If significant inflation of the dollar occurs and Barak Obama allows its buying power to devalue so that the 2010 dollar is worth just six  or seven cents of the 2008 dollar’s value, a distinct possibility . . . the effect upon the world will be drastic and upon American citizens, worse yet. 

                As a boy, Rajjpuut lived in Germany and well remembers collecting thin paper stamps from Germany’s Weimar Republic whose nominal value on the face of the stamp had been crossed out once or even twice during the minting/printing process with a much higher finalized cost required when the stamp was ultimately sold. Even then, several decades after the fact, the older Germans well remembered when a Billion Deutsch Marks would buy you a scraggly dried handful of turnips; when workers demanded their pay once a day – and then twice a day – and at the end three times daily, so that they might immediately spend it and get some value from the money before the constant erosion of value left it virtually worthless. Ol’ Rajjpuut also remembers his shiny mint quality Adolf Hitler stamps issued just a decade later with their incredibly low denominations . . . it takes no imagination at all to realize that the Weimar Republic’s runaway inflation led step by step toward the country’s abyss and Der Fuehrer’s rise.

                For those of you interested in your own fate financial and otherwise, should Obama’s probable dollar devaluation occur and other present trends continue, Rajjpuut recommends Eric Maria Remarque’s novel “The Black Obelisk” for a play-by-play of survival during those crucial times in Germany. Remarque, best known for his two novels, “All Quiet on the Western Front” and “The Spark of Life,” captures our own potential fate quite vividly and compassionately.

Ya’all live long, strong and ornery,

Rajjpuut

That fine legacy has been corrupted and lost through government spending boondoggles and government interference boondoggles (GSBs and GIBs) rained upon us by irresponsible-fiscal actions of the liberals on the one hand (beginning with FDR’s New Deal) and by corrupt right-wing banking (beginning with J.P. Morgan, et al and the stealth creation of the Federal Reserve Bank in 1913) practices. 

Either of these factors by itself would have been nasty, but the combination was deadly to the American economy. The key blow was the combination in 1933-34 of FDR confiscating America’s gold and then his instituting “overnight” 69% inflation by devaluating the dollar from the $20.76 it was confiscated under to a new fiat value of $35 per ounce. In a fell stroke, he stole almost 70% of the wealth of individual Americans and confiscated it for the government thus extending the panic of ’29 until a few months after the start of World War II. For this the liberal media have dubbed FDR the greatest president of all or second only to Abraham Lincoln.

Today, some say that the amount of American DEBT and OBLIGATION (like Medicare, Social Security, Medicaid and mortgage guarantees of one kind and another) amounts to a mere $60 TRillion. Rajjpuut puts the number closer to $100 TRillion. By any standards, however, the hole the lawmakers have dug us into is deep and slippery and there is no ladder.  

You know the story: $300 TRillion+ combined worldwide debt (much of originated because the formerly trustworthy American Dollar has long been the “world’s reserve currency); failing banks; failing brokerage firms; failing airlines; failing automobile companies; foreclosures; plunging real estate values; AIG bailout; brokerage bailouts; auto bailouts; shrinking trade worldwide; The American Dollar now worth just 5.8 cents compared to its buying power in 1913, and with Bernanke’s money printing presses now pouring fifteen times the currency present in 2008 . . . the threat is strong that the dollar could slide to 0.387 cents of its 1913 buying power within a couple years. Under such an assault from all sides, all that was once virtuous (a penny saved is a penny earned) now is mocked by the coming hyper-inflation probabilities.

This canNOT continue.  This canNOT continue.  This canNOT continue. And this time because the whole mess is tied to the American Dollar’s new worthless status, expect these “interesting” events to soon occur at a planet near you:

1.        The dollar will no longer be the “world’s reserve currency” and the dollar as it’s presently known will disappear.

2.      All money tied to the dollar (virtually all money in the world) will be severely devalued by international agreement and the IMF (International Monetary Fund) and World Bank.

