Best of the Week
Most Popular
1. Gold vs Cash in a Financial Crisis - Richard_Mills
2.Current Stock Market Rally Similarities To 1999 - Chris_Vermeulen
3.America See You On The Dark Side Of The Moon - Part2 - James_Quinn
4.Stock Market Trend Forecast Outlook for 2020 - Nadeem_Walayat
5.Who Said Stock Market Traders and Investor are Emotional Right Now? - Chris_Vermeulen
6.Gold Upswing and Lessons from Gold Tops - P_Radomski_CFA
7.Economic Tribulation is Coming, and Here is Why - Michael_Pento
8.What to Expect in Our Next Recession/Depression? - Raymond_Matison
9.The Fed Celebrates While Americans Drown in Financial Despair - John_Mauldin
10.Hi-yo Silver Away! - Richard_Mills
Last 7 days
South Korea Coronavirus Outbreak Data Analysis Warning Rate of Infection is Exponential! - 26th Feb 20
Gold Price Long-term Trend Analysis Forecast 2020 - 26th Feb 20
Fake Markets Are on Collision Course with Reality - 26th Feb 20
Microsoft is Crushing the S&P 500, Secret Trait Of Stocks That Soar 1,000%+ - 26th Feb 20
Europe's Best Ski Resorts For The Ultimate Adventure - 26th Feb 20
Samsung Galaxy S20+ vs Galaxy S10+ Which One to Buy? - 26th Feb 20
Gold Is Taking on $1,700 amid Rising Coronavirus Fears - 26th Feb 20
Is This What Falling Through the Floor Looks Like in Stocks? - 26th Feb 20
Gold Minsky Moment Coming - 26th Feb 20
Why Every Student Should Study Economics - 26th Feb 20
Stock Market Correction Over? - 26th Feb 20
US Bond Market Yield Curve Patterns – What To Expect In 2020 - 25th Feb 20
Has Stock Market Waterfall Event Started Or A Buying Opportunity? - 25th Feb 20
Coronavirus IN Sheffield! Royal Hallamshire Hospital treating 2 infected Patients, UK - 25th Feb 20
Dow Short-term Trend Analysis - Coronavirus Trigger a Stocks Bear Market? - 24th Feb 20
Sustained Silver Rally Coming? - 24th Feb 20
Should Investors Worry about Repo Market and Buy Gold? - 24th Feb 20
Are FANG Technology Stocks Setting Up For A Market Crash? - 24th Feb 20
Gold Above $1,600 Amid FOMC Minutes and Coronavirus Impact - 24th Feb 20
CoronaVirus Pandemic Day 76 Trend Forecast Update - Infected 540k, Minus China 1715, Deaths 4920 - 23rd Feb 20 -
Ways to Find Startup Capital - 23rd Feb 20
Stock Market Deviation from Overall Outlook for 2020 - 22nd Feb 20
The Shanghai Composite and Coronavirus: A Revealing Perspective - 22nd Feb 20
Baltic Dry, Copper, Oil, Tech and China Continue Call for Stock Market Crash Soon - 22nd Feb 20
Gold Warning – This is Not a Buying Opportunity - 22nd Feb 20
Is The Technology Sector FANG Stocks Setting Up For A Market Crash? - 22nd Feb 20
Coronavirus China Infection Statistics Analysis, Probability Forecasts 1/2 Million Infected - 21st Feb 20
Is Crude Oil Firmly on the Upswing Now? - 20th Feb 20
What Can Stop the Stocks Bull – Or At Least, Make It Pause? - 20th Feb 20
Trump and Economic News That Drive Gold, Not Just Coronavirus - 20th Feb 20
Coronavirus COVID19 UK Infection Prevention, Boosting Immune Systems, Birmingham, Sheffield - 20th Feb 20
Silver’s Valuable Insights Into the Upcoming PMs Rally - 20th Feb 20
Coronavirus Coming Storm Act Now to Protect Yourselves and Family to Survive COVID-19 Pandemic - 19th Feb 20
Future Silver Prices Will Shock People, and They’ll Kick Themselves for Not Buying Under $20… - 19th Feb 20
What Alexis Kennedy Learned from Launching Cultist Simulator - 19th Feb 20
Stock Market Potential Short-term top - 18th Feb 20
Coronavirus Fourth Turning - No One Gets Out Of Here Alive! - 18th Feb 20
The Stocks Hit Worst From the Coronavirus - 18th Feb 20
Tips on Pest Control: How to Prevent Pests and Rodents - 18th Feb 20
Buying a Custom Built Gaming PC From Overclockers.co.uk - 1. Delivery and Unboxing - 17th Feb 20
BAIDU (BIDU) Illustrates Why You Should NOT Invest in Chinese Stocks - 17th Feb 20
Financial Markets News Report: February 17, 2020 - February 21, 2020 - 17th Feb 20
NVIDIA (NVDA) GPU King For AI Mega-trend Tech Stocks Investing 2020 - 17th Feb 20
Stock Market Bubble - No One Gets Out Of Here Alive! - 17th Feb 20
British Pound GBP Trend Forecast 2020 - 16th Feb 20
SAMSUNG AI Mega-trend Tech Stocks Investing 2020 - 16th Feb 20
Ignore the Polls, the Markets Have Already Told You Who Wins in 2020 - 16th Feb 20
UK Coronavirus COVID-19 Pandemic WARNING! Sheffield, Manchester, Birmingham Outbreaks Probable - 16th Feb 20
iShares Nasdaq Biotechnology ETF IBB AI Mega-trend Tech Stocks Investing 2020 - 15th Feb 20
Gold Stocks Still Stalled - 15th Feb 20
Is The Technology Stocks Sector Setting Up For A Crash? - 15th Feb 20
UK Calm Before Corona Virus Storm - Infections Forecast into End March 2020 - 15th Feb 20

Market Oracle FREE Newsletter

Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

U.S. Dollar Entering Free Fall Crash Territory

Currencies / US Dollar Sep 14, 2009 - 09:58 AM GMT

By: Larry_Edelson

Currencies

Best Financial Markets Analysis ArticleMartin’s off this week. So I’m writing you today from Asia with a passionate plea to our country — to its citizens and especially to our leaders in Washington.

