Dollar

A Dollar Collapse? No Way – The U.S. Dollar Rocks! (Propaganda)

Are we on the verge of a dollar collapse?  Don’t believe the skeptics.  The truth is that there is no currency in the world that is stronger than the old greenback.  The U.S. dollar is the reserve currency of the world.  Virtually all of the nations on the face of the earth use it for trading and they always will.  Why?  Because the U.S. dollar is awesome.  No currency on earth can compete with our awesomeness.  So what that the dollar hit a new all-time record low against the Swiss franc today?  Do you really want to move over with the Swissies and eat chocolate and make watches?  No, you want to live in the land of American Idol, the NFL and apple pie – the good old USA.  Who cares if it takes about a dollar and a half to buy a single euro now?  Do you really want to go live with the Frenchies and eat a bunch of French bread while you wear a beret every day?  Of course not.  There isn’t going to be a dollar collapse.  As long as the USA is still number one the rest of the world is still going to need U.S. dollars.  So quit your worrying.

The other day all of the “doom and gloomers” were crying that the sky was falling because the U.S. dollar had fallen for 8 trading days in a row.  They were proclaiming that the “end of the dollar” was near because the dollar index was approaching a new record low.

The following is how an article from yesterday in the Washington Post described the recent slide of the dollar….

The dollar has fallen against a basket of six major currencies — the euro, Japanese yen, British pound, Canadian dollar, Swiss franc and Swedish krona — for the past eight trading days. That measure struck its lowest point since July 2008 on Monday, at 72.72. It hit bottom in April 2008 at 71.33. Its highest point since the euro’s creation was 120.92 in July 2001.

Well guess what?

The dollar index moved back up today.

That is what happens – currencies go up and currencies go down.

There is no need to get your pants in a twist over it.

When the U.S. dollar goes down, it makes our products more affordable overseas.  When other nations buy more of our stuff that helps our businesses.

So when the dollar declines a little bit that is nothing to be alarmed about.

So far in 2011, the U.S. dollar has only lost about 6.5 percent of its value.

Should we be freaking out about a measly 6.5 percent?

I don’t think so.

Do you want an even “scarier” number?

The dollar has fallen by 17 percent compared to other major national currencies since 2009.

Oooooooooohhhhhhhhhhhh – are you frightened out of your mind yet?

You better run outside Chicken Little – the sky might be falling.

The problem is that there are so many tinfoil hat wearing conspiracy theorists running around declaring that the U.S. dollar is dying that some people are actually starting to believe it.

Do you want proof that the U.S. dollar is going to be just fine?

Here you go….

Just check out what U.S. Treasury Secretary Timothy Geithner recently told the Council on Foreign Relations….

“Our policy has been and will always be, as long as I will be in office, that a strong dollar is in the interest of the country.”

Bam!

You have the very words of the U.S. Treasury Secretary right there.

He has promised the we “will always” have a strong dollar policy.

Geithner has said it and that settles it.

Any questions?

Who are you going to believe?  Are you going to believe the U.S. Treasury Secretary or are you going to believe a bunch of crazy Internet bloggers with blogs with titles such as “Economic Disaster” and “The American Dream Has Been Flushed Down The Toilet”?

Let’s get real.

The U.S. dollar is just fine and there is not going to be some mythical “dollar collapse”.

But isn’t the price of gasoline going up?

Sure it is.

But that isn’t the fault of the Federal Reserve.  They don’t set prices for gasoline.

The reality is that prices for different things go up and down.  That is what a free market economy looks like.

Right now the price of gasoline is actually lower than it was back in 2008….

So shouldn’t we actually be talking about falling gasoline prices?

I don’t know about you, but I sure am glad to be paying less for gasoline than I was back in mid-2008.

But the tinfoil hat crowd will “cherry pick” statistics to make it seem like things are worse than they really are.  They will break out scary sounding statistics such as the fact that over the past 12 months the average price of gasoline in the United States has gone up by about 30%.

LOL – cry me a river.  Life is tough.  People will cry over just about anything these days.

Who really cares that the average American driver will spend somewhere around $750 more for gasoline in 2011?

That is just a sign that the economic recovery is in full swing.

Do you know how much all of that money is going to help our oil companies?

They are going to be swimming in cash, and all of that wealth will “trickle down” and help out the folks on main street.

You would think that the half-crazed economic bloggers out there would be thrilled by all of this, but no – they just keep trotting out the “inflation boogeyman” over and over and over.

Well, you know what?

According to no less of an authority than Federal Reserve Chairman Ben Bernanke, we basically have close to zero inflation in the United State right now.

You believe the Federal Reserve, don’t you?

If not, there is probably something wrong with you.

Unfortunately, we have got a whole bunch of these self-proclaimed “experts” (who are really just legends in their own minds) running around proclaiming that inflation is not calculated the same way that it used to be.

Well, you know what?  They are right.  But it isn’t some great conspiracy.  The truth is that we have “improved” the way that inflation is calculated 24 times since 1978.

The government is always trying to become more accurate.

What is wrong with that?

But today we have a bunch of amateurs running around trying to tell us what the “real” rate of inflation actually is.

For example, a New York post analysis claims that the rate of inflation in New York City has been about 14 percent over the past year.

So how many prices did they measure?

A dozen?

Two dozen?

Who are you going to trust more – the Federal Reserve or the New York Post?

Perhaps the New York Post should just stick to reporting on the latest Elvis sighting and leave economics to the big boys.

If hack reporting by publications like the New York Post wasn’t bad enough, we’ve also got numbskulls like John Williams from a website called “Shadow Government Statistics” running around proclaiming that the sky is going to fall because of U.S. government debt.

The following is a sampling of the smelly stuff that Williams is spreading around….

S&P is noting the U.S. government’s long-range fiscal problems. Generally, you’ll find that the accounting for unfunded liabilities for Social Security, Medicare and other programs on a net-present-value (NPV) basis indicates total federal debt and obligations of about $75 trillion. That’s 15 times the gross domestic product (GDP). The debt and obligations are increasing at a pace of about $5 trillion a year, which is neither sustainable nor containable. If the U.S. was a corporation on a parallel basis, it would be headed into bankruptcy rather quickly.

