DID YOU EVER GET A CREEPY FEELING SOMETHING BAD IS ABOUT TO HAPPEN?

I do not pretend to be an economist, but when you're in a hurricane, you don't have to be a weather man to know which way the wind blows.  Am I the only one in the room that thinks there is a very real possibility of collapse of the US dollar?   We have been existing on past earned capital for a long time and time has run out.

In 2008, the Democrats were swept into power because Bush and the Republican Congress spent too much money and ran up the deficit, which they did. Since that time (January 09 though December 10) the Democrats have increased our federal Government by 25% and with it, the annual deficit four fold. This year’s deficit, the difference between what is brought in and what is spent, is projected at 1.6 trillion dollars. That’s 1,600 billion dollars of red ink in one year.   

The Case Shiller Real Estate Index last quarter showed real estate values fell across the entire country except one place, Washington, DC.   In other words,  while the private economy in the entire country is in free fall, the Federal Government is in such a huge expansion, pigging out at the public trough, expanding federal employees, government contracters and and lobbyists, that it has actually creating a mini real estate boom in Washington.  That is how the Democrats, "never let a crisis go to waste."

In order to raise the money to pay this staggering deficit, the government has been selling bonds at an alarming rate.  In 2009, Fed Chairman, Ben Bernanke, testified under oath before Congress that the Fed would never “monetize the debt” which means "print money" to finance the deficit. Unfortunately, the deficit has become too big to cover with bond sales; so the government has had to resort to the last and most extreme option: printing money.  In fact the Fed has been doing just that since last year; and, now the Fed’s purchases of government bonds with newly printed money accounts for 70% of government bond sales.  This means that the government can not sell its bonds and is essentially simply printing money to stay afloat.  Democrats claim this invented money creates jobs and will kick start the economy.  That hasn't happened, inflation has.

In order to  keep the inevitable results of this reckless policy from public awareness, the government has resorted to changing the yard stick of how to measure the economy. By the method used in the 1980's, the CPI is increasing at a rate of 10%, not the 2% being reported. Measured by the yardstick used in the 1930’s, unemployment is now at 20% not the 8.9% reported, and so on.(see: http://www.shadowstats.com/)

We have been able to get away with this slight of hand because the dollar is the world’s standard or "reserve" currency.   The dollar is rapidly losing its favored status and, without change, a collapse is inevitable.  The biggest bond mutual fund in the world, PIMCO, has quit buying US Treasury bonds and has dumped all of its holdings of US bonds.  Our creditor nations have already stopped buying US bonds. When they decide to sell the huge cache of bonds they hold, and world financial markets choose to no longer make transactions in US dollars, the jig will be up. The buying power of the dollar will cataclysmicly tumble. Savings will lose value and the cost of commodities will sore well beyond what we see now.  The dollars we have will be unable to purchase what we have always taken for granted, bountiful basic consumer commodities at a cheap price. The average Americans’ standard of living could plummet virtually overnight.

Because the Democrats broke the promise they made to stop the spending  and instead embarked on a new and ever more irrational and reckless spending spree, they were swept out of the house and the Republicans were given a huge majority in 2011. But, this is only one arm of government. The Democrats still control the Senate and the Presidency.  The 38 billion in "cuts" recently approved after weeks of wrangling, was nothing more than a tiny reduction from the dream budget Obama had submitted, but the Democrats never voted on in 2010.  (They refused to vote on this massive porker when they had absolute power, not wanting to do so without someone to blame). 

Republicans will use the debt ceiling extension coming up in May to get more concessions.  But the Wall Street Journal has reported that bankers have privately told the GOP leaders that, if they actually push it to a shut down, debt markets could be destabilized, i.e., US bond sales could cease triggering a crisis in the already shaky dollar.   In addition, this may trigger the major holders of outstanding debt, the Chinese and the Japanese, to dump US bonds. China has already become a net seller of US bonds (it holds over one trillion in bonds).  Japan is still a buyer , but the earthquake disaster and a US government shut down could make them a net seller.   The dumping of bonds will cause anyone holding dollars to sell which in turn will cause the dollar, which is on thin ice, to crash in value.

A quick compromise by the Democrats and Republicans to get the government going again, which will include minimal cuts, will be too late to stop the world wide stampede out of the dollar. The lack of bond buyers will cause the fed to have to print that many more dollars, exacerbating the situation.  Making matters worse, the Democrats will blame the Republicans' tight money policy and they will increase spending. A hyperinflationary spiral will ensue and your wealth will go with it. Food riots and general unrest could occur prompting the government to impose emergency draconian measures including marshal law and  a government take over of banking and huge sectors of industry.

