I have purposely refrained from entering political waters on this blog because most folks are as tired of politics as I am, but after the circus that just took place in DC the last couple weeks I am compelled to bring your attention to a couple of things. Rest assured, I will not be taking sides, or taking some kind of political stance. I write this only out of concern for your own well being.
Right now one side is celebrating their “victory” and the other side is licking its wounds. If your focus has been on “your side” winning then you have taken the bait, hook line and sinker, because in the end, all of us lost. People who have focused on their side winning often fail to see what the government has done to us all, because for them, it’s only about their side. In the end, all that Washington accomplished was to agree to continue printing fiat currency out of thin air to pay for things our nation can’t afford. Is that really something to celebrate?
In fact hidden within the legislation that was signed by the President is a way to make sure the free for all spending habits of Washington can continue without Congressional approval. Of course it’s unconstitutional, but congress is making it a habit to tear pages out of the constitution and shirk their duties because it gets in the way of being re-elected. As signed into law, the President now has the authority to waive the debt ceiling and this can only be overridden by a “resolution of disapproval” by Congress, something that the President could obviously still veto. Even the slightest whiff of fiscal responsibility has now been removed from the realm of possibility in all U.S. governmental matters. The checks and balances created by our Founders have been removed and there are no longer any brakes on the out of control locomotive that is our nations spending. It leaves no doubt that our currency will be seriously de-valued, impoverishing millions. Still, Americans don’t seem to get it, but foreigners do. The commentary out of China’s state media the other day was very clear: “It is perhaps a good time for the befuddled world to start considering building a de-Americanized world.”
From a historical standpoint it’s really nothing new . All the great civilizations have taken this well travelled road. If that were not the case then gold and oil might still be priced in the denarius, the old Roman currency, but the Romans destroyed the denarius the same way we are destroying the dollar. The Greeks followed up by doing the same thing and so did the British. Apparently it’s our turn now and China stands in the wings ready to take over.
Few Americans understand or appreciate the privilege and the benefit of the dollar being the world’s reserve currency. In India for example, when they want to buy oil or gold they must first convert their rupees into dollars. This supports the dollar and since all other nations must do the same that demand for the dollar makes it stronger. Economists toss a lot of numbers around, but the middle road seems to be about a fifty percent loss of value if the dollar were to lose its reserve currency status. History suggests that devaluation would happen overnight and then it would be downhill from there. As the nation’s credit rating fell and debts were defaulted on, it is speculated the dollar would end up retaining maybe only twenty percent of its value. Many societies have seen devaluations much worse than that.
Along the way capital controls would be put in place by the government to prevent people from moving their money out of the country. Restricting the free flow of capital across borders and trapping it inside the country, to be forcibly devalued is a time proven method of all countries experiencing bankruptcy. Oh, and guess what just happened, beginning Nov. 17, Chase bank will begin doing exactly this. Announced while everyone was celebrating the great achievement congress managed in raising the debt ceiling (in other words, in the hope few would notice) they will begin restricting cash withdrawals and ban business customers from sending international wire transfers. This is how it begins folks. It’s not make believe. These are real signs history has proven are the marks of a nation approaching bankruptcy.
You know how it is said that history repeats but never in exactly the same way. Well then, consider this next part of the equation. In looking back from today’s perspective the majority of economists agree that the Great Depression was caused when the Federal Bank tightened (raised) interest rates thereby seriously damaging the economy. Obviously the Fed is not raising interest rates today, but is another government action going to accomplish the same thing this time around? The answer is yes, quite possibly.
The Affordable Care Act carries horrible economic consequences for working families and our nation’s businesses. By the time it is fully implemented over the next few years I believe it is entirely possible the so called Affordable Care Act will fill the same role today as the Fed’s raising of interest rates did prior to the Great Depression. At the very least your dollars will be devalued as millions more people are taken under the governments wings and trillions more dollars will have to be printed.
Do you realize when the debt ceiling is raised it is YOU who are devalued? Every time we raise the debt ceiling, which can now be freely done without congressional approval, we print money out of thin air and this devalues the dollar. In just the last ten years alone the dollar has been devalued by more than thirty percent. It makes the items you purchase more expensive. I used to think Americans would wake up to this and demand a change but I no longer see that happening because the majority of people do not understand basic currency fundamentals.
So you’re asking, what’s my point in all this? Well don’t look to me to be the one telling you we need a revolution and that we should all take up arms. A revolution will probably happen, but you won’t find me advocating violence, instead I encourage you to take up a shovel. It takes a few years for fruit trees to get their roots down and really begin to produce. It takes years of practice and experience to learn the nuisances of gardening and food preservation. If raising more of your own food is something you’ve been thinking about, but have been putting it off, it’s time to begin, the time is here.
Our nation is travelling a well worn path taken by innumerable societies before their economic collapse. History demonstrates that ALL paper currencies come to an end. So before you wake up one morning and find that you are locked out of your bank account and the dollar has been devalued fifty percent over night, (Argentina is a fairly recent example of this) picture yourself in that situation and consider how you would manage. As a nation we cannot print money forever and when the day comes that the dollar is no longer wanted by anyone, what will you do?
You may consider my view of things outlandish, but history backs up every claim I have made here, so your argument is with history not with me. Besides, I don’t have a dog in this fight and have chosen to write this piece for just one reason – you. I care about you and others who are going to be hurt by the devaluation of our currency. Can you eat that lawn you are growing? Why not tear it out, produce some healthy food and learn how to store it.
I would be the last person to even guess at a time table when things will happen, but viewed from a historical standpoint, it’s likely to be only a few years before a significant event takes place that removes the dollar from the world stage and devalues it accordingly. For your own sake I encourage you to get started now and take the first steps to grow some of your own food and by that I mean something more than salad greens. It really could be the difference between feeding your family and going hungry.
In the future I promise to stick to gardening and in fact have a recipe I want to share with you. But for just this one time, I hope you will heed this warning and begin to take some steps to provide some of your own food. My best to all of you.