Does anyone actually believe any of that nonsense?

How long has Williams been predicting that U.S. government finances are going to collapse?

Yes, he has been doing it for a very, very long time.

Has the sky fallen yet?

Are we living in an economic wasteland?

Has there been a U.S. dollar collapse?

No.

Look around you – everything is just fine.

Every time the U.S. economy has had a recession in the past, what has happened?

The economy has recovered and has gotten larger than ever.

And that is exactly what is happening again.

But sadly, there are more Americans than ever that actually believe that we are headed for economic disaster.  In fact, there are some websites where they actually debate what the best place to live in the United States will be when the “economic collapse” happens.

Can you believe that?

People need to grow up.

Yes, the U.S. government is in debt.  That should be no surprise.  U.S. government debt is normal.  The truth is that our financial system is designed to have U.S. government debt constantly expand and for there to always be a little bit of inflation in the system.

When the U.S. government goes into more debt, more money is created.  If there was no debt in our society there would be no money.

So all of these bozos that claim that they want to get rid of all government debt don’t know what they are talking about.

We need to trust that the experts over at the Federal Reserve know what they are doing.  The prudent moves by Ben Bernanke have helped the economy to recover after the horrible financial crisis of 2008.  Instead of being criticized, he should be commended.  There is a reason why he was named “Person of the Year” by Time Magazine in 2009.

The Federal Reserve is watching inflation.  If it starts spiking up a little bit they will stomp it out.  They know what they are doing.

This is 2011 – the people running things were produced by some of the greatest academic institutions on the planet.  Nothing is going to catch them by surprise.  They know exactly what our problems are and how to solve them.

So quit listening to the tinfoil hat crowd.  Yes, the U.S. dollar will fluctuate a little bit relative to other major currencies.  That is nothing to be alarmed about.

There is not going to be a dollar collapse so stop waiting for one.  The U.S. dollar is always going to be the greatest currency on earth.  Why?  Because the United States is the greatest nation on earth.

After all, what other nation on earth could produce Justin Bieber, Jim Carrey, Simon Cowell, Pamela Anderson, Catherine Middleton, Michael J. Fox, Seth Rogen, Brendan Fraser, Jason Priestly, Tom Green, Ryan Reynolds, Mike Myers, Kiefer Sutherland, Howie Mandel, Keanu Reeves and William Shatner?

——————–

Hopefully by now you have figured out that this is a satirical piece demonstrating how ridiculous much of the propaganda in the mainstream media really is.  Thank you for taking the time to read my twisted attempt at humor.

24 Signs Of Economic Decline In America

The United States is in the middle of a devastating long-term economic decline and it is getting really hard to deny it.  Over the past year I have included literally thousands of depressing statistics in my articles about the U.S. economy.  I have done this in order to make an overwhelming case that the U.S. economy is in deep decline and is dying a little bit more every single day.  Until we understand exactly how bad our problems are we will never be willing to accept the solutions.  The truth is that our leaders have absolutely wrecked the greatest economic machine that the world has ever seen.  Most Americans just assume that we will always experience overwhelming prosperity, but that is not anywhere close to the truth.  We are not guaranteed anything.  Our manufacturing base has been gutted, the number of jobs is declining, more Americans are dependent on government handouts than ever before, our dollar is dying and as a nation we are absolutely drowning in debt.  The economists that are trumpeting an “economic recovery” and that are declaring that the U.S. economy will soon be “better than ever” are delusional.  We really are steamrolling toward a complete and total economic collapse and our leaders are doing nothing to stop it.

The following are 24 more signs of economic decline in America.  Hopefully you will not get too depressed as you read them….

#1 On Monday, Standard & Poor’s altered its outlook on U.S. government debt from “stable” to “negative” and warned the U.S. that it could soon lose its AAA rating.  This is yet another sign that the rest of the world is losing faith in the U.S. dollar and in U.S. Treasuries.

#2 China has announced that they are going to be reducing their holdings of U.S. dollars.  In fact, there are persistent rumors that this has already been happening.

#3 Hedge fund manager Dennis Gartman says that “panic dollar selling is setting in” and that the U.S. dollar could be in for a huge decline.

#4 The biggest bond fund in the world, PIMCO, is now shorting U.S. government bonds.

#5 This cruel economy is causing “ghost towns” to appear all across the United States.  There are quite a few counties across the nation that now have home vacancy rates of over 50%.

#6 There are now about 7.25 million less jobs in America than when the recession began back in 2007.

#7 The average American family is having a really tough time right now.  Only 45.4% of Americans had a job during 2010.  The last time the employment level was that low was back in 1983.

#8 Only 66.8% of American men had a job last year.  That was the lowest level that has ever been recorded in all of U.S. history.

#9 According to a new report from the AFL-CIO, the average CEO made 343 times more money than the average American did last year.

#10 Gas prices reached five dollars per gallon at a gas station in Washington, DC on April 19th, 2011.  Could we see $6 gas soon?

#11 Over the past 12 months the average price of gasoline in the United States has gone up by about 30%.

#12 Due to rising fuel prices, American Airlines lost a staggering $436 million during the first quarter of 2011.

#13 U.S. households are now receiving more income from the U.S. government than they are paying to the government in taxes.

#14 Approximately one out of every four dollars that the U.S. government borrows goes to pay the interest on the national debt.

#15 Total home mortgage debt in the United States is now about 5 times larger than it was just 20 years ago.

#16 Total credit card debt in the United States is now more than 8 times larger than it was just 30 years ago.

#17 Average household debt in the United States has now reached a level of 136% of average household income.  In China, average household debt is only 17% of average household income.

#18 The average American now spends approximately 23 percent of his or her income on food and gas.

#19 In a recent survey conducted by Deloitte Consulting, 74 percent of Americans said that they planned to slow down their spending in coming months due to rising prices.

#20 59 percent of all Americans now receive money from the federal government in one form or another.

#21 According to the U.S. Bureau of Labor Statistics, the average length of unemployment in the U.S. is now an all-time record 39 weeks.

