“I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.” – Thomas Jefferson
The US Dollar has adopted a new name: The Incredible Shrinking Dollar. Despite a series of multi-billion dollar government “bailouts,” It continues to fall like an anchor from the sky. Even when oil was up to an all time high the dollar was low. Critics credit the “Fall of the U.S. Economy” largely to the cyclical divergence between America’s economy and the rest of the world.
America’s foreign debt exceeds $3 trillion and foreigners own over $1.4 trillion of its Treasury and mortgage debt. In addition, the country’s annual account deficit is more than $700 billion and it prints over $600 billion per year to keep the charade – extravagant spending – going. This raises a serious concern: Is there any gold left at the US Gold Reserve in Fort Knox? The location is currently controlled by the Federal Reserve “for profit” organization, and the US Government hasn’t allowed a public audit of the facility since Eisenhower Administration in the 1950s.
There is high anxiety among Americans, and rightfully so. The scare is more about a steady stream of failed multi-billion-dollar “bailouts” than bad mortgage loans and their baleful effect on the credit market. France’s president, Nicolas Sarkozy said the global crisis could lead to “an economic war.”
The global financial situation is bad. But no one will admit how bad it really is. One thing certain is that a full-blown dollar crisis on top of a credit crunch and a continuous weakening economy will choke off a recover and inevitably lead to total collapse of the US Dollar in 2009.