The Almighty Dollar Is In Peril As The Global ‘De-Dollarization’ Trend Accelerates

Michael Snyder

As the Obama administration continues to alienate almost everyone else around the entire planet, an increasing number of prominent international voices are starting to question why the U.S. dollar should be so overwhelmingly dominant in global trade.  In previous articles, I have discussed Russia's "de-dollarization strategy" and the fact that Gazprom is now asking their large customers to start paying in currencies other than the dollar.  But this is not just a story about Russia any longer.

As you will read about below, China and South Korea have just signed a major agreement to facilitate trade with one another using their own national currencies, and even prominent French officials are now talking about the need to use the dollar less and the euro more.  John Williams of shadowstats.com recently said that things have never "been more negative" for the U.S. dollar, and he was right on the mark.The power of the almighty dollar has allowed all of us living in the United States to enjoy an extremely high standard of living for decades, but as that power now fades it is going to have profound implications for the U.S. economy.

The Future of Bitcoin - Bust, Bubble or Breakthrough?

Stefan Molyneux

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Hiding Economic Depression With Spin

Paul Craig Roberts

Time is running out for the US economy and the American people. The financial press and economic commentators, with few exceptions, do a good job of keeping this fact from the public.

Consider for example the spin put on the “advance estimate” of the real GDP growth rate for the second quarter announced on July 31. The annual rate of 1.7 percent real GDP growth for the second quarter of 2013 was presented optimistically as an acceleration in real GDP from the first quarter’s 1.1 percent growth rate. However, the reason for the “acceleration” in growth is that the first quarter’s estimate was revised down from 1.8 percent to 1.1 percent. The second quarter GDP growth rate is also subject to revised estimates. Most likely, the final number will be lower.

Consider also that the reason that real GDP is positive is that nominal GDP is deflated with an understated measure of inflation. The measure of inflation has been manipulated in order to deny Social Security recipients cost of living adjustments. Statistician John Williams (shadowstats.com) reports that if deflated by previous official methodology, GDP growth has been negative since the downturn in 2007. In other words, the “recovery” is just another government hoax.

Announcing a Project to Modify or Replace the US Monetary System

image source

David Redick

The US Dollar (USD) has been the world’s primary reserve currency (used for most international transactions, even when the US is not a party, and for bank reserves in all nations) since 1920, which has helped support its value due to high demand. The use of the USD for most oil sales since 1973 (the ‘Petrodollar’) has also brought helpful demand, but that is fading.

Due to excessive creation of new money (‘traditional’ monetary inflation, plus the Bernanke ‘spike’ in 2008 and recent QE activity), the USD has lost over 95% of its purchasing power (PP) since the Federal Reserve System (the ‘Fed’, our central bank) was created in 1913.

The rate of decline worsened with the end of gold ‘backing’ in 1971. To prevent losses, many nations now avoid owning or using the USD (or other assets denominated in USD), and instead trade with each other using their own currencies (led by the BRICS – Brazil, Russia, India, China, and S. Africa, plus Japan and Australia). This could lead to a major reduction in the USD role as a world reserve currency, and cause a 50% to 90% crash in value (PP) due to reduced demand. Such a crash could happen soon, and would cause; 1) Large losses for all holders (persons, firms, governments) of dollar-denominated assets (cash, CDs, bonds, annuities, life insurance, equities, real estate, etc.), and 2) A major increase in interest rates, which would blow-up the US budget and business loan rates! Thus, we must consider changes that will prevent the crash. 

I hereby volunteer to be the collector of ideas, and use this input to write a draft plan, seek approval from contributors, then publish a comprehensive final plan for a modification of the current US Monetary System. The system includes the Fed and its ‘Fed Notes’, Treasury Dept. bonds and policies, legal tender laws, the FDIC, mints, banks and various banking laws and regulations.

What Does a Currency Collapse Look Like?

Dees Illustration

Dave Hodges

In Part one of this series, I detailed how this administration has set themselves up to roll out martial law like no other martial law in history. Part one further revealed that the mechanisms needed for hard-core martial law are either active or merely waiting in the wings. All that is needed for unmistakable martial law to be rolled out in its entirety, is for the right trigger event to take place.