3.      The price of gold, currently at roughly $1,000 per ounce will be pegged at something like $5,000 or $10,000 new dollars per ounce. Floating currency now seen will disappear from the face of the earth. The World cannot risk it anymore. The United States (cause of the debacle) will have to turn much of its gold over to the world bank. Gold balance transfer will be how the world does business from now on. 

Note: 

If the U.S. decides these measures are “punitive” and refuses to go along: the world will set up the system anyway and the U.S. and its paper dollars will be totally unwelcome in world trade and except by trading gold . . . to first make good on old dollars and old debts and only then to cover any new transactions . . . Americans will not have access to real money via world trade or any other way. Any notion of U.S. isolationism would bring immediate ruin to the country under Obama’s fiscal irresponsibility . . . and the only somewhat flourishing economy in the country would be found in a barter and black-market system that avoided all government interaction especially taxes.  In other words, the country will have NO Reasonable Alternative . . . .

4.       Lenders (mortgagors, banks, etc.) and savers will be compensated to some extent (but not absolutely fairly, that would be impossible except by giving them gold) by legislation created to protect them from utter ruin

5.      Negative economic growth will continue in the United States, Europe, Russia and across much of the globe. South America and Asia will prosper.

6.      Since the value of gold in American Dollars is NEVER going to be raised to its real level (roughly $55,000 per ounce) without stripping the American government of all its gold holdings, the ultimate “Bernanke and world bank fix” would most probably be at $5,500 per ounce or $11,000 per ounce . . . in other words, “monetizing” 10% or 20% of the world’s debt is seen as far preferable to allowing Obama and his cronies to bankrupt the whole world down to the 0.397 cents of 1909 buying power that Rajjpuut mentioned earlier.

7.       The Dollar Debacle will make all nations suffer some, the U.S. much worse than most, but eventually (say six or seven years afterward), the crisis will be over and the world and U.S. and the entire world will be back to fiscally conservative sound-money policies.

You can tell your friends, you heard the sad truth here first . . . .

Ya’all live long, strong and ornery,

Rajjpuut

The story was a bit different for the mightiest of all empires, Britain, (“the sun never sets on the British Empire”) which actually stood alone against the combined forces of Italy and the mighty powers of Nazi Germany and Japan for over two full years and then continued to fight with America as its prime ally for another four to help secure the victory . . . and then surprisingly, theBrits called up Harry S. Truman one day less than two years later to let him know their empire was dead. They no longer had the resources to stop the Soviet Union’s wild land-grabbing in eastern and south-eastern Europe and were kind enough to inform the United States that the baton of freedom was in our hands like it or not . . . .

An incredible day in world history that February 21, 1947, but of course it’s not mentioned in today’s textbooks too busy telling the glories of Red China without mentioning that Mao and his successors have deliberately killed more people than Stalin and  Hitler combined (even before listing massive state-ordered deliberate abortions and the mandated one-child policy). That was the day the British realized they could no longer afford to be a world power and withdrew simultaneously from Greece and Turkey, not to mention NOT standing up to the Soviets in the remainder of the Balkans, etc. America became the heir apparent holding the baton of freedom and thank GOD it did!

After sixty plus relatively peaceful years (no major wars and the missiles withdrawn from Cuba) that saw the winning of the Cold War, America’s likely demise comes gift-wrapped courtesy of Barak Obama’s seemingly total ignorance or total willful stubborn denial with regard to economic reality.   Within four and a half months he doubled the national debt which had required 231 years to accumulate. His chief financial conspirator, Fed Chairman Ben Bernanke with Obama’s urgency set the money printing press at full gallop so that today we have fifteen times the paper circulation in the country we did a year earlier. The rising world powers have for the most part, all called for the removal of the American Dollar as the “world’s reserve currency.” The all-important dollar index (USDX) which reached a peak (157) during the Reagan years now stands  (76) at 49% of that level and with willful inflation courtesy of Obama and the Federal Reserve Bank poised to take over . . . cannot be worth much more than six or seven cents in 2008 buying power or roughly 4.5 or 5 on the USDX. Only tradition keeps the fiction of a valuable dollar alive and tradition is poor recompense if a run on the dollar takes place within the next 12 or 15 months. Think of it as “death by a thousand cuts.”

