Most reports in the US media are quite optimistic about the US economy “on its way to recovery”, but the fact is that there is an even bigger crisis lurking that will have ripple effects all over the World. A specific event is going to take place in America and other countries in the near future. An event where the savings of millions might be wiped out because of the present monetary policy.
That painful loss will only be one of the many consequences of the US dollar no longer being a major World currency reserve.
The meaning of the monetary equation is that debts don't just disappear. Much less when they are in fact increasing hugely, as it is in fact happening in the US (see chart). And one of the major problems resulting from excessive debt, wrong budgetary policies and monetary devaluation is that commodity prices are about to soar.
US Currency will lose value, maybe not against other important currencies that will suffer similar devaluations, but against the purchasing power of individuals and corporations.
What we do not hear anyone reporting or discussing in the field of public opinion is the ominous fact that in the present situation, even if all the US citizens were to be taxed up to 100% of their income, the US will still not be able to balance the federal budget as it is being projected. Policy makers ignore for political expediency that with each additional budgetary commitment the debt crisis worsens.
The US dollar is the major World's reserve currency. Therefore, the US government is simply printing more dollars to cover its budgetary waste. It is the easy solution. And that is what the US government has been doing since 2009 with no apparent limitation or regard for future consequences. Today the US owes more money than all other World countries together, while the Treasury is repaying the debt by printing trillions of new dollars (see chart).
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