It’s not ideal that the dollar, the world’s reserve currency, has been turned into a Ponzi scheme that even Bernie Madoff once warned of. However while it’s easy to picture a collapse of the dollar leading to complete Armageddon, is that really what necessarily has to happen?
As the stock, bond, and real estate bubbles that have been inflated since the last one crashed continue to grow, the concern that this time the dollar could be the ultimate victim increases by the day. When the housing bubble collapsed 10 years ago the Fed came along and basically printed cash to buy what nobody else in the market would. Yet over $4 trillion and little progress years later, many continue to wonder if this time it will be the central banks and their currencies that need a bailout.
When this all occurs is still open for debate. But as debt ceiling limits come and go without any sign of fiscal responsibility and central banks are now even buying stocks, the signs that the dollar’s day of reckoning is approaching continue to build.
Many, including myself at one point in time, have feared this scenario due to the severe economic implications that come along with such an event. But would the end of the dollar really be such a bad thing?
Keep in mind that the dollar has lost approximately 99% of its value since the Fed was invented (ironically with the mandate of price stability). In other words, the banks have stealthily stolen almost the entire value of the currency while hoping no one would catch on. So of course when it comes to paying for things like health care, it’s not that easy when there’s only 1% of the pie left to be divvied up.
Printing money also facilitates the U.S. government’s ability to spend money it doesn’t have by simply having the Fed to print whatever it needs. Hardly a model of stability for the world’s reserve currency.
In other words, the dollar has facilitated the greatest theft of wealth I can find in history. So if people finally lose confidence in the current system, isn’t it at least possible that in the long-term we could be a lot better off?
This isn’t to say that the adjustment won’t be a challenge. Although by continuing to understand what’s happening that Wall Street won’t share in the mainstream news, it doesn’t have to be the complete breakdown in society that many of us have been indoctrinated to expect.
Consider the following example of what happened in Greece following their own economic chaos a few years ago as they struggled to conform to the flawed Euro system.
No one really knows how the details will unfold, but as time goes by my faith in the productive entrepreneurial spirit of mankind leads me to believe that better times are ahead.
After all, wouldn’t you like to have the 99% of your money that the banks have been treating themselves to over the past century?