Will It Be a False Flag Attack Or a Currency Collapse?

My initial response to that question is, does it really matter? The pattern of societal collapse and subsequent governmental enslavement of the American people will be largely the same whether the precipitating incident is a false flag attack or a currency collapse. For the purpose of simplicity, let us call the precursor event to all-out martial law, a currency collapse.

The Federal Reserve Is the Enemy of Humanity

The Federal Reserve has been bleeding this country to death for exactly one century. What the dollar bought 100 years ago, can only buy three cents of product today. This means that 97% of the value of our currency has gone into the pockets of the Federal Reserve.

New Factors in Personal Financial Planning

David Redick

Personal Financial Planning is one of the most important things you should do, but it is often overlooked. Today's world has financial risks that have never existed before, so much of the "traditional" planning logic is wrong or has voids. For example, most (over 95%) of investors assume it is appropriate to have their assets denominated in US Dollars (USD) if they are a US citizen. After all, the USD is the world's primary reserve currency (banks hold it as reserves - good as gold -, and any Seller will accept it; when India buys coffee from Brazil, they use USD), and the US is the world’s largest economy (and military power), so it must be safe. Wrong! The USD’s value has been falling for over 100 years, and is now heading toward a crash in value because other nations are starting to avoid using it, thus reducing the demand that has kept it propped-up before.

Why the US Dollar is Declining in Value and May Crash

Here are the two major reasons the USD is dropping in value (purchasing power; example, how much bread would $1 buy in 1913, 1950, and 2013? Answer, 62% less in 1950, and 95% less in 2013!).

The Rational Market Myth

armageddon without nukes

Paul Craig Roberts

One of the myths of economics is that markets are rational. Theories are based on this assumption, and the belief that markets are rational fuels the argument against regulation. The market response to the Federal Reserve’s June 19 statement that it will taper off its bond purchases if its forecast comes true is unequivocal proof that markets are irrational.

The Federal Reserve’s statement that it “currently anticipates that it would be appropriate to moderate the monthly pace of purchases [of bonds] later this year” depends on a very big if. The if is the correctness of the Fed’s forecast of moderate economic growth and employment gains.

The Fed has not stopped purchasing $85 billion of bonds each month. So nothing real has changed. Indeed, there was no new information in the Fed’s statement. It has been known for some time that, according to the Fed, its bond purchases will gradually cease.

In response to this repeat of old information, the stock and bond markets sold off in a major way on June 19-20. This market response to the Fed’s statement indicates that the Fed’s forecast is unlikely to come true. Low interest rates and a high stock market are totally dependent on the liquidity that the Fed is injecting by printing $1,000 billion per year. If this liquidity is not injected, what will sustain the markets? If the markets crash and interest rates rise, how can the Fed expect recovery?

Food, Guns, Gold: “The Record is Rather Clear On the Side of Commodity Money”

Mac Slavo

If you’ve been watching U.S. financial markets the last few weeks you may have come to the conclusion that something is amiss and that there exists a major disconnect between what’s happening on Wall Street and what average Americans are experiencing on Main Street.

While analysts and experts point to the stock market as a sign of economic stability, today’s massive downswing should make it clear that the system is anything but stable.

The economy, the financial markets, and the U.S. monetary system are in uncharted waters and, as was noted yesterday after the Fed’s FOMC announcement, there is no way out of this mess.

The Federal Reserve and the US Treasury have taken it upon themselves to save us, but their plan seems to be disintegrating right before our eyes.

Derivative Meltdown and Dollar Collapse

Click to Enlarge

James Hall, Contributor

The frightening prospects from a derivative meltdown, well known for years, seem to deepen with every measure to prop up a failing international financial system. The essay Greed is Good, but Derivatives are Better, characterizes the gamble game in this fashion:

The elegance of derivatives is that the rules that defy nature are not involved in intangible swaps. The basic value in the payment from the risk is always dumped on the back of the taxpayer. Ponzi schemes are legal when government croupiers spin loaded balls on their fudged roulette tables.

Under conventional international trading settlement, the world reserve currency is the Dollar. The loss of confidence in the Federal Reserve System causes a corresponding decline in value in U. S Treasury obligations. Add into this risk equation, derivative instruments that are deadly threats that can well destroy national currencies.

