I’m mad as hell about the shellacking our government has planned for you … for me … and for millions of other honest, hard-working Americans … and I absolutely refuse to stay silent while good people are stripped of their life savings, investments and even the retirement funds that are due to them … and by our own leaders. Words: 1781
So says the late Larry Edelson’s (www.uncommonwisdomdaily.com) in an article* which Lorimer Wilson, editor of www.munKNEE.com, has reformatted into edited […] excerpts below for the sake of clarity and brevity to ensure a fast and easy read. (Please note that this paragraph must be included in any article reposting to avoid copyright infringement.) Edelson goes on to say:
If it’s hard for you to believe that our own leaders have turned on us – that they are intentionally attacking your wealth and financial independence and that they have already begun executing their plan – I certainly understand but please – for your own sake and for your family’s safety – hear me out.
U.S. Has an Utterly Unpayable $127.8 Trillion in Debt Obligations
Ask anybody about how much Washington owes and they’re likely to say the national debt is somewhere around $12.8 trillion. As shocking as that massive number is, however, it is just a fantasy — a tiny fraction of the gargantuan amount our government really owes.
In actual fact, our real national debt is nearly TEN TIMES GREATER! In addition to that official $12.8 trillion national debt, Washington has written $108 trillion in off-budget, unfunded IOUs on Social Security, Medicare, Medicaid, its prescription drug program, its veterans benefits programs and its Federal pension programs that must also be paid. That adds up to more than $120 trillion and that’s not even counting the $1 trillion the new health care bill will cost us or the trillions in NEW deficits projected over the next 10 years! The truth of the matter is that, altogether, our leaders have obligated us … our children … and our children’s children … to pay off an utterly unpayable $127.8 trillion in debt.
Global Investors in U.S. Treasuries Are Recoiling in Horror
Until recently, we could count on overseas investors to buy our treasuries — effectively loan Washington the money it needs to pay its bills. In fact, foreigners fully fund over HALF of our borrowing addiction… but they are horrified these days at our leaders’ inability to manage the nation’s finances and wondering if we’ll be able to make good on our obligations to them and, [as such, are] starting to snap their wallets shut. [They are beginning to realize that] Washington’s debts have finally reached the point of no return – [that] they are absolutely, positively UNPAYABLE! [How right they are!] We have reached the point of no return.
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What are the Alternatives?
Washington will never repay the full $127.8 trillion it owes. Think through the alternatives:
1. Borrow our way out of debt?
Virtually impossible. As we’ve seen, foreign investors who have loaned us the money that Washington needs to stay in business are already fed up. They’re worried that we’ll never be able to repay what we owe them. They’re now becoming net SELLERS of treasuries so it’s nearly impossible that they’ll be willing to throw trillions more of their money our way. Plus, even the mere hint that Washington was trying to borrow trillions more would crush bond prices and light the fuse on an interest rate explosion that would kill the economy.
2. Implement massive spending cuts?
A snowball’s chance in hell! The White House and Congress will continue doing what they’ve always done and what they’re doing right now – finding dozens of outrageous new ways to waste your money and plunge us even deeper in debt. Meanwhile, Washington WILL make a show of addressing the crisis by delaying the retirement age for Social Security from age 65 to 68 and by reducing benefits.
How does that help you? It doesn’t. It just dilutes down what you’re already owed even more so if you’re looking for any meaningful cuts in wasteful spending in Washington, forget about it. Any real cuts needed to make any noticeable dent in the government’s debt would probably cause riots in the streets and guarantee a quick end to the career of every politician who voted for them.
3. Raise taxes drastically?
Sure, the Obama administration will raise your taxes but even the White House says that the most startling proposals would generate [less than a $100] billion in revenue… [which is less than] one percent of the total…Washington owes. At that rate, it would take 300 years to repay our government’s debt with new taxes! In fact, it would take new taxes [in excess of $1 million for every U.S. household to pay off this debt. Nobody has that kind of money, of course, and besides, a tax increase representing just a fraction of that amount would surely kill… [the economy], drive unemployment into the stratosphere and light the fuse on a Great Depression that [would make] the last one pale by comparison.