We are now the laughing stock of Asia. Our dollars are no longer respected; our ambitions, no longer mimicked.


Our way of life, often based on consuming far beyond our means, is being flat-out rejected.

I can’t even exchange a $100 bill on the street here anymore: Most of the street money changers will take euros, Singapore dollars, even Chinese yuan. But fearful of losing their shirt with sinking exchange rates, they don’t want U.S. dollars.

Not long ago, I never traveled without my American Express card. Now, it sits in my office safe. Many in Asia no longer accept the card anymore. MasterCard and Visa are still OK, but they’re also losing market share to locally grown cards like Aeon.

The running joke in Singapore, Hong Kong, Bangkok, and Kuala Lumpur is that the U.S. is the place where even your pet could get a credit card or a home mortgage.

So to Asians, the crisis we’re going through is our own fault. And although it was also caused by blunders in Western Europe and other regions, truth be told, they are mostly right.

The message is clear: We need to immediately stop living beyond our means. But can we?

Consider the facts:

  • Through August, the federal deficit has already hit $1.38 trillion, or TRIPLE last year’s all-time record deficit of $454.8 billion. And in September alone, the administration expects another $200 billion in red ink, bringing the total for the year to $1.58 trillion.
  • The U.S. government’s official debt is now at an all-time high of $11.8 trillion. That’s over $100,000 for each and every household in America.
  • Both the administration and its opponents agree that, over the next 10 years, the cumulative federal deficit will be another $9 trillion, bringing the burden per household up to $177,000.
  • The Federal Reserve is also in hock up to its eyeballs, with more than $2 trillion in liabilities on its balance sheet. That brings the total burden up to $194,000 per household.
  • Perhaps worst of all, the unfunded government IOUs that are now starting to come due on Social Security, Medicare, and Federal pension payments are also ballooning higher and now stand at an estimated $104 trillion, or $886,000 per household.

Grand total: Each and every household in America is indirectly responsible for a debt burden of over 1 MILLION DOLLARS!

Bottom line:

Even assuming they can save 5 percent of their income year after year … and even assuming every single penny of their savings is thrown into the pot … in order to pay off the U.S. government’s debts and obligations, each American family — and descendents — would have to toil for the next 429 years.

Problem is, we haven’t borrowed all that money from ourselves. We’ve borrowed more than half of the outstanding national debt from overseas investors, who now fund fully 50 percent of our debt addiction.

But now …

America’s foreign creditors are haunted by the spectacle of Washington’s spending binge and are starting to recoil in horror.

That’s why in April, U.S. bond purchases by foreign central banks plunged 41 percent from the month before, while purchases by foreign private investors dropped 7 percent. All in a single month!

Yet even as investors flee in increasing numbers, our government continues to ramp up spending — trying to hawk even more U.S. debt to foreign lenders.

The Obama administration largely ignores the fact that overseas investors are getting tired of footing the bill for our borrow-and-spend addiction … and are also becoming increasingly skeptical of our ability to pay our debts.

The result: More foreign central banks, overseas fund managers, and investors flee, leaving the U.S. government with no choice but to pump out more and more unbacked paper dollars and dump them into the economy — further eroding their value.

Dollar falls 15.1% in just 6 months!

Central banks over the last year have been actively replacing portions of their dollar reserves with the euro, the Canadian and Australian dollars … and gold. China alone recently announced it has quietly increased its gold reserves by more than 75 percent over the last seven years.

So it should come as no surprise that the widely watched U.S. Dollar Index, a measure of the dollar’s performance against a basket of six of the world’s major currencies, has plunged 15.1 percent since its high of March 4.

As you can see from the accompanying chart, that now puts the greenback in free-fall territory.

It’s plunging against the euro, the Japanese yen, the British pound, the Swiss franc, the Canadian dollar.

It’s even sliding against the currencies of lesser-developed economies like the Thai baht, the Philippine peso, the Indian rupee, the Malaysian ringgit, the Indonesian rupiah, and the Vietnamese dong.

And it leaves …

The U.S. and All Americans Between a Rock and a Hard Place

Either …

  • U.S. consumers and the U.S. government must slash spending drastically, accepting a deeper economic decline or …
  • They will perpetuate the borrow-and-spend cycle, destroying the U.S. dollar and, ultimately, our standard of living.

I’d like to hear your thoughts on how we might get out from under this mess we find ourselves in — and, more importantly, what YOU are doing to protect yourself, your family, and your retirement from the dollar’s demise.

Just jump over to my personal blog to weigh in on this issue by clicking here.

Best wishes,

Larry

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit http://www.moneyandmarkets.com .

Money and Markets Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules