glob

http://abcnews.go.com/Business/wireStory?id=9958995

http://abcnews.go.com/Business/economists-warn-financial-us-economy/story?id=9990828

http://euobserver.com/9/29905

http://blogs.euobserver.com/waterfield/2010/04/28/greek-crisis-time-to-junk-the-eu-imf/

These articles and the one you pointed out in your 5/3/10 post all indicate that we are about to see a major overhaul of the global financial system. The only possible outcome I see is that Europe will become much stronger because they are realizing that their only chance of survival is to completely cross over into the United States of Europe. The world will then no longer need the United States of America, and we will be utterly dependent upon them.

Sad days are ahead for this country, but God is on the throne, and saved Christians have a very, very bright future! By His strength and power, maybe we can win some over to our side before we're pulled out of here.

Thanks again, as always, for your insight. I really enjoy your blogs.

Joe Agnello
Chicago, IL

Scott said...

Joe,

Its always nice to hear from you, and your comments are appreciated.

I plan on reading each of those links tomorrow (watching "LOST" now, LOL :)

Finance is one of my many weak points, and I have to rely on other folks, much brighter than me. I have a very good friend who lives in the world of finance, and he is in agreement with everything you said above, regarding the rise of the EU during the decline of the US financial system and the dollar. In fact, he is urging me to invest accordingly (I'm looking into it).

The US seems to be a couple of years (only) behind Greece. No one imagined the scenario in Greece, and unfortunately, very few people can come to terms with this happening in the US - yet all of the indices and parameters that are analyzed point in that direction.

It may be yet another reason for the inevitable fall of the US from being a world power.

Strange times indeed.

Thanks again, Joe

God Bless
Scott

Joe Agnello said...

Scott,

I'm definitely no expert in finances either. I'm a lawyer, so that means I'm no good at science or numbers!

However, I have learned enough to understand the big picture. I rarely (if ever) understand everything discussed in these articles, but I've been able to see the big picture of where trends are going.

By the way, I agree with you on where to invest. I've started investing a little in Europe too. The signs are simply too clear.

For anyone really paying attention, a very scary picture of the future lies ahead - accept for those who have fallen on their knees before the cross, and trust what Scripture has revealed. It's even a little horrifying for us, but we have hope of a far better future, and understanding that God has a plan that He must work out.

Joe Agnello

Expected Imminently said...

Interesting!
We have just changed banks which will make a big difference to our pension. The bank is Spanish and called Santander, it has quickly made huge inroads into the UK.

Apart from that, I do hope you are aware that the EU is bailing out Iceland and Greece has just about collapsed, others are lining up as well. The Euro does not seem to be doing very well at all. (We still have the £ in the UK)

I know spades less than both of you, but I do hope you are cautious about investing in Europe - I wouldn't personally. If I was able to invest, I think I would look to Israel???
Sue

Anonymous said...

Personally, I would be VERY surprised if Europe took over as the global economic power. One world currency? Yes. Seat of the one world government? Yes. Political power? Yes. Economic engine for the rest of the world? Not so fast.

Keep in mind the United States is the single greatest consumer market in the world--by far. An economic collapse here means a HUGE (as in one the world has never seen) global recession and probably a collapse of every economy on the planet. What emerges after that collapse? I don't know. Here's hoping we are all gone by then.

The fact is, I would be very careful about investing into Europe.

Yes the U.S. currency will collapse and in fact it has to in order for the world to move to a one world currency. But there isn't a country on earth I can think of that would fare well in the short term (5-7 years) if that happened. Remember, we have a global economy now. Everything is interconnected and I would be very careful in thinking that a caticlysmic U.S. loss is somehow someone else's gain (in the short term).

It will create an economic environment like none the world has ever seen.

Joe Agnello said...

I'm not so sure you fully understand what I'm suggesting. I do think we are headed for a global financial collapse, but I don't necessarily think that our collapse will be Europe's gain. That's not really my point though anyway.

