Time to Dump the Dollar

Dick Morris

I have been talking about the coming hyperinflation for the past 100 days, but I have never expressed this so will as my favorite Democrat, Dick Morris has done in the following article.  The world currency was the British Pound because the international banks were in London, but it switched to the Dollar because the Dollar was more stable and backed by Gold.  Today it is just backed by trust in the American economy, but this is ending.  The fear of the future has made the average American, who spent 108% of their income for the last 10 years, to saving 5% of their income in the last 6 months.

Americans cannot stop using their Dollars for day to day needs but they can get rid of the Dollar for their savings and future and I highly recommend this, even to the point of getting rid of their retirement money and transferring it to Gold.  Read below to see why.

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Hyperinflation will be the biggest crisis to ever hit America and it will come as a direct result of President Obama, Congress and the Federal Reserve trying to prevent a much needed recession.

The millions of baby-boomers getting ready to retire and planning to live off of their savings and pensions will soon need to rethink their plans. We are about to see a collapse in the value of the U.S. dollar that will wipe out the wealth of all Americans who don't take steps to prepare immediately.

A couple weeks ago, Congress used insignificant AIG bonuses to distract America while the Federal Reserve expanded its balance sheet by $1 trillion in a single day. When the Federal Reserve expands its balance sheet, it is doing nothing more than printing money out of thin air. When the Federal Reserve prints money, everybody with dollars loses their purchasing power.

$13.1 trillion has already been allocated by the Federal Reserve and U.S. Treasury during the financial crisis for bailouts and stimulus's. Although only $2.8 trillion has actually been spent so far, we believe the entire $13.1 trillion will inevitably be spent and it is just the tip of the iceberg.

Our country already has an $11.1 trillion national debt and $55 trillion in unfunded liabilities for social security, medicare and other social programs. Combined with the bailout and stimulus allocations, the U.S. is now in the hole for close to $80 trillion.

($80,000,000,000,000 divided by 130,000,000 American families = $615,384.00 per family.

We may have an annual GDP of close to $14 trillion, but more than 70% of it is consumer spending. In order to pay back our debts, we need to produce real things to export to the rest of the world. Our largest exports, besides U.S. Treasuries, are scrap metal and paper we send back to China so that they can produce more junk for us to consume with the money they lend us.

With China planning their own $586 billion stimulus, they could become a net seller of U.S. Treasuries at the same time as the U.S. is looking to sell trillions of dollars in new ones. The only buyer for U.S. Treasuries will soon be the Federal Reserve and the world will eliminate the dollar as the reserve currency.

The dollar became the reserve currency because it was backed by Gold. Today, it is backed by nothing but faith and confidence that it will always be accepted as money. For the world to have faith and confidence in the dollar, its supply must be kept scarce. Clearly, the only way our debts will be paid back is if they are monetized; and soon the world will be flooded with dollars.

Today, despite massive monetary inflation by the Federal Reserve, we still have low commodity and consumer good prices due to temporary forces pushing prices down such as forced liquidations of hedge funds, deleveraging of banks and going out of business sales of retail stores. These temporary forces will soon be gone and the huge buildup of dollars being hoarded on the sidelines will come out all at once.

In 1980, Federal Reserve Chairman Paul Volcker was able to get inflation under control by raising interest rates to 20%. Back then, we were the world's largest creditor nation. Today, we are the world's largest debtor nation and if interest rates rise to 20% once again, just the interest on our national debt will be over $2.2 trillion per year. If you think a budget deficit of $2 trillion this year is bad, you have seen nothing yet.

As the dollar begins to collapse, it will cost more to run every government agency. As the Federal Reserve increases the rate at which it prints money, it will eventually precipitate a downward spiral in the dollar. We could be looking at budget deficits of tens of trillions, if not hundreds of trillions or quadrillions of dollars five to ten years from now.

The only way to protect yourself is to become your own central bank. You need to get out of the dollar and into real assets like Gold and Silver. We believe a boom is coming in Gold and Silver that will make the dot-com and Real Estate booms look small in comparison. Gold's high in 1980 of $850 per oz adjusted for inflation would be about $2,300 per oz in today's dollars. Even Warren Buffet, who is a huge supporter of Obama, is now saying that the U.S. will soon see inflation worse than the 1970's.

At the NIA, we are dedicated to preparing Americans for Hyperinflation and helping Americans not only survive, but prosper in the upcoming hyperinflationary crisis. We believe it is an opportunity to become wealthy as most Americans go broke. Our newsletter is free to join at Inflation.us. Each week we will send you our latest article about the economy and a new stock suggestion of a company we believe will prosper in a hyperinflationary environment. All of our stock suggestions are completely unbiased and typically we profile profitable Gold, Silver, and Agriculture companies with strong balance sheets.

The next company we will be profiling on Tuesday, has world-class mineral assets right outside of China and could be sitting on the largest untapped Gold and Copper resource in the world. An investment agreement between the company and the government of the country they are in is expected to be signed shortly. The company has a joint venture with the second largest mining company in the world which should allow them easy access to the capital needed to develop their project.

Be sure to sign-up for the free NIA newsletter at Inflation.us immediately and please read our recent articles about how to survive hyperinflation in the U.S., why you better not be the last person out of the dollar, and why we will soon see the perfect hyperinflationary storm.


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