Friday, February 18, 2011

The Death Of The Dollar Is Coming

by The Warning Signs

When the Federal Reserve announced their plan to start a course of quantitative easing back in November 2008 it essentially signed the death warrant for the US dollar. Many top economists immediately denounced this course of action by Ben Bernake and have spent the last two years showing us why the Feds monetary policy is a recipe for disaster.

Trillions of dollars have been injected into our money supply since 2008 which is the reason the US Dollar has seen such a sharp decline in value. When the Fed announced their plan to start QE1 the dollar index was at 88.28, as of today, the dollar index is at 77.61. Some argue that this is not a big deal, but it is. As the dollar has steadily lost value foreign buyers of our national debt have started to see a once safe investment gradually turn into a risky investment. Not only have these foreign buyers slowed down on their purchasing of our debt, but many have started to sell of current holdings. That is why the Fed had to implement QE2, because our government spends way more every month that it brings in. But instead of addressing the problem and reigning spending the government turned to the Fed to pick up the slack. With QE2 we now have the Fed directly monetizing our national debt as foreign countries are no longer willing to carry us any longer.

As many of the economists who were critical of the Feds monetary policies from the beginning of QE1 have warned us, things are starting to spiral out of control.

As I pointed out above, the dollar is in a steady decline which will only worsen over time. Inflation is starting to climb up even though Bernake is telling the world other wise. But then again, he has no choice but to lie to the world. If he were to announce that yes indeed, things are as bad as they seem, it would spark a panic the likes of which you could not even imagine. So Bernake continues to kick the can down the road hoping to get a little more life out of our failing economy.

Here is an article from ZeroHedge commenting on the news that the Federal Reserve just ordered the 19 largest U.S. banks to test their capital levels against a scenario of renewed recession with unemployment rising above 11 percent. It appears the Fed knows that something really bad is coming down the pipe and they are worried.

Here is a good video for you to watch that shows just how quickly, once triggered, the dollar could collapse.

Of course no one knows for sure when or how the series of events will play out, but it is an almost certainty that the dollar will fail at some point in time. I only hope that when the day comes that you have taken the necessary steps to prepare yourself.

1 comment:


The dollars all ready dead.