#22 As the economy continues to collapse, frustration among young people will continue to grow and we will see more seemingly “random acts of violence”.  One shocking example of this happened in the Atlanta area recently.  The following is how a local Atlanta newspaper described the attack….

Roughly two dozen teens, chanting the name of a well-known Atlanta gang, brought mob rule to MARTA early Sunday morning, overwhelming nervous passengers and assaulting two Delta flight attendants.

#23 Some Americans have become so desperate for cash that they are literally popping the gold teeth right out of their mouths and selling them to pawn shops.

#24 As the economy has declined, the American people have been gobbling up larger and larger amounts of antidepressants and other prescription drugs.  In fact, the American people spent 60 billion dollars more on prescription drugs in 2010 than they did in 2005.

Inflation Is Here – Just Open Up Your Eyes And Look At These 5 Financial Charts!

Despite what Federal Reserve Chairman Ben Bernanke says, rampant inflation is officially here.  The federal government is constantly monkeying with the numbers to keep the “official” rate of inflation below 2 percent, but it is becoming very difficult to deny that the cost of almost everything is really going up these days.  The American people are not stupid.  They notice the difference when they go to the grocery store or stop at the gas station.  The dollar is losing value rapidly now.  The price of gold set another new all-time record today and is currently hovering just above $1430 an ounce.  The price of West Texas crude has moved above 100 dollars several times recently and the price of Brent crude is currently above 116 dollars.  These higher oil prices are really starting to be felt in the United States.  The average price for a gallon of gasoline in the United States has now reached $3.38.  There are some gas stations in the U.S. where the price of a gallon of gas is already over 4 dollars.  But it is not just the American people that are feeling the pain.  The global price of food recently hit a new record high and almost every major agricultural commodity has absolutely skyrocketed in price over the past 12 months.  Meanwhile, Ben Bernanke just told the Senate Banking Committee that he really isn’t concerned about inflation at all.

When it comes to inflation, the key is not to look at the official U.S. government numbers (they are highly manipulated) or how the U.S. dollar is performing against other major currencies (because they are all being devalued as well).  Instead, you can get a truer sense of what is really happening to inflation by looking at what the U.S. dollar is doing against precious metals, commodities and other hard assets.

So are we experiencing rampant inflation right now?  Well, just open up your eyes and look at these 5 charts….

1 – The price of oil is racing back up to record levels.  The chart below from the Federal Reserve is a couple weeks out of date.  As noted above, the current price of West Texas crude is about $100 a barrel….

2 – The price of a gallon of gasoline in the United States seems destined to hit a brand new all-time record at some point this year.  Was it really just a few short years ago when the average price of gas in this country was about a dollar a gallon?….

3 – The value of most precious metals is very consistent over time.  So when you see precious metals go up dramatically in price, it means that the dollar is being devalued.  The price of gold just set another new all-time high and it seems destined to keep going even higher….

4 – The chart below from the Federal Reserve is a measure of the price of all commodities.  These price increases are inevitably going to be passed along to consumers in the United States….

5 – After a couple of years of stable food price, the price of food is starting to take off yet again….

In fact, many analysts are warning that we could experience a major food crisis over the next couple of years.  The global demand for food continues to grow at a very brisk pace, but all of the crazy weather we have been having around the world has caused some very bad harvests.

Unfortunately, the global price of food has gone up substantially in recent months and it is likely to keep going up very rapidly.  Just consider the following five facts….

#1 The United Nations says that the global price of food hit another new all-time high during the month of January.

#2 The price of corn has doubled in the past six months.

#3 The price of wheat has roughly doubled since the middle of 2010.

#4 According to Forbes, the price of soybeans is up about 50% since last June.

#5 The United Nations is projecting that the global price of food will increase by another 30 percent by the end of 2011.

Ouch.

But isn’t there some good economic news?

Yes, there is, but before we cover it, it is important to keep in mind that in an inflationary environment almost all economic numbers go up.

For example, during the recent hyperinflation in Zimbabwe stocks went up like crazy and “economic growth” statistics were very impressive.

Why?

Because those numbers were measured in currency units that were being devalued at a blinding pace.

So please keep that in mind when you hear “good economic statistics” on the evening news.

The truth is that in an inflationary environment such as we have now entered into almost all economic numbers should be going up.

So what is the good news?

Well, last month all three major U.S. car companies reported strong sales gains.  Sales of GM vehicles were up 49%, sales of Chrysler vehicles were up 13%, and sales of Ford vehicles were up 10%.

But just because a few pieces of good economic news come floating our way does not mean that we should forget all of the horrific long-term economic trends that are tearing this country apart.

The truth is that we are still a nation that is absolutely drowning in debt.

For example, it was just announced that China now owns 1.16 trillion dollars of U.S. government debt.

The borrower is the servant of the lender.  We should never forget that.

Also, the U.S. economy is slowly but surely becoming of less importance on the global stage.

In 1985, America’s share of global GDP was 33%.  Today, it is just 24%.

Our nation is rapidly being deindustrialized and we are becoming deeply dependent on industrial production from other nations.

Did you know that the new World Trade Center that is being constructed on the site of the September 11, 2001 attacks is going to be made from German steel and Chinese glass?

That says a lot about where we are at as a country.

We have allowed so much of our industrial infrastructure to be exported to China where workers slave away in almost unbelievable conditions.

A reader named Rish recently described what things are like over there….

As a product developer I went to china and saw the way the factory workers lived and worked in person. 50$ a month is about right, but if you are a skilled quality control expert you might make as much as 150$. at least this was true about 2 years ago the last time I went. The barracks were pretty meager, bunk beds with just plywood, no mattresses, if you wanted you could go to a store just outside the factory gate and buy a thick comforter that they sell as a “mattress” .

It will be interesting to see how the next few years changes the face of the USA. Who knows? if the unemployment rate and lack of jobs keeps going and enough people become homeless, we might become the next Bangladesh, and people will be lining up of the 30 cents an hour corporate factory jobs, and living in barracks just like those…

The only way the U.S. has been able to “thrive” during this deindustrialization is by borrowing gigantic amounts of money.  But all of this borrowing is slowly but surely destroying the U.S. dollar, and we are getting closer to the point of absolute catastrophe.