QE Infinity: Fed Buying More Toxic Assets From Banks Will NOT Help Main Street

Dees Illustration

Eric Blair
Activist Post

Ben Bernanke and the Federal Reserve announced an open-ended bailout for the banks yesterday by a new mechanism called QE Infinity where they plan to purchase $40 billion of toxic mortgage-backed securities per month "until further notice".

Shrouded in confusing language like "unlimited stimulus" or "quantitative easing", this unprecedented move and rule change by the Fed was said to be warranted because employment remains weak even though they still maintain the false notion that "economic activity has continued to expand at a moderate pace in recent months."

As stated in the FMOC press release:

If the outlook for the labor market does not improve substantially, the Committee will continue its purchases of agency mortgage-backed securities, undertake additional asset purchases, and employ its other policy tools as appropriate until such improvement is achieved in a context of price stability. 

Of course this move "to foster maximum employment and price stability" does nothing to directly help job creation, and will continue to hurt main street by inflating the price of everything purchased by dollars. Yet it will clearly reward the investor class who already own most of the dollar-based assets.

The theory is that by removing toxic assets from the bank's books they have more liquidity to offer more credit, or to purchase more government debt. Somehow this is supposed to trickle down and help improve unemployment, which real numbers show to be in the 20% range when all factors are considered.

After a combined $2.3 trillion from QE1 ($1.7T) and QE2 ($600B), plus over $16 trillion is secret bailouts to recapitalize banks with absolutely no measurable improvement in the economy, how could any thinking person believe this policy will be beneficial?
Since mortgage-based assets total a conservative $600 TRILLION, QE Infinity is nothing more than an endless giveaway to the criminal banks at the expense of struggling taxpayers. Wall Street will obviously celebrate the move and stock prices will go up, along with food and energy prices.

It is so blatantly a policy that will steal from the poor to give to the rich.  It also makes one wonder how can the government cry poor when it comes to paying for food stamps, healthcare, education, and other benefits for the needy when they have endless trillions to prop up the banksters?

Significantly, this announcement comes on the heels of a census report that shows median incomes have fallen to levels of the late 1960s and early '70s. Of course, the mainstream version is they've only fallen to 1989 levels, which is hardly any better.

ShadowStats.com

The census report showed that the middle class is struggling with a median family income of $50,054. In 2010, Michael Snyder decisively proved that it is flat impossible for a family of four to survive on this income in America, and prices for essentials have only increased over the last two years primarily because of the Fed's reckless money printing.

This policy is an absolute disgrace and represents the final looting of the American people. There will simply be nothing left to the value of the dollar, and all of the important assets will be funneled straight up to the elite banksters. 

You think you are slaves now?  Just wait.

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How Long Will the Dollar Remain the World's Reserve Currency?

Dees Illustration

Ron Paul

We frequently hear the financial press refer to the U.S. dollar as the “world’s reserve currency,” implying that our dollar will always retain its value in an ever shifting world economy. But this is a dangerous and mistaken assumption.

Since August 15, 1971, when President Nixon closed the gold window and refused to pay out any of our remaining 280 million ounces of gold, the U.S. dollar has operated as a pure fiat currency. This means the dollar became an article of faith in the continued stability and might of the U.S. government.

In essence, we declared our insolvency in 1971. Everyone recognized some other monetary system had to be devised in order to bring stability to the markets.

Has The Perfect Moment To Kill The Dollar Arrived?

Brandon Smith, Contributor
Activist Post

The idea of “collapse”, social and financial, comes with an incredible array of hypothetical consequences ranging from public dissent and martial law, to the complete disintegration of infrastructure and the devolution of mankind into a swarm of mindless arm chewing cannibals. In an age of television nirvana and cinema overload, I have found that the collective unconscious of our culture has now defined what collapse is based only on the most narrow of extremes. If they aren’t being hunted down by machete wielding looters or swastika wearing jackboots, then the average American dupe figures that the country is not in much danger. Hollywood fantasy has blinded us to the tangible crises at our doorstep.