If this happens, the United States could go from the world's leading Democracy and economic power to a socialist regime with a low standard of living.   Huge swaths of power will be ceded to an allegedly necessary central world banking and regulatory body in the name of economic stablility. The one world socialist dream of those currently in power in the Whitehouse and behind them will be fulfilled.  George Soros, the person most influential in this government, is on record saying that the US has too much world power and is the only country standing in the way of one world government.  He specializes in crashing currencies.   There is a very real possibility of Soros accomplishing his goal regarding the Ameican dollar in the near future.

Crony Capitalist In Chief

George Soros as God Creating Obama by Makim Makimovich:  See his other great work at Flickr Photo

Candidate Obama ran on a platform of increasing taxes on the rich to close the deficit. He also promised to end Republican supported loopholes that allow big corporations to escape taxes on profits made over seas and motivate the exportation of American jobs.  He did neither.

General Electric CEO, Jeff Imelt, was one of the biggest corporate supporters of and big donors to Obama’s presidential bid.  Imelt devoted two "news" organizations full time to pro Obama propaganda.  No one (other than big labor leaders and George Soros) has been closer to President Obama than Jeff Imelt.

On the campaign trail, candidate Obama repeatedly called for a national computerized medical record keeping system. Who would have guessed that GE makes just such a system. And even more coincidentally, the new Health Care legislation requires doctors and hospitals to implement something like it by 2014. The new health care bill provides billions to pay for the required upgrades.  Now that's real imagineering!

And how about the massive subsidies Obama and the Democrats pushed though Congress for wind and biomass electric generation equipment, which GE just happens to manufacture, as well as the huge subsidies for electric cars that will need the new GE electric recharge stations. Guess who makes those new green light bulbs we’re now required to buy at four times as much as the old incandescent ones with four times the profit margin per unit. GE of course. And one other thing, most of this stuff is manufactured by GE over seas, meaning your tax subsidies are going to pay for low cost foreign workers and high profit margins for GE that are not subject to US taxes. GE paid no Federal Corporate Income tax on its $14.5 billion in profit last year, thanks to special loop holes Obama promised to get rid of but never did. Now Obama has appointed Imelt as head of his economic advisers on creating American jobs. And, I am looking forward to his advice, since no one seems to be better at getting special favors from the government than Jeffrey Imelt.

Yet Imelt is not the only wealthy tycoon whose getting big favors from Obama.  George Soros gave many millions to the Democratic party and its candidates and he gives hundreds millions more each year to liberal tax exempt charitable organizations that serve as unofficial cheerleaders for the party agenda.  Soros has claimed both Hillary and Obama are his personal proteges, a claim neither disputes.  

No one has been more anti oil drilling in US waters or more supportive of environmental causes that limit American energy exploration than Democratic party sugar daddy, George Soros.  Somehow, in spite of his incredibly sincere concern about the environmental hazards of deep water drilling, Soros invested over $900 million in the giant state run Brazilian oil company. Petrobras, engaged in deep water drilling more than three times as deep as the BP horizon well.  And, amazingly coincidentally, just after the stock purchase, Petrobras got a billion dollar loan guarantee from the US government run Import Export Bank to fund offshore deep water drilling operations.  In addition Petrobras is one of only five companies issued a drilling permit in the Gulf since the total ban was lifted.

Shortly after these incredibly lucky events for Petrobras, Soros sold his interest and made millions on the turnaround.  Much of that profit will make its way into Democrat campaign funds to fight the nasty American oil companies destroying our environment.  If that weren't enough, it turns out Soros has a huge stake in Interoil, a Papua, New Guinea company that has made a promising  new find in that country.  Inexplicably a number of US government engineers have been dispatched to give technical advice to Interoil at US taxpayer expense while American companies complain that there are not enough such engineers to approve permits for drilling in American waters.
 
The Democrats raked in far more Wall Street money than Republicans in the last two election cycles. Most CEO’s and other top officers in the biggest Wall Street firms are progressive Democrats and donate ot  Democrat candidates liberally. Warren Buffet, Bill Gates and a host of other corporate and Wall Street Bankers, investors and CEO”s are Democrats.  

Astonishingly, contrary to all the evidence, many persist in believing the myth that the Republican Party is controlled by big capitalists while the Democratic Party is the "party of the people."  The facts are clear that the cronyism going on in the Obama administration makes Bush look like a populist reformer by comparison.   Excuses will be made for Obama and liberals will latch on to the next "man of the people" to promise them hope, change and a bunch of new federal programs to impose fairness on the greedy capitalists, and they will be astonished all over again to find that he's just another puppet of the wealthy tycoons they so richously love to hate.