Peter Schiff recently shook folks up when he talked about these issues during a recent interview on CNBC….

But it is not just the United States that is printing tons and tons of money.  All of the major industrialized nations have been firing out gobs of currency.  That is a huge reason why so many investors have been racing to get into hard assets recently.

Now Ben Bernanke and other top Federal Reserve officials have been dropping hints that more quantitative easing may be necessary.

Unfortunately, just like with any other addiction, once you give in a few times it becomes easier and easier to engage in destructive behavior.  Now that the Fed has gotten a taste for quantitative easing it is going to be really hard to stop.

Nor can the Fed stop at this point.  If they did it would be disastrous for the U.S. economy.  But if the Fed continues on this reckless course it will make the eventual collapse of our economy even worse.

Under our current debt-based system there is no way out.  The Federal Reserve can attempt to put off the inevitable for a while by pumping up the debt bubble even more, but at some point it is going to burst.

When that happens we are going to be facing a financial crisis which will blow what happened in 2008 completely out of the water.

So enjoy these good economic times while you still can.  This is about as good as things are going to get from here on out.

5 Dollar Gas? Get Ready To Pay An Arm And A Leg For Gasoline

One of the quickest ways to bring down the U.S. economy would be to dramatically increase the price of oil. Oil is the lifeblood of our economic system. Without it, our entire economy would come to a grinding halt. Almost every type of economic activity in this country depends on oil, and even a small rise in the price of oil can have a dramatic impact on economic growth.  That is why so many economists are incredibly alarmed about what is happening in the Middle East right now.  The revolution in Libya caused the price of WTI crude to soar more than 7 dollars on Tuesday alone.  It closed at $93.57 on Tuesday and Brent crude actually hit $108.57 a barrel before settling back to $105.78 at the end of the day.  Some analysts are warning that we could even see 5 dollar gas in the United States by the end of the year if rioting spreads to other oil producing nations such as Saudi Arabia.  With the Middle East in such a state of chaos right now it is hard to know exactly what is going to happen, but almost everyone agrees that if oil prices continue to rise at a rapid pace over the next several months it is going to have a devastating impact on economic growth all over the globe.

Right now the eyes of the world are on Libya.  Libya is the 17th largest oil producer on the globe and it has the biggest proven oil reserves on the continent of Africa.

Libya only produces 2 percent of the oil in the world, but with global supplies so tight at the moment even a minor production disruption can have a dramatic impact on the price of oil.

Before this crisis, Libya was producing approximately 1.6 million barrels of oil per day.  Now the rest of the world is wondering what may happen if revolution spreads to other major oil producing nations such as Kuwait (2.5 million barrels of oil per day) or Saudi Arabia.

Saudi Arabia produces 8.4 million barrels of oil a day.  It produces more oil than anyone else in OPEC.

If revolution strikes in Saudi Arabia and a major production disruption happens it could be catastrophic for the global economy.

David Rosenberg, the chief economist at Gluskin Sheff & Associates, is warning that if there is major civil unrest in Saudi Arabia we could end up seeing oil go up to $200 a barrel….

“If Libya can spark a $10-a-barrel response, imagine what a similar uprising in Saudi Arabia could unleash. Do the math: we’d be talking about $200 oil.”

200 dollar oil?

Don’t laugh – it could happen.

In fact, if it does happen the global economy would probably go into cardiac arrest.

The truth is that if the flow of oil from Saudi Arabia gets disrupted there is not enough spare capacity from the rest of the globe to make up for it.

Paul Horsnell, the head of oil research at Barclays Capital, recently said that the world does not currently have enough spare capacity to be able to guarantee that an oil “price shock” will not happen….

“The world has only 4.5m barrels-per-day (bpd) of spare capacity, which is not comfortable.”

Horsnell also said that even in the midst of potential supply problems, the global demand for oil continues to grow at a very robust pace….

“In just two years, the world has grown so fast as to consume additional volume equal to the output of Iraq and Kuwait combined.”

For now, Saudi officials are saying all the right things.  They say that there will be no revolution in Saudi Arabia and that there are not going to be any supply problems.

For example, Saudi Arabian Oil Minister Ali al-Naimi recently announced that the rest of the world should not worry because his country is definitely going to be able to make up for any shortage in the global supply of oil….

“What I would like you to convey to the market: right now there is absolutely no shortage of supply.”

But what happens if revolution comes to Saudi Arabia?

Suddenly the whole game would change.

But even with a peaceful Saudi Arabia the price of gasoline in the United States is already rising to alarming levels.

The average price of gasoline in the United States reached $3.14 a gallon last week.  This closely mirrors what happened back in 2008.  Three years ago at this time the average price of gasoline was right around $3.13 a gallon.

Let’s certainly hope that we don’t see a repeat of what happened to oil prices back in mid-2008.  The price of oil reached an all-time record of $147 a barrel and gas prices in the United States absolutely skyrocketed.

So how high will the price of gas in the U.S. go in 2011?

We haven’t even come close to 4 dollar gas yet, but a large number of analysts believe that it is coming this summer.

Is there even a possibility that we could see 5 dollar gas in America at some point in the next couple of years?

Well, there are some in the oil industry that are convinced that it could actually happen.  Just consider the following quotes….

Darin Newsom, senior analyst at energy tracker DTN….

“If this thing escalates and there’s a good chance that there’d be a shift in supplies, $5 gas isn’t out of the question.”

Peter Beutel, president of energy adviser Cameron Hanover….

“If you are looking at the disruption of movement and production in countries such as Saudi Arabia and the UAE, you’re easily talking $5 gas.”

John Hofmeister, the former president of Shell Oil, on his belief that we could see 5 dollar gas by 2012….

“I’m predicting actually the worst outcome over the next two years which takes us to 2012 with higher gasoline prices.”

So why is everyone so concerned about gas prices?

Well, because it affects the price of almost everything else in the economy.

David Wyss, the chief economist at Standard & Poor’s, says that every extra dollar that is spent on gasoline is a dollar that will not be spent somewhere else….

“The money that you spend filling up your car is money you don’t have to spend at the shopping mall.”