The reality is that collapse is not a singular event, but a process. It is a symphony of doom, composed of a series of exponentially more powerful crescendos. If the past four years since the implosion of the derivatives bubble have proven anything, it is that catastrophe has the ability to drown a nation slowly like a river of molasses, rather than sweep it away like a flash flood. That said, almost every recorded collapse of modern societies in the past century has been preceded by a primary trigger event; a moment in which the mathematical certainty of failure becomes clear, even if the psychological certainty is muddled.

Warnings Of A Great Depression or Hyperinflation

A run is starting on your retirement, hardship compounding the problems of retirees, we may be going into hyperinflation or deflationary depression, currencies down significantly over gold, problems similar to the 1930s, Ponzi finance must end. 

Bob Chapman
The International Forecaster 

Dees Illustration

Unemployment at 22.4% is causing a run on assets of retirement funds. That is probably why legislation is being introduced to limit how much money can be removed from these investment vehicles. About 11% of participants have taken out loans over the past year, up from 9% y-o-y. In overall total 22% have loans out and the numbers are accelerating. Almost all the loans will never be paid back. Hardship is forcing people to withdraw, as well as those who believe that government will try to commander 401K’s and IRA’s to fund a bankrupt government, that wants to replace those vehicles with bogus government guaranteed annuities.

If the extension of the short-term debt is not legislated by August 2nd, we may see legislation regarding a takeover of some retirement plans.

As this possible misuse of Americans hangs in the balance, inflation plods, relentlessly onward and at the current rate of acceleration we could see hyperinflation two to three years down the road. We projected 14% inflation before the end of 2011 just over a year ago, and we have six months to go to make it to that level. 

This Is How the Dollar Dies

Dees Illustration

Porter Stansberry
Daily Wealth 

The research I've laid out in the past few days (here, here, and here) suggests interest rates are inevitably headed higher. But how much higher?

Over the long term, the average real rate of interest on U.S. sovereign debt has been around 2% a year. The latest Producer Price Index (which we believe is more reliable than the Consumer Price Index) shows price inflation is currently 6.8% annually. Add the 2% real return we believe investors expect, and you get 10-year Treasury bonds yielding 8.8%.

Currently, those bonds yield only about 3%.

This implies a huge collapse of bond prices – a collapse of more than 50%.

A collapse of that magnitude would completely wipe out the stock market. It would be a massacre.

When Money Dies: The Dollar Vigilante Interviewed on Freedomain Radio (Video)

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Fed Ready to Print More Funny Money on QE3 Rumors

Dees Illustration

Kurt Nimmo
Infowars

Simon Maughn, co-head of European equities at MF Global, has told CNBC that a third round of so-called quantitative easing is in the works. The private Federal Reserve will again become the marginal buyer of bonds.

The latest effort by the Fed to finance the government’s staggering deficit will end in June.

If the private Federal Reserve owned by offshore banksters stops this lending scheme, interest rates will rise significantly which in turn will exert tremendous pressure on the American public. If interest rates surge anytime soon, millions of indebted Americans may default on their debt, thereby bankrupting the American financial institutions, as Puru Saxena, founder of Puru Saxena Wealth Management, notes.

When Money Dies: The Dollar Vigilante Interviewed on Freedomain Radio (Video)

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Global food inflation hits hemp seed, coconut oil and other superfoods: Here's why it's happening

Wiki Commons

Mike Adams
Natural News

Food inflation is hitting the superfood industry right where it hurts -- in the wallet. Thanks to several factors you'll read about here, prices on hemp seeds, hemp oils, coconut oil and other superfoods are set to skyrocket beginning in just a few days. One of the largest superfood suppliers in the USA, Nutiva, has announced an 11% price increase coming May 27th, and that may be just the beginning of an accelerating trend in steady increases.

In anticipation of this price increase, we've taken on a huge inventory of Nutiva's Certified Organic Hemp Seed and Hemp Oil at the old prices, and we have a generous supply available to NaturalNews readers who want to beat the price increase (see below).

Why hemp and coconut oil prices are heading into the stratosphere
In a letter sent to us by Nutiva, founder John Roulac explains that the price of coconut oil has doubled in the last six months. While coconut oil suppliers are able to absorb some of this cost in the short term, they cannot do so on a permanent basis. This means that the prices consumers pay for coconut oil are headed sharply higher.