U.S. Dollars are just a whisper away from losing a century's status as the world's reserve currency.What's more, under federal coinage law, there is no legal barrier to the creation of alternative currencies within the borders of the nation. None.
Personal money managers are urging people to place their assets beyond government control, to invest in precious metals and investment assets you don't have to report.
Strong talk, but it makes sense. Why?
Because the government could easily seize control of banks, 401K retirement accounts, pension funds, and securities should the dollar lose its status as the premier currency requiring no exchange rating, money managers are cautioning an economic crash that would dwarf the debacle of 2008.
All the executive orders are in place to seize communications, manufacturing, transportation, fuel, groceries and manpower and bring them under emergency executive control.
How would it take place?
Should the OPEC nations refuse to increase production and the U.S. government continue to block development of petroleum refinement capacity because of environmental regulation, the U.S. dollar would come under huge pressure. The Federal Reserve would be forced to increase the money supply, thereby devaluing the basic unit of currency.
If the Treasury's foreign creditors such as China, which never brings dollars back into their economy, but invests them in the deepest, most liquid pool available, the Treasury Bond market to keep their value as high as possible, should call their debts, the U.S. Treasury would be deep in the dip.
About 150 alternative currencies are presently used in the U.S., including privately backed certificates issued by banks and merchants, Yen, Yuan, Euros, Swiss Francs and a new currency called the khaleeji, or “of the Gulf”, or the karam, which means “generosity,” scheduled to be released soon by the Gulf Cooperation Council.
It's a coalition of petroleum-producing states in the Persian Gulf region, including Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. With a gross domestic product growth rate gauged by the IMF from $717.8 billion in 2006 to a predicted $1,212,112 billion for 2009, the region is an economic powerhouse, to say the least.
Yemen wants in, but the top dogs such as Qatar resist full membership for the desert republic. The United Arab Republic is out, but Iraq is a strong prospect for membership. So it goes.
The United States' unfavorable balance of foreign trade in manufactured items and components, clothing, tools, appliances, textiles – the works - could easily persuade top exporting countries that presently prop up the dollar's worth by buying into Treasury bonds flying the coop for greener pastures overseas.
The cascade would be spectacular to behold as it falls from its dizzying heights of trillions stacked upon trillions.
Meanwhile, America continues to export its mineral wealth in the form of coal, which the Chinese liquify and hoard against the prospect of the inevitable energy crunch to come.
The equivalent of a gallon of gasoline in liquefied coal fuel is said to have a carbon footprint about 18 times that of gasoline.
There isn't much chance the Chinese are interested in the reduction of greenhouse gases or the greening of anything much besides their bank accounts.
Is there a way out?
Yes, but it's probably only a beginning. It won't be easy and it won't be attractive, but there are alternatives.
First, stop the government's hostility to business investment.
Restore the oil depletion tax allowance.
Allow the development of new refineries on full depreciation schedules to meet the increased demand for hydrocarbon fuels.
Erect new and reasonable trade barriers that will require manufacturers to produce their goods on American shores using American workers.
Painful?
You bet, but it's nowhere near as painful as watching kids starve or having to keep an armed guard over your home, larder and gardens.
By the way, did Lindsay Lohan ever get out of rehab? Or what?
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