Not only that, but when gasoline costs more it has a negative effect on economic growth.  Almost all economic activities involve the use of oil in one form or another.  When the price of oil starts getting really high it motivates people to start cutting back on many of those activities.

The truth is that our whole economic system is based on the ability to use massive amounts of very cheap oil.  Now that the price of oil is rapidly rising again, many economists are becoming very alarmed.

Nobuo Tanaka, the Executive Director of the International Energy Agency, recently told CNBC that his organization is extremely concerned about what high oil prices could do to the global economy….

“That is our concern, regardless of the margins of disruption, if the $100 per barrel of oil is continued in 2011, the burden of oil to the global economy is as bad as 2008.”

So what was so bad about 2008?  Well, the price of oil soared to $147 a barrel in mid-2008 and this was a huge factor in the financial collapse that happened a few months later.  Now oil prices are returning to levels that we have not seen since 2008….

So if the price of oil breaks the all-time record this year will we see another global financial crisis?

It is hard to say.  But what almost everyone agrees on is that it will not be good for the global economy at all.

In addition, a higher price for oil will also have a huge impact on the trade deficit.  Because oil prices were at such a high level back in 2008, oil imports actually made up almost 50 percent of the U.S. trade deficit that year.

In 2010, the U.S. trade deficit was just a whisker under $500 billion.  If the price of oil gets up to 140 or 150 dollars a barrel we could easily see the U.S. trade deficit explode to 700 or 800 billion dollars in 2011.

That would be really, really bad for the U.S. economy.

So where are oil prices going next?

Well, if you could predict that with 100 percent certainty you could make a whole lot of money.  Nobody knows for sure.

But almost everyone believes that the price of oil is going to go up.  In fact, a lot number of investors have been making some very large bets that the price of oil is going to go up very significantly this year.

Recently, large numbers of investors have been betting that the price of oil will rise to $125 a barrel by May.  Shockingly, some investors have even been betting that the price of oil will rise to $250 a barrel by next December.

Let us hope that the price of oil does not rise that rapidly, but as the past couple of months have demonstrated, the world is becoming a very unstable place.   Just about anything is possible at this point.

If the price of oil rises significantly above $100 a barrel and it stays there for an extended period of time, it is going to be absolutely devastating for the U.S. economy.

So what do you all think is going to happen to the price of oil in 2011?  Please feel free to leave a comment with your thoughts below….

6 Charts Which Prove That Central Banks All Over The Globe Are Recklessly Printing Money

If the U.S. dollar is being devalued so rapidly, then why does it sometimes increase in value against other global currencies?  Well, it is because everybody is recklessly printing money now.  The 6 charts which you are about to see below prove this.  The truth is that it is not just the U.S. Federal Reserve which has been printing money like there is no tomorrow.  Out of control money printing has also been happening in the UK, in the EU, in Japan, in China and in India.  There are times when one particular global currency will fall faster than the others, but the reality is that they are all being rapidly devalued.  Unfortunately, this is a recipe for a global economic nightmare.

Right now you can almost smell the panic as it rises in global financial markets.  Investors all over the world are racing to get out of paper and to get into hard assets.  Just about anything that is “real” and “tangible” is hot right now.  Gold hit a record high last year and it is on the rise again.  In fact, it just hit a new five-week high.  Demand for silver is becoming absolutely ridiculous right now.  Oil is marching up towards $100 a barrel again.  Agricultural commodities have exploded in price over the past year.  Many investors are even gobbling up art and other collectibles.

Paper money is no longer considered to be safe.  All over the globe investors are watching all of the reckless money printing that has been going on and they are becoming alarmed.  An increasing number of investors and financial institutions are putting their wealth into hard assets that are real and tangible in an effort to preserve their wealth.

The other day, a reader of this column named James sent me some charts that he had put together.  I thought they were so good that I asked him if I could include them in an article.  These charts show how central banks all over the globe have been recklessly printing money.  Over the last 30 years virtually the entire world has developed a great love affair with fiat currency….

So is everyone printing money?

The U.S. is printing lots of money…..

Source, The St. Louis Fed

The Bank of England is printing lots of money…..

Source: The BoE

The EU is printing lots of money….

Source: The ECB

Japan is printing lots of money…..

Source: The BoJ

China is printing lots of money…..

Source: The People’s Bank of China

India is printing lots of money…..

Source: Reserve Bank of India

Of course anyone with half a brain can see where all of this is ultimately headed.  In the end, inflation is going to spiral out of control and we are going to witness financial implosion on a global scale.

So why don’t these nations just adopt sound money?

Well, it turns out that if you are a member of the IMF, you are specifically prohibited from having gold-backed currency.

Yes, you read that correctly.

In fact, U.S. Representative Ron Paul once sent an open letter to the U.S. Treasury and the Federal Reserve asking about this and he received no response.  The following is the content of that letter….

Dear Sirs:

I am writing regarding Article 4, Section 2b of the International Monetary Fund (IMF)’s Articles of Agreement. As you may be aware, this language prohibits countries who are members of the IMF from linking their currency to gold. Thus, the IMF is forbidding countries suffering from an erratic monetary policy from adopting the most effective means of stabilizing their currency. This policy could delay a country’s recovery from an economic crisis and retard economic growth, thus furthering economic and political instability.

I would greatly appreciate an explanation from both the Treasury and the Federal Reserve of the reasons the United States has continued to acquiesce in this misguided policy. Please contact Mr. Norman Singleton, my legislative director, if you require any further information regarding this request. Thank you for your cooperation in this matter.

Ron Paul
U.S. House of Representatives

Sadly, the truth is that the global elite don’t want nations to start adopting gold-backed currencies.  They want countries to use fiat currencies that they can openly manipulate for their own benefit.

At this point, every nation on earth (to the best of my knowledge) uses a fiat currency.  All of the major global currencies are being continually devalued.  In fact, there are times when counties will purposely devalue their currencies even more rapidly in order to gain a competitive advantage in world trade.

This is why so many investors now have such an aversion to paper currency.  It starts losing value the moment you take possession of it.