Before the creation of the Federal Reserve Bank in 1913, the dollar was surely the strongest currency in the world. The 2008 dollar compared to the 1913 gold-backed dollar had the buying power of roughly six cents from the 1913 buck. But our 2009 dollar IF PROPERLY PRICED ACCORDING to PAPER BILLS IN CIRCULATION would have the buying power of significantly less than one-half cent from the 1913 gold dollar. The two biggest blows were Obama’s policies today and the 43% overnight inflation created by Franklin Roosevelt’s confiscation of all gold currency in 1934. Just as FDR’s insanity took a recovering economy (the bottom was July, 1933) and threw it willy-nilly into a twelve-year-plus full-blown DEPRESSION . . . expect the Obama villainies to not only dramatically and painfully extend our nation’s financial woes, but to actually sound the death knell to American power, prestige and greatness. Yes, folks, it’s every bit that bad . . . .

Ya’all live long, strong and ornery,

Rajjpuut

The worse news is that in actuality the present national debt when adjusted both for inflation and the rate of interest and when also adding in obligations like Medicare and Social Security which are not considered debt, but should be, really amounts to about $92 TRillion in debt or obligations (for example Medicare right now has $34 TRillion in obligations it can never meet) coming due by 2020.

U. S. Secretary of the Treasury Timothy Geithner Wednesday attempted to sell $43 billion in new U.S. Treasury notes on the market which, if successful would be a single-day record for borrowing. On Thursday and Friday the treasury will attempt to unload yet another $69 billion.  So the United States is hoping to borrow $112 Billion in just three days, quite a pace! On an expanded basis that would amount to roughly $900 Billion per month or $12.8 TRillion yearly. It wasn’t that long ago that Ol’ Rajjpuut remembers less than $100 Billion per year being the nation’s entire borrowing. Now we’re panhandling 12% more in a mere three days  . . . if you didn’t understand the extent of America’s economic troubles before, hopefully now you do.

Secretary Geithner has already borrowed $1.41 TRillion this year, roughly 2.7 times more than the borrowing for the full year in 2008.  Obviously in recent days, the pattern of borrowing has increased markedly. Geithner and Obama’s  third partner in crime: Fed Chairman Ben Bernanke has been running the money printing presses day and night so that we now have fifteen times as many paper dollars in circulation than we had in 2008. The value of your money is shrinking overnight as a result of Washington’s actions since the onset of the Obama administration. According to the Congressional Budget Office (CBO) by 2020 the National Debt should reach 24.5 TRillion. But the facts are a lot scarier than all that . . . .

It appears definite that the American dollar’s place in the world economy as the World’s Reserve Currency is tenuous at best. IF, or when the dollar loses its place as the world’s reserve currency there is no reason to believe it will keep anything but a miniscule part of the present value which is  now 76 on the USDX scale.     If for example, Bernanke’s 15/1 on circulating currency is realized, the possibility of a 2010 American dollar wielding seven cents of the buying power of today’s dollar and hitting 5 on the USDX. If this is to be our economic future: it is bleak.

Ya’all live long, strong and ornery,

Rajjpuut

Ya’all live long, strong and ornery,

          Since “Captain” Obama is blind and First Mate Bernanke uses a cane and seeing-eye dog as well . . . smart sailors jumped ship before it weighed anchor.  This could be, however, one of those times when Second Mate Geithner may actually be able to successfully launch life-craft to keep all hands from sinking . . . like Ol’ Rajjpuut said, “could be.”

          President Barak Obama’s well-known economic ignorance and the much longer-standing absolute incompetence of Fed Chairman Ben Bernanke put the country at the brink of insolvency by April 15^th. Treasury Secretary Timothy Geithner has aided and abetted these two fools unabashedly till now. 

For the first time in memory, Geithner uttered a pittance of economic truth as he referred to the jobs Bernanke and his predecessor Alan Greenspan had done, saying, "I think it's very hard to look at that system and say that it did anything close to an adequate job of what it was designed to do." Geithner, speaking before the House Financial Services Committee, mentioned the collapse of the housing and credit markets because of high-risk subprime mortgages made to borrowers who didn't understand and couldn't afford them.

