By Ray Wolbrecht.
Watching a documentary, The End of the Road, a few weeks ago confirmed what many have already known and sensed about our currency situation: We are being shafted by our government in so many ways and one of these is what they have done to create the inevitable currency crisis.
When Congress tells the U.S. Treasury that they need money to pay for the nation’s expenses and the Treasury says the tax revenues are exhausted, then Congress, which can’t raise taxes without a population riot, tells the Treasury to borrow the money. The Treasury calls the Federal Reserve (FR) which is composed of a nebulous association of large banks given special powers, and tells them they need a loan. Then the FR calls up the US Mint and the mint prints money ($85 billion /month). Then the treasury gives the FR IOUs which the FR turns into treasury bonds and sells them to investors. So that’s how the national debt is created.
Now we have a national debt of $17 trillion. It was a big deal when the debt hit $1 trillion during Reagan’s administration. Forty cents of every dollar spent is borrowed. Why does a silver dollar minted in 1921 cost upwards of $17? Inflation, the devaluation of the dollar. You see it in the grocery store too.
To think of this in its worst terms, this currency is used to finance war and clandestine behavior on the part of the State and Defense departments.
This printed currency which is NOT money, is called fiat money (the government declares it to be money) and fiat money for every country that has ever tried it has a 100% rate of failure. Yes, this fiat currency will fail in time and that time is on the horizon. Hyperinflation is the result. Ask Argentina and Zimbabwe how they like it.
Like the Gary Larson comic strip of the cows in the field. One cow raises up on the hind feet with eyes as large as a bronc rider’s belt buckle. She’s just awakened to a revelation and declares, “This is grass! We’ve been eating grass!”
So it will be when the public finally recognizes what has happened to the currency that has been printed with nothing but debt to back it up. And those entitlement and Social Security checks when cashed will buy very little. Thus begin the riots. Who will fix this problem? The politicians who created it?
The documentary says the U.S. economy will survive the collapse because our economy is so strong. For those who have prepared and have their wealth stored in tangible assets (real estate, silver, a bushel of potatoes) and not as a number in a savings account or retirement fund, there will be some fantastic deals to be made. It will be the largest redistribution of wealth this country has ever experienced. Personal debt will be wiped out when paid off with worthless currency. When the U.S. trims its budget, starts living within its means, and begins to print currency with a backing by tangible assets, only then will this newly printed currency be called money again. With the right leaders we will emerge from this disaster at the most financially healthy country on the planet.
How does one prepare for this disaster and take care of himself and his family? The internet has the answers.
It boils down to this: Who do you choose to believe?
Ray Wolbrecht is a dentist who lives in Kyle.