In some areas of the world, “gold fever” is absolutely exploding.  For example, China imported five times as much gold in 2010 as it did in 2009.  On the Shanghai Gold Exchange, trading volume soared 43 percent during the first 10 months of 2010.

Gold, silver and other precious metals are now seen as a great hedge against inflation worldwide.  Investors all over the globe are demonstrating a strong preference for “real money” over “paper money”.

So what does all of this mean?

It means that some tremendous imbalances are being built up in the global financial system.  The central banks of the world must continue to inflate these bubbles with constantly increasing amounts of paper money and debt in order to keep the game going.  If at some point the reckless money printing comes to a screeching halt it is going to unleash hell on global financial markets.

But if all of this reckless money printing continues we are eventually going to see horrific inflation all over the planet.  In fact, we are already seeing significant inflation happening in many areas of the globe.  Almost every single day a new headline about inflation in China seems to pop up in the financial news.  Rising food prices are sparking unrest in the Middle East and elsewhere.  Even U.S. consumers are starting to see some uncomfortable price increases at the gas pump and in the supermarket.

So it is not just Federal Reserve Chairman Ben Bernanke that is off his rocker.  The whole world is going crazy with money printing.

Hopefully this whole thing is not going to end as badly as many of us fear that it will.  But right now the central banks of the world are pumping unprecedented amounts of cash into the global financial system, and those in the global financial system are funneling a very large percentage of that cash into hard assets.  Unless something changes, that is going to mean that prices for basic necessities such as food and gas are going to continue to rise.

This is quite a fine mess that we are in.

Does anyone see a way out?

Shocking New IMF Report: The U.S. Dollar Needs To Be Replaced As The World Reserve Currency And SDRs “Could Constitute An Embryo Of Global Currency”

The IMF is trying to move the world away from the U.S. dollar and towards a global currency once again.  In a new report entitled “Enhancing International Monetary Stability—A Role for the SDR“, the IMF details the “problems” with having the U.S. dollar as the reserve currency of the globe and the IMF discusses the potential for a larger role for SDRs (Special Drawing Rights).  But the IMF certainly does not view SDRs as the “final solution” to global currency problems.  Rather, the IMF considers SDRs to be a transitional phase between what we have now and a new world currency.  In this newly published report, the IMF makes this point very clearly: “In the even longer run, if there were political willingness to do so, these securities could constitute an embryo of global currency.”  Yes, you read that correctly.  The SDR is supposed to be “an embryo” from which a global currency will one day develop.  So what about the U.S. dollar and other national currencies?  Well, they would just end up fading away.

CNN clearly understands what the IMF is trying to accomplish with this new report.  The following is how CNN’s recent story about the new IMF report begins….

“The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world’s reserve currency.”

That is exactly what the IMF intends to do.

They intend to have SDRs replace the U.S. dollar as the world reserve currency.

So exactly what are SDRs?

Well, “SDR” is short for Special Drawing Rights.  It is a synthetic currency unit that is made up of a basket of currencies.  SDRs have actually been around for many years, but now they are being heavily promoted as an alternative to the dollar.

The following is how Wikipedia defines SDRs….

Special Drawing Rights (SDRs) are international foreign exchange reserve assets. Allocated to nations by the International Monetary Fund (IMF), a SDR represents a claim to foreign currencies for which it may be exchanged in times of need.

The SDR is a hybrid.  SDRs are part U.S. dollar, part euro, part yen and part British pound.  In particular, the following is how each SDR currently breaks down….

U.S. Dollar: 41.9%

Euro: 37.4%

Yen: 9.4%

British Pound: 11.3%

Now there are calls for other national currencies to be included in the basket.

Russian President Dmitry Medvedev has publicly called for the national currencies of Brazil, Russia, India and China to be included in the SDR.

In January, the Obama administration said that it fully supports the eventual inclusion of the yuan in the SDR.

So yes, it looks like we are definitely moving in the direction of the SDR becoming a true global currency.

But is this a good idea?

Globalist organizations such as the IMF say that having a true global currency would facilitate world trade, it would make currency wars less likely, it would stabilize the global economy and it would make the rest of the globe less reliant on what is going on in the United States.

In fact, there is a lot of discussion in international financial circles that oil should be traded in SDRs rather than in U.S. dollars.

In a recent interview, IMF Deputy Managing Director Naoyuki Shinohara even suggested that the IMF may actually consider issuing bonds that are denominated in SDRs.  Apparently the goal would be to promote the use of the new “currency”.

But once again, it is important to remember that the IMF does not see SDRs lasting forever either.  Rather, the IMF considers the SDR to be an “embryo” from which a true global currency could emerge.

An IMF paper entitled “Reserve Accumulation and International Monetary Stability” that was published last year even proposed that a future global currency be called the “Bancor” and that a future global central bank could be put in charge of issuing it….

“A global currency, bancor, issued by a global central bank (see Supplement 1, section V) would be designed as a stable store of value that is not tied exclusively to the conditions of any particular economy. As trade and finance continue to grow rapidly and global integration increases, the importance of this broader perspective is expected to continue growing.”

In fact, at one point the IMF report from last year specifically compares the proposed global central bank to the Federal Reserve….

“The global central bank could serve as a lender of last resort, providing needed systemic liquidity in the event of adverse shocks and more automatically than at present. Such liquidity was provided in the most recent crisis mainly by the U.S. Federal Reserve, which however may not always provide such liquidity.”

Yes, unfortunately this is what the IMF really has in mind for all of us.  A one-world economic system with a one-world currency and a one-world central bank.

Is that what we really need?

A “global Federal Reserve” that dominates the currency and the economy of the entire planet?

At least with the U.S. Federal Reserve there is hope that someday the American people can convince Congress to shut it down.

A “global Federal Reserve” would not answer to anyone.  Individual nations could attempt to pull out, but then they would potentially be isolated from the rest of the globe and potentially cut off from world trade.

That may sound very far-fetched now, but that is the direction we are headed.

And shifting away from the U.S. dollar as the reserve currency of the world would be disastrous for the U.S. economy.

Right now the fact that the U.S. dollar is the primary reserve currency of the world is one of the only things holding it up.  If you took that support away the U.S. dollar could end up collapsing quite quickly.

