Trying to figure out how the U.S. dollar’s swan song is going to play out is among the favorite parlor games among analysts these days. And the truth is, none of us really know!
But there are some tantalizing warnings out there for those with the courage to pay attention to the grim realities now unfolding.
The National Inflation Association recently pointed out that the Federal Reserve is buying a whopping 70% of U.S. government debt. This is the most inflationary thing a country can do. But the U.S. feels forced to fill the void left by waning foreign purchases of U.S. debt, which have fallen from 50% of all debt issuance to 30%.
So our government is essentially writing and cashing checks to itself.
Last Monday, even the politically compromised Standard and Poor’s credit rating service had no choice but to lower its long-term outlook for U.S. debt from “stable” to “negative.” Disturbingly, it still gave Uncle Sam a AAA credit rating, despite the fact that government finances are hanging by a thread and totally dependent on desperation-level money creation to stave off a major cash flow crisis.
This government-debt Ponzi scheme is many years in the making, and readers of my two subscription publications – Independent Living and Money, Metals, and Mining – are well aware of the problems brewing now, the coming storm, and how to protect their wealth from the impending collapse of the dollar.
An important note: S&P only downgraded its “outlook”, which means it may lower the U.S. AAA rating in the next two years if Congress doesn’t fix its problems. In other words, it’s just a warning!
There’s Something Fishy Going on When Government
Debt Can Maintain AAA Rating
It’s a shame S&P has dragged its feet for years to warn the average citizen of the dangers ahead. Why the lag? Chalk it up to another blatant example of crony capitalism. Should we trust the S&P’s ratings? Remember, during the subprime-mortgage market fiasco, S&P maintained AAA ratings on many mortgage-backed securities up until the day they imploded. Something doesn’t smell right.
Don’t Let Your Guard Down
Behind the curtain of the bond and stock market circus and government newspeak, the smart money globally is shunning U.S. paper, seeing the inflationary destruction ahead.
I hope you’ve been taking to heart the insights we’ve issued for the past two years – long before the S&P’s revised outlook – and are using them to fine tune your own contingency plans. But so many others have issued dire warnings in recent weeks and months:
The implications for your future purchasing power are dire…
Good news for sound money advocates and gold and precious metals investments:
Protect yourself from the toxic dollar with a safe-haven portfolio for inflationary times. It should contain a multitude of assets such as precious metals, commodity-related stocks, emerging markets stocks, dividend-paying stocks, and alternative cash cushions found in foreign currencies.