Of course, it was only a pittance of the truth. Geithner insinuated that the fault, ALL 100% of it, sat in the Federal Reserve’s lap. Yes, the Fed did its part to foul things up by encouraging the use of derivative investments, for which Greenspan deserves 85% of the blame and Bernanke 15%. But what Geithner was reluctant to reveal was that it was liberal and moderate Democrats under Clinton in 1998 along with liberal Republicans, who were the imbeciles that passed the mortgage-guarantee laws without requiring real legal proof that poor people then considered “credit-worthy” for buying a house had even a remote chance of affording the mortgage.

Clinton signed the bill eagerly. When in January 2005, the Bush administration sponsored legislation to eliminate the worst weaknesses in a horribly weak piece of law:  the Democrats obstructed the needed changes. Half measures sponsored by both parties in the middle of 2006 were far too little, far, far too late. That is the root cause of the financial mess we’re in.  The Fed’s ongoing praise of that legislation and also of derivative investments was icing on the fallen cake. It seems the whole country and particularly the nation's journalists are blissfully ignorant of these facts, or perhaps reluctant to point fingers at liberal fools??   It’s hard to put faith in people who can’t see or won’t speak the truth about easily understood economic matters . . . and surely the liberal politicians and media are very guilty of contributions to the country's ignorance of the truth.  The liberal politicians certainly would prefer that such truth never emerge into the nation's collective consciousness.

In any case Geithner believes the Fed has had plenty of time to straighten out the credit-industry crunch; and, in particular the credit card mess and unmitigated string of credit-card abuses piled upon consumers and suggests that his Treasury Department can handle the job better. It’s hard to see how anyone can do worse than the Fed has. When it comes to protecting consumer credit card users from abuse: the Fed has done little or nothing. Shady mortgage lending, of course, is the fault of the liberals who wanted everyone in a home, even if they couldn’t afford it. But abusive credit card fees; exorbitant payday loans and several dozen approved but high-cost and risky financial products plague the consumer.

The idea of Geithner, with the White House’s backing, is to create a new Consumer Financial Protection Agency (CFPA) to regulate and oversee a vast offering of financial products . . . thus stripping the Federal Reserve and other banking regulators of their current powers. Bernanke, naturally, fought to defend his turf insisting that rather than the Treasury Department, the Fed should institute the new rules congress creates.

Republicans on the panel said Friday they thought it was foolish to give unelected bureaucrats the authority to determine what financial products are fair. "They will be empowered to decide which credit cards we can receive, which home mortgages we are permitted to possess, and even whether we can access an ATM machine," Jeb Hensarling, a Texas representative said.

No offense to Hensarling, but when credit card companies can lure consumers in at 0% interest and then charge usurer’s rates over 20% within six months: some strict limits are badly needed. Both Democrats and Republicans in Congress are reluctant to give the Fed additional powers, blaming what they say was its lack of regulatory oversight of banks and risky mortgages for leading to the current financial crisis. Again, the real blame is not being attached to the real culprits and the media has let this slide ever since the real-estate meltdown became evident to them in late 2006. But it’s likely that Geithner will get the call to head up the new CFPA.

Ya’all live long, strong and ornery,

Rajjpuut

            As financial advisor Jimmy Rogers, chairman of Rogers Holdings  puts it: “This guy Geitner’s been wrong for fifteen straight years.  Bernanke? He’s been wrong for 350 consecutive weeks. They really have no idea.  Obama’s got us printing money hand over fist. I can’t say the fundamentals of  Citibank or GM are getting better. No one can get a loan, so manufacturing is stagnant and prices are going up as supply goes down.”   Inflation too will soon make prices jump.

           “Washington is increasing taxes on capital gains and energy, in a recession?  Can you believe it? They’re destroying the economy.” Rogers said the “rally in the dollar” was mind-boggling, “it’s not a stable currency.”