Sunday, May 17, 2009

Goodbye Greenback?

Media recognize Obama's failure to support dollar
Report concludes: 'Demise may be only a matter of time'
Posted: May 15, 2009
12:41 pm Eastern © 2009 WorldNetDaily

Editor's Note: The following report is excerpted from Jerome Corsi's Red Alert, the premium online newsletter published by the current No. 1 best-selling author, WND staff writer and columnist. Subscriptions are $99 a year or $9.95 per month for credit card users. Annual subscribers will receive a free autographed copy of "The Late Great USA," a book about the careful deceptions of a powerful elite who want to undermine our nation's sovereignty.

The nation's media – finally – is recognizing and acknowledging what is happening to the U.S. dollar under the direction of President Barack Obama, Jerome Corsi's Red Alert reports.

In a clear sign the dollar collapse is so imminent that the mainstream media can no longer cover up the inept way the Obama administration has managed international economics, the New York Times finally published on Thursday an editorial declaring the end of the U.S. dollar is at hand.

"[The United States] is running huge budget and trade deficits, and is relying on the kindness of restless foreign creditors who are starting to feel uneasy about accumulating even more dollar assets," New York University economics professor Nouriel Roubini, commonly known on Wall Street as "Dr. Doom," wrote in the New York Times editorial published on Tuesday, May 13. "The resulting demise of the dollar may be only a matter of time."

Even more emphatically, the Telegraph in Great Britain picked up the story written by James Quinn, a Wall Street Journal correspondent.

Almost as if on cue, President Obama, in his town hall meeting in Rio Rancho, N.M., outside Albuquerque, on Thursday, May 14, 2009, declared that the current level of federal deficit spending was "unsustainable" and warned of skyrocketing interest rates if the U.S. government, of which he is the chief executive, continues to finance government by borrowing from other countries, according to a report published by Bloomberg.

"We can't keep on just borrowing from China," Obama told the Rio Rancho audience. "We have to pay interest on that debt, and that means we are mortgaging our children's future with more and more debt."

The only surprise here was that the Rio Rancho town hall meeting may have been the first time these realizations occurred to President Obama.

More likely, judging from the New York Times decision to publish the Roubini op-ed piece, the news was that the Obama administration was already at the point where the truth had to be confessed to the U.S. public, even though WND has been predicting these dire economic consequences for years and Red Alert has been sounding the warning since its inception last year.

As far back as 2006, WND asked the question whether the U.S. dollar was facing collapse.

WND has reported the true deficit of the federal government as measured by the U.S. Treasury according to generally accepted accounting principles, or GAAP methods, was $5.1 trillion in 2008, not the $455 billion previously reported by the Bush administration on a cash basis, and the GAAP negative net worth of the U.S. exceeds $65.5 trillion, an amount that exceeds the gross domestic product of the world.

WND has also reported the U.S. Treasury is planning to raise $2.5 trillion in debt in 2009 and an additional $4 trillion in 2010 to provide financing for the projected Obama administration deficits.

The massive amount of U.S. Treasury debt financing is projected to increase the $10 trillion national debt at the end of the Bush administration by 65 percent in just the first two years of the Obama administration.

In his New York Times editorial, Roubini admitted China's currency, the renminbi, is "far from ready to achieve reserve currency status." Still, he suggested correctly, "If China and other countries were to diversify their reserve holdings away from the dollar – and they eventually will – the United States would suffer."

In 2007, WND first reported China had made a major policy decision to hold a smaller percentage of their then-$1 trillion in foreign exchange reserves in U.S. dollar assets.

Roubini suggested the possibility China could begin borrowing and lending internationally in its own currency.

"The renminbi, rather than the dollar, could eventually become a means of payment in trade and a unit of account in pricing imports and exports, as well as a store of value for wealth by international investors," he wrote. "Americans would pay the price. We would have to shell out more for imported goods, and interest rates on both private and public debt would rise. The higher private cost of borrowing could lead to weaker consumption and investment, and slower growth."

China has already reduced the amount of US Treasuries they buy (this was reported some weeks ago). The governments of other nations simply no longer trust the US Dollar - and why should they? We lie and obfuscate and distort our "official" statistics, fiddle with the math, and everybody knows it. Neither the US government nor any corporation in the US is "too big to fail." The only question is how many others they will take down with them, not whether or not they can fail. We are not different than the empires that went before us. We're not special. We're not smarter. Technology just lets people make bigger mistakes faster - it's not a panacea for solving the world's problems. Any entity, no matter how big or small, cannot continue to spend more than it brings in - that's simply a fact. And China and the other world powers aren't going to keep throwing money down a rathole forever. If the budget isn't balanced and reformed to jettison unnecessary spending right now, other nations will simply do what they need to do to protect themselves and their capital - they just won't do business with us or with US Dollars anymore.

And there's not a $*%&^ thing we can do about it.

How will this affect our communities? A few thoughts come to mind. First and foremost, I imagine it will be required of all welfare/assistance/medical card recipients to prove they still (or ever did) really qualify. There will be a great deal more scrutiny into whether or not people are really married (a religious marriage will probably count, whether there is a legal state license or not) and their expenses will be examined to see what their income really is. Birth control may become a prerequisite for receiving benefits. Beneficiaries could also be required to enroll their children in public school so the state will have more contact and oversight of the family. These and other ideas have already been kicked around - it won't take much to convince the government to enact them.

There will be less federal government support for projects of just about any kind at the community level - the feds have their own priorities, and community projects should be the purview of the state and local governments (who are broke). Therefore our communities will not be able to look for grants and low-interest government loans.

Federal funds for education may disappear entirely (as that is, after all, a state and local function of government, not a federal one) or they may be severely curtailed. Federal, state, and local agencies that had been willing to work with religious preschools and day-schools in the past will be hoarding their available funds and will be far less cooperative.

Local governments, looking for revenue under every rock and cranny, will begin a vigorous movement to inspect properties and fine both individuals and businesses and religious institutions for building code and zoning violations, noise and parking violations, failures to follow food service regulations, and so on. Since most Chereidi communities have been very, very recalcitrant in obeying such civic laws, there will be an increase in surprise inspections, large fines, liens and foreclosures, and even arrests. Look for the Chereidi communities, in turn, to yell "anti-semitism" every other sentence.

Those are just a few things that come to mind. I'm sure there are more, but these are enough to get starting pondering what our communities should be doing to decrease dependence on aid and on the government.


SJ said...

The national debt as of as of May 7, 2009 is $11,256,266,640,050.20. If the national debt mattered in terms of the strength of the economy, don't you think everything would be all f###ed up by now? China is simply playing a game against the U.S. dollar because duh China and the USA are rivals.

I wouldn't worry about China because their per capita income sucks, their environment is f###ed up, the communist government's days are numbered there and history indicates that when there's a revolution in China things get ALL f###ed up, and as far as i'm concerned the only reason why China appears to have a badass economy is because the whole is equal/greater than the sum of its parts.

Ahavah Gayle said...

I genuinely hope you're right! This deflationary cycle is bad enough - a hyperinflation would be an absolute disaster (argentina, anyone)? But seriously, you know all those "austerity" measures that have been imposed on various third world nations that couldn't pay back their debts? Those measures pretty much wiped out all social services and public funding for anything other than debt payments for years on end - why do you think those could not be imposed on the US? If we don't voluntarily scale back, won't we just end up like the other IMF victims?

SJ said...

Naa inflation starts to be a problem the Federal Reserve will just decrease the money supply.