Let us hope that the American people wake up and start insisting that we want no part in a global currency.  If we ever allow a world currency to start replacing the U.S. dollar to a large extent, we will lose a great deal of our economic sovereignty.  Not that we haven’t lost most of it already, but at least if we are still using our own national currency there is a greater chance that we can reclaim it.

What the IMF is proposing right now may seem very innocent, but the long-term consequences of going down the road they want to put us on could potentially be absolutely catastrophic.

The American people need to send a very clear message to their representatives in Washington D.C…..

#1 We do not want a one-world economy.

#2 We do not want a one-world currency.

#3 We do not want a one-world central bank.

Huge Numbers Of Dead Animals, Dead Birds And Dead Fish – What In The World Is Happening Out There?

Just what in the world is going on out there? Large groups of animals are keeling over dead, thousands of birds are falling out of the sky dead and millions of dead fish are washing ashore all over the globe.  Something is happening.  Do any of you know what is causing all this, because I sure don’t.  This all seemed to start around the end of December when mass bird deaths and mass fish deaths began to be reported all around the world.  Normally “weird” news stories like this kind of fade away after a time, but reports of bird deaths and fish deaths continue to come in and now there are even reports of large groups of land animals suddenly dropping dead.  As these reports from all over the globe continue to pile up, it doesn’t take a “conspiracy theorist” to figure out that something very much out of the ordinary is going on.  Unfortunately, at this point we have a whole lot more questions than we do answers.

A couple good summaries of the mass bird and fish deaths that we witnessed during the first few weeks of this crisis can be found here and here.  Unfortunately, large groups of animals, birds and fish continue to keep dying.  The following is just a handful of the reports that have poured in from all over the globe during the past week or so….

-“10,000 Cattle Dead In Vietnam: Cows, Buffalo Part Of Mass Die-Off”

-“Beijing reports mass bird deaths”

-“Hundreds of dead seals in Labrador”

-“55 buffalo die mysteriously on southern Cayuga County farm”

-“Two Million Dead Fish Appear in Chesapeake Bay”

-“Another Massive Bird Kill in the Tennessee Valley”

-“Trapped in ice, ‘thousands’ of fish die in Detroit River”

-“Dead birds from north Ala. being sent to Auburn for testing”

-“40,000 Dead Crabs Wash Ashore in U.K.”

-“371 Dead Birds Fall from Sky on LA’s Sunset Blvd; Similar to California, Arkansas, Louisiana Bird Drops”

-“First Birds & Fish, Now Hundreds of Cows are Dying”

It was easy enough to brush off one or two “mass death” news stories, but when they start coming in day after day after day it really starts to get your attention.

So does anyone know why all of this is happening all of a sudden?

Well, there certainly are a lot of theories being floated around out there.  When things like this start happening people start coming up with all sorts of really wild ideas.  Posted below is a list of some of the most common theories about these mass death.  Some of the theories seem to have some substance to them, while others seem just downright bizarre.

Theories That Have Been Put Forward To Explain The Huge Numbers Of Dead Animals, Dead Birds And Dead Fish Around The Globe

*Changes In The Magnetic Field Of The Earth

*Extreme Weather

*A Pole Shift

*Pesticides

*HAARP

*Other Secret Government Programs

*Cold Weather

*”Global Warming”

*The Approach Of 2012

*Methane Gas

*Loud Noises

*Disease

*UFOs Are Responsible

*Effects Of The BP Oil Spill

*The Second Coming Of Jesus

*Birds Are Dying Because Of Indigestion

*Increased Radiation From The Sun

*Large Groups Of Animals Always Die And This Is All Normal

Now, it must be noted that a couple of the recent “mass death episodes” can actually be explained.  For example, the U.S. government has admitted being responsible for the deaths of several hundred birds in South Dakota.

But what about the dozens of other “mass death” reports that have been pouring in from all around the earth?  How do we explain all of those?

That is something to think about.

Hopefully all this will end up being nothing.

Hopefully it will turn out that all of this can be easily explained.

We certainly don’t need any more problems right now.

As I wrote about the other day, the entire world financial system is on the verge of collapse.  At this point any kind of major event could be the “tipping point” that pushes the global economy into chaos.

The world as we know it can literally change overnight.  Today a reader emailed me the following video.  It is entitled “The Day After The Dollar Crashes”, and it takes the viewer through what a potential unraveling of the global financial system might look like.  As you watch this, keep in mind that any type of “big event” could set off a panic like this….

Currency Crisis! So What Happens If The Dollar And The Euro Both Collapse?

Some analysts are warning that the U.S. dollar is in danger of collapse because of the exploding U.S. government debt, the horrific U.S. trade deficit and the new round of quantitative easing recently announced by the Federal Reserve.  Other analysts are warning the the euro is in danger of collapse because of the very serious sovereign debt crisis that is affecting nations such as Greece, Portugal, Ireland, Italy, Belgium and Spain.  So what happens if the dollar and the euro both collapse?  Well, it would certainly throw the current world financial order into a state of chaos, but what would emerge from the ashes?  Would the nations of the world go back to using dozens of different national currencies or would we see a truly global currency emerge for the very first time?

Up until recently, the idea of a world currency was absolutely unthinkable for most people.  In fact, the notion that all of the major nations around the globe would agree to a single currency still seems far-fetched to most analysts.  However, if enough “chaos” is produced by a concurrent collapse of the U.S. dollar and the euro, would that be enough to get the major powers around the world to agree to a new financial world order?

Let’s hope not, but it is getting hard to deny that we are heading for a major currency crisis, and if the U.S. dollar and/or the euro collapse, the world will certainly never be the same afterwards.

In case you missed it, China and Russia made a very big announcement the other day.

They told the world that instead of using the U.S. dollar to trade with each other, they will now be using their own national currencies.

Most Americans don’t realize it, but that is a very, very big deal.

The fact that the U.S. dollar has been the primary reserve currency of the world for decades has given the United States a tremendous amount of economic power.

But now nations are beginning to lose confidence in the U.S. dollar and they are slowly starting to move away from it.