What I know from Scripture is that the Antichrist will control the entire globe, including its economy - he will control who buys and sells. We also know that he rises up from the people who destroyed Jerusalem, the Roman Empire. We see a clear picture of Rome reviving in the form of the EU.

I wouldn't base your investment strategy on anything I say. In fact, if we are as far along on the prophetic timeline as I have begun to think we are, I think our investments won't matter very much.

However, knowing that Europe becomes the leader of the world, and its economy too, it's certainly not a bad idea to invest there now in case we are here longer than I suspect we will be. I also would never invest everything I had there, nor here for that matter.

My main point though is please do not take the purpose of my comments as investment strategy, or strategy on how to survive during the global economic collapse. The purpose of my comments are to wake up as many people as possible to the reality of facing the Lord soon.

The time is really looking short. Of course even if this stage of human history goes on for 1,000 more years, each of our lifetimes are short, and so we need to spread the good news of salvation to as many people as we can before our time is up.

That's my only point, encouragement to share the Gospel, not financial strategy or any other startegy for that matter. We should be encouraged by the chaos around us, because the prophetic signs we are seeing should be pointing us to the soon return of Jesus Christ! If that's not encouraging, I dont know what is.

Joe Agnello

Scott said...

Joe

You actually said almost verbatim what I was going to say...

To add - I would be the last person to take any financial advice. But my understanding is that swiss annuities are the most conservative and safest bet - but beyond that I am beyond ignorant :)

I'm not sure the Euro is the best bet either.

To be honest, it probably doesn't matter a whole lot - a global financial collapse would affect everyone equally IMO.

I'm not looking at my bank account as much as I'm looking up to New Jerusalem, where we won't have to worry about $$$ anyway - Thank God (literally!)

Scott

Expected Imminently said...

I agree entirely that the unsettled world events are the birth pangs that herald the return of Jesus. Yessss!

Yet as we still need to occupy until He come, our hope and faith has to be grounded on facts, not knowing how long we have.

Whatever plans I HAVE to make to keep body and soul together, I will rejoicingly surrender as I rise heavenward. Indeed I dare not think about it too hard as it makes the plod of life unbearable.

THING's are very unsettled now the election is over. The Brits have shown we are not at all happy with our politicans. We may need another election in a years time as the Parliament is 'hung', meaning no party has a solid majority (the Conservatives have the biggest, overthrowing Labour).

Nick Clegg's Liberal Democrats failed miserably, YET, he seems to be the 'king maker' as he is in a position to side with, and influence whoever takes his fancy. So in a way Scott, you could be right about him being an a/c type. The outsider with the power to affect serious chsnge?
Sue

Joe Agnello said...

Sue, I'm so concerned for our brothers and sisters there. I know that there has been antagonism towards Christians there for some time, but the recent arrest of the street preacher in Workington, Cumbria is just such a wake up call to what's happening.

By the way, I do agree with you that we should keep our minds grounded on the basis that we will be here for a long time to come. We really don't know when our time is up, so we can't just abandon this life and move to the mountains or something ridiculous like that.

I pray for our world. People running our countries have no idea where they're going. If they would only stop rebelling and turn to Christ - but as we know, that won't happen.

Joe Agnello

Anonymous said...

I have enjoyed reading the discussion in the comments. The last comment made by Joe has me wondering, that if we as believers rise up in prayer to our great God, have faith in God that He can move mountains and effect nonbelieving leaders, and a trustworthiness in reaching out to nonbelievers -- I wonder what God would do? Would He hasten the day to The Wedding Feast or would He allow more days to pass to have more turn to Him?

Thanks for listening! Marantha!!
-- Sharon

Joe Agnello said...

Sharon, I've wondered the same thing. But then I think of this - what if God answered the prayers of Christians asking for His return, a moment before I got saved! What a horrifying thought.

As much as I would love for the Rapture to happen this very moment, God must have in mind more of our brothers and sisters whose eyes have yet to be opened. That thought gives me the patience I need to deal with the things we see around us.

I have to say though, it's very exciting to think we could be that generation!

Very good discussion here Scott, thanks for providing the forum.

Joe Agnello