- My Fellow Amero-cans Part 2: Dollar Purgatory

Stock Ideas

Investors Daily Edge

My Fellow Amero-cans Part 2: Dollar Purgatory

Stock Ideas

Market Watch

By Dr. Russell McDougal Dear Reader, The U.S. dollar is “as good as gold,” right? Well, not exactly. Those days and decades are long gone. The U.S. remains in the midst of currency woes and a global credit crisis that refuses to go away. Let’s look into what was once the foundation for the buck - gold bricks in Ft. Knox, Kentucky.
More...

Login Form

My Fellow Amero-cans Part 2: Dollar Purgatory

Wednesday, 03 September 2008

By Dr. Russell McDougal
The US dollar has had its run of the globe since the end of WW2. American technology and “know how” have held center stage. We have had the greatest economy and military the world has ever seen. These enviable attributes were eventually combined with a near infinite ability to print and distribute dollars and other financial products. Everybody wanted what the US had to offer. Those days are gone.
The response to last week’s article was overwhelmingly positive. IDE readers clearly “get it”. We’ll be on this topic a while longer.

The dollar’s dominance is way past its prime. In the 1960s Charles de Gaulle of France called it an “exorbitant privilege” to issue the currency that the world uses as money. This was at a time when the US dollar was actually backed by gold. He knew what was going on with dollar debasement and decided he’d rather have the promised gold than green paper. I know it’s politically correct to bash the French but my PC skills are pitiful at best…De Gaulle’s actions were prophetic.

In 1971 Nixon tricked all global dollar holders and reneged on the gold for dollars deal. You won’t likely read it in the history books but that is what is correctly called default. It also sent the dollar into a purgatory where it remains to this day.

Those of us who study both economics and money have long seen the issuers of the dollar dig its grave. Notice I didn’t say we’ve seen them dig their own grave. We watched attentively as the Euro was birthed over ten years ago. The word at the time was that it was being brought forward because the buck was getting old and cranky.
Since that time the Euro has come to garnish up to half of worldwide trade transactions. Who drew up the Euro in the first place? Let’s just say that those who like to make their livelihood by turning computer keyboard entries into yachts and palaces had their fingers in the pie. The Euro is just as flawed as any other un-backed (fiat) currency. It’s merely a younger version awaiting its own purgatory.

Would you like a franchise with which you could stroke a few keys and instantly, out of nothing, create “money” that others would literally slave for? You should have been a banker.

Other Reports Beside the Fed This Week

Rick PendergraftObviously the most important report of the week is the FOMC meeting, but there are other reports that will move the market this week.
+ Full Story

The Ultimate Dividend Investment

By Tom Dyson In his professional life, Thomas Lewis has one goal... producing dividends every single month.
+ Full Story

Never forget that what is commonly called inflation has its roots in excess money printing. All central banks partake in this privilege. Central banking is a sweetheart deal between money royalty and politicians. Feudalism lives on.

Even the Commies have figured out this trick as China embarks on its “capitalistic” adventures. They have their own central bank that prints whatever they’re told to print. Authoritarian rule and abusive money is a double whammy. This one could play out for a long time as the Chinese, for the most part, are historically accustomed to one form or another of dictatorship (Emperors, etc). “Free man” concepts are not even on the horizon.

The demise of the dollar may come as a surprise to many. Others have long prepared for the event. That is what all the background talk of the Amero is about. The foundation has already been laid. You can rest assured the gang that is imploding the present system will be front and center with its replacement. There is no justice.

The New World Order is all about currency regions. The three primary areas are set to be Europe, Asia and the Americas. Europe is up and running. Asia is moving quickly in that direction with China and Japan vying for supremacy. Smart money predicts the Chinese Yuan will be the victor. The dollar is playing out its final timeline.

The common term for the dollar’s global dominance is called dollar hegemony. Here are three definitions of hegemony from dictionary.com:

    1. leadership or predominant influence exercised by one nation over others, as in a confederation.
    2. leadership; predominance
    3. (esp. among smaller nations) aggression or expansionism by large nations in an effort to achieve world domination

Leadership and influence are admirable terms. Aggression, expansion and domination are anything but admirable. Is the US dollar backed by military might? Maybe it’s just coincidence that Iraq and Iran were/are opting out of the dollar based system. Attempting to do so can be hazardous to national health. Oil is inextricably linked to the fate of the US dollar.

The money turf will be defended. As of 2005 there were over 700 American military bases in 160 other countries (Chalmers Johnson).

The unfathomable dollar based debts cannot be paid. The Fed, Treasury, banks and various financial institutions are presently playing hide the monkey with damaged or worthless economic goods. Black holes abound. Another Nixonian default is underway, this time via hyperinflation. The buck won’t survive it in present form. You’ve seen it won’t likely go quietly.

These are turbulent and disturbing times. Purgatory ain’t forever.

Live Resourcefully,
Rusty

P.S. To let me know what you thought of today's article, send an e-mail to: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

We endeavor to decipher analysis of this Teaser/News Letter to distinguish the thoughts of Authors/Editors.
Please post your Review/Comments, your rating helps other users gauge the value of an article ...

This investment news is brought to you by Investor's Daily Edge. Investor's Daily Edge is a free daily investment newsletter that is delivered by email before the market opens. It's published by Fourth Avenue Financial, a subsidiary of Early To Rise (an affiliate company of Agora Publishing). In each weekday issue you'll receive practical strategies for protecting your portfolio and multiplying your money. You'll also learn about undiscovered opportunities in emerging sectors and markets, deeply discounted stocks, recommendations for bonds, cash, commodity and real estate investing, and top ETFs. To view archives or subscribe, visit Investor's Daily Edge .