When the Federal Reserve announced a new round of quantitative easing in early November, it created a huge backlash from other nations.  For decades, many other countries have been heavily investing in dollar-denominated assets, and now they are quite upset that those assets are going to be devalued.

Chinese Finance Vice Minister Zhu Guangyao used very strong language in denouncing the Fed’s new quantitative easing scheme earlier this month….

“As a major reserve currency issuer, for the United States to launch a second round of quantitative easing at this time, we feel that it did not recognize its responsibility to stabilize global markets and did not think about the impact of excessive liquidity on emerging markets.”

German Finance Minister Wolfgang Schäuble was even more blunt.  He has called current Federal Reserve policy “clueless”, and he says that he is absolutely disgusted with the Federal Reserve at this point….

“They have already pumped an endless amount of money into the economy via taking on extremely high public debt and through a Fed policy that has already pumped a lot of money into the economy. The results are horrendous.”

So where is all of this going?

If the Federal Reserve keeps flooding the system with new dollars, the rest of the world could eventually totally reject the U.S. dollar and U.S. Treasuries.

If that day ever arrives, the results would be beyond catastrophic as the following short video from the National Inflation Association demonstrates….

But it is not just the U.S. dollar that is in trouble.

The euro is in danger as well.

Just consider the financial problems that some major European nations are experiencing right now….

*Standard & Poor’s has slashed Ireland’s credit rating two notches to “A”, and is warning that there could be further downgrades.  The Irish budget deficit is projected to reach 32 percent of national output this year.  Ireland’s finances are being called “just one big pyramid scheme”, and they recently accepted a huge European bailout.  Unfortunately for Ireland, this bailout comes with strings.  The Irish government is now being forced to implement an austerity program that is being referred to as “draconian”.

*Analysts are projecting that Portugal is going to need a bailout of at least 50 billion euros.  The government of Portugal has implemented some harsh austerity measures in an attempt to get the red ink under control, and the people are not pleased.  On Wednesday, a massive national strike shut down travel and basic services across the country.

*Things are so bleak in Portugal right now that Foreign Affairs Minister Luis Amado recently stated that his nation “faces a scenario of exit from the euro zone” if a solution is not found for this financial crisis.

*Greece was the first nation to need a European bailout, and now there are rumors that they may need even more assistance.  The statistics agency for the EU, Eurostat, recently revealed that Greece’s budget deficit for 2009 was actually 15.4% of GDP rather than 13.6% of GDP as originally thought.  The Greek national debt is now well over 120 percent of GDP.  The financial problems in Greece never seem to stop.

*Belgium’s debt has reached 100 percent of annual national income, and the cost of insuring that country’s debt has now hit record levels.

*Even Spain is in trouble.  Rates on Spanish 10-year government bonds have risen to frightening heights in recent days, and the official unemployment rate in Spain is hovering around 20 percent.

*In a recent article entitled “A Spanish Bailout Would Test Europe’s Strained Finances“, the New York Times quoted Jordi Galí, the director of the Center for Research in International Economics at Barcelona’s Pompeu Fabra University as saying that rumors that Spain is in financial trouble could end up making it a self-fulfilling prophecy….

“If investors expect Spain to have trouble refinancing its debt, now or somewhere down the road, then Spain will have trouble,” he added. “This is only aggravated by the fact that the reluctance of investors to purchase the country’s public debt leads to an increase in the interest rate it has to pay and thus in the budget deficit and the amount of debt it has to issue.”

So could this sovereign debt crisis actually cause the euro to collapse?

Well, it depends who you ask.

European Financial Stability Fund chief Klaus Regling says that there is “zero” chance that the euro will collapse….

“There is zero danger. It’s inconceivable that the euro would collapse.”

Other European leaders are not so sure about that.

EU President Herman Van Rompuy recently warned that if some of the weaker countries in Europe are forced to abandon the euro it will likely cause a total meltdown of the European Union….

“We’re in a survival crisis. We all have to work together in order to survive with the euro zone, because if we don’t survive with the euro zone we will not survive with the European Union.”

German Chancellor Angela Merkel is also warning that a failure of the euro could bring down the entire European Union….

“If the euro fails, then Europe fails.”

But is this likely to happen any time soon?

No, probably not, but in 2010 top European officials are actually acknowledging the possibility, and that shows just how serious things have gotten.

So if the U.S. dollar and the euro do collapse, what would happen?

Well, already many world leaders are openly speaking of the need for a true global currency.

After all, they argue, there won’t be any “currency wars” if we are all using the same currency.

In fact, the Institute of International Finance, an organization that represents 420 of the biggest banks and financial institutions on the globe, recently declared that the time has come to adopt a one world currency.

In fact, as I wrote in an article entitled “Bancor: The Name Of The Global Currency That A Shocking IMF Report Is Proposing“, a recent IMF policy paper actually proposed a name for the “global currency” that they believe could be coming….

A paper entitled “Reserve Accumulation and International Monetary Stability” by the Strategy, Policy and Review Department of the IMF recommends that the world adopt a global currency called the “Bancor” and that a global central bank be established to administer that currency. The report is dated April 13, 2010 and a full copy can be read here. Unfortunately this is not hype and it is not a rumor. This is a very serious proposal in an official document from one of the mega-powerful institutions that is actually running the world economy. Anyone who follows the IMF knows that what the IMF wants, the IMF usually gets. So could a global currency known as the “Bancor” be on the horizon? That is now a legitimate question.

So will any of this ever come to fruition?

Well, it would likely take one whale of a crisis to get the countries of the world to agree to such a thing.

However, we do live at a time when the world financial system seems to be perpetually on the edge of chaos.  If at some point the U.S. dollar and the euro totally fall apart perhaps we will see a “new order” arise out of all of that chaos.

But let’s hope not.  Once we give any organization the power to issue a global currency the odds of us ever getting our economic sovereignty back will be greatly reduced.  The internationalists are going to use any crisis as an opportunity to argue for greater centralization of the world financial system, and it will be very important for the American people not to fall for those arguments.

Hopefully the U.S. dollar and the euro can remain stable currencies for at least a little while longer.  Because once they collapse things will never, ever be the same again.

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