That leaves Obama and Bernanke with one and ONLY one alternative …
4. Devalue the U.S. dollar!
When war strategies to vanquish enemies wind up killing innocent civilians, it’s called “collateral damage.” Similarly, when political strategies to vanquish debt wipe out your wealth, the same term applies, and right now President Obama and Fed Chief Bernanke know that there is ONLY one way they can ever hope to make good on their massive debt obligations and that is to devalue the U.S. dollar! Only then can they hope to repay Washington’s debts — by doing it with cheaper dollars.
Obama and Bernanke also know that by doing so, they’re also gutting the value of every dollar you earn, spend, save, invest and plan to use in retirement but they think they have no choice. To allow Washington to default on its debts and obligations would almost surely cause the entire U.S. economic house of cards to collapse — and the blame would land squarely on the Obama administration’s shoulders.
You? You’re little more than collateral damage. If the only way to delay default is to rob you of everything you’ve worked for and everything you’re counting on to see you through retirement — that’s evidentially just fine with them.
What is the Government Doing to Resolve the Situation?
Our government has begun intentionally debasing our own currency by:
1. Flooding the World with Unbacked Paper Dollars
Money is subject to the laws of supply and demand just like any commodity. If you want to lower the price, simply increase the supply. Just do that and the buying power of the greenback will plunge. Your bank statement may still say you still have $25,000 but in truth, when you go to spend that money, it only buys as much as $18,000, or $15,000, or $12,000 used to because the value of your money has been stolen from you…
2. Defaulting on its Debts by Devaluation
You’ve probably been hearing a lot lately about how overvalued the Chinese yuan is and how that gives the Chinese an unfair trade advantage and how hard the Obama administration has been working to convince Beijing to raise the yuan’s value against the dollar in order to level the playing field but the only problem is that it is all a lie.
The truth is, the average Chinese worker earns a tiny fraction as much as American workers do. Even if the yuan DOUBLED or TRIPLED in value against the dollar, Chinese products would still be far cheaper on world markets than U.S.-made products so what’s the real reason why Washington is so desperate to have China INcrease the value of the yuan? Simple: By doing so, they will be automatically DEcreasing the relative value of the dollar — and they’ll be able to repay China, and everyone else who owns treasuries or is owed money by Uncle Sam using CHEAPER dollars![Let me explain how this could unfold.] China [continues to] keep the value of its yuan extremely low so it can continue to keep its exports cheap [and in the process is] building up a massive trade surplus with the U.S. and a huge pile of cash. As soon as it has a big cash hoard and a strong enough domestic consumption to sustain its economy WITHOUT such massive growth in its exports to the U.S., it will let the yuan get stronger, driving DOWN the value of the U.S. dollar – and that day has come. China will soon go ahead with a yuan revaluation — and dollar devaluation.
Such a revaluation ot its currency won’t negatively impact China [that] much because Beijing has been preparing for this the entire time by gobbling up natural resources left and right, not only for strategic supply needs, but also to hedge against the inevitable U.S. dollar devaluation. The steps are now in motion:
a) Singapore, for the first time in its history, pushed the value of its currency higher.
b) The Korean won, Malaysian ringgit, Indian rupee and Taiwan dollar will likely soon begin to rise rapidly against the dollar.
c) China will probably soon end the yuan’s peg to the greenback and allows its currency to move higher.
Be Advised: You Are the Intended Victim!
With each and every revaluation, YOUR dollar is worth LESS and make no mistake about it: This is nothing more and nothing less than highway robbery and YOU are the intended victim!
The greenback has already plunged as much as 33% in real, trade-weighted terms since its 2002 high. By that measure, every dollar in your wallet … in your savings account … in your brokerage account … and in your retirement account is worth only 67 cents.
The handwriting is on the wall: This great dollar disaster is only just beginning. Obama and Bernanke have no choice. Either they dramatically devalue the dollar over the next three years, or they go down in history as the first administration to default — to welch on the government’s debt obligations.
*http://www.uncommonwisdomdaily.com/dollar-doomsday-2010-protect-your-wealth-and-profit-9283 (Uncommon Wisdom is a free daily investment newsletter from Weiss Research analysts offering the latest investing news and financial insights for the stock market, precious metals, natural resources, Asian and South American markets. To view archives or subscribe, visit http://www.uncommonwisdomdaily.com.)
– The above article consists of reformatted edited excerpts from the original for the sake of brevity, clarity and to ensure a fast and easy read. The author’s views and conclusions are unaltered.
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