What happens to America and Americans, if what happened to Argentina, happens here? It is logical to find out if it could happen here. I say it is almost unavoidable, and my reason is simplicity and logic 100%. Why could it happen here? Because America is committed to, and has promised to pay well over ONE HUNDRED TRILLION DOLLARS in the next decade or so. Over TWO TRILLION DOLLARS are payable in short term borrowings this year. America, in short, owes everyone. It owes its citizens trillions of dollars, because citizens have loaned their dollars to the government when they bought its debt in the form of T-Bills, Treasury Notes, and the like. America owes China trillions of dollars, and trillions to other nations and other nations’ citizens, who have bought US debt. The debt is so huge, that it cannot ever be paid, other than by printing press dollars, which can eventually become worthless, just like the other three American currencies went to zero.
Other three? Yes. During the Revolutionary War, the fight with Mother England was so costly, that printing press money was resorted to, to pay the costs of the war. By the grace of God, (literally, I believe), we won, but the ’Continental Dollar’ went to zero. Those who had savings accounts in Continentals lost their wealth. All of it. Fortunately, there were a lot of gold “pieces of eight” around, which is a future column.
In the War for Southern Independence, incorrectly called the ’civil war,’ the South printed their confederate dollars, and the North printed their ’greenbacks.’ Both sides had huge costs fighting the other side, and there wasn’t enough gold in either treasury to fight the wars. Printing presses were put into use, and endless streams of un-backed paper scrip flooded both sides of the war. The result was that both confederate and greenback paper monies became totally worthless. They were printed and printed and printed, till they literally could be used as bathroom tissue, and not much else. In hindsight, everyone can see the utter futility of what happened those three times. Hindsight is always 20/20. Why can’t people recognize the same thing happening now?
(As an editorial comment, the war should have never taken place, and I strongly urge you to obtain and read the book, “The Real Lincoln,” by that superb writer, Thomas DiLorenzo. You buy gold and silver, and do a lot of things with your dollars, why not buy a few books occasionally? After you read that book, you, like me, will wonder why in the world, Republicans so worship that lying, thieving, man.)
It is patently obvious, that if one had saved surplus assets in greenbacks, confederates, or continentals, they would have lost their savings. “Oh, this is different,” you say? Please, please, please, tell me how this is different? The 535 members of Congress, both Republicans and Democrats, spend wildly, use earmarks with impunity, and ’bring home the bacon’ at every possible opportunity, so as to get re-elected. They voted to allow George Bush to go into Iraq, and Afghanistan, and Obama hasn’t removed a single troop, but added another 30,000. Each troop costs about a million bucks a year in transport, equipment, supplies, medical, and care after returning home. That figure is official, not mine. “A billion here, and billion there, and pretty soon, you’re talking about real money,” is the famous quote. Except now it is a trillion here and a trillion there. The debt clock shows the official current national debt of well over $12 trillion, and going up rapidly. This does not include the hundred trillion the government is going to have to pay in the future. So, how is it different now, than in 1865, or 1776? It isn’t.
The dollar has lost 30% in the last ten years, under Bush and Obama, and it has lost 98% of its value or purchasing power since FDR. Those who currently have savings accounts or CD’s, get from one half of one percent, to maybe two percent interest. The inflation rate is far higher than that, so right this very minute, those who save in dollars, (99% 0f Americans?) are losing their capital every single day. The interest rates will remain the same, according to the Fed chairman, so 99% of Americans are being slowly de-capitalized. What happens if an Argentina scenario happens here? Everyone with a savings account, life insurance policy, annuity, or dollars tucked under their mattress, will suddenly be a lot poorer. The rich will become poor, possibly in a very short time.
The same thing can happen here, as happened in Argentina or a hundred other places, when a currency went to zero. A frantic effort to spend it before is goes down further, is what will happen here. Empty stores, riots, fights, lawlessness? Possibly. It has happened exactly the same everywhere else when a currency fails. How long could this take? Maybe there will be an official devaluation first, which means that the rich will be only half rich, and your dollars will buy only half as much. I have no crystal ball, but do know history, and am a supremely logical person. History ALWAYS repeats itself, unless those involved change their ways, and this has yet to happen. “Experience conducts a dear school, but a fool will learn in no other.” – Ben Franklin.
As usual, government grows, and grows, and grows, and the masses think that government will fix all the problems, rather than realizing that the more government there is, the worse things will get. I love books, and just finished reading an old book about a four time governor of Georgia, named Eugene Talmadge. Gene was a colorful, vain, crude, hard drinking, poor, dirt farmer, who always said it like it was, and said it with a great vehemence and speaking voice. One of his quotes, made in 1934 was, “If you have a rich government, you have poor people, and a depressed people. If you have a poor government, you will have a rich and happy people.” Once, Gene lost to a ’New Dealer,’ named Rivers, who spent as Washington now does. Gene hated FDR with a passion, and vetoed every New Deal bill that was presented to him. He lost to Rivers, who bankrupted the state with his spending. From page 168: ” The concomitant social advances and economic misfortunes of the Rivers administration convinced the irrepressible Talmadge that all he had warned about had suddenly come to Georgia, and his only course in halting the New Deal was to run again.” He did, won, and put the state back together again. He died in his fourth term as governor. Herman Talmadge was his son.
No one can economically put America back together again, because of the commitments made by politicians of both parties. The bills must be paid, the world’s largest default must take place, the dollar must be devalued, or become virtually worthless. Whatever happens, those with dollars will be made poor. If it is any consolation, all of the world’s currencies are backed by a big fat zero, and all are being printed to pay respective government bills. All of the world is being decapitalized by saving in the world’s un-backed currencies. BUT, American dollars are declining the fastest, because of fighting two wars currently, plus fighting Korea and Vietnam for no earthly reason, both of which took a chunk out of the dollar’s value. If Constitutional Republicans clean the slate this year, as it seems will happen, they can certainly slow the process. How many more rat-like Demos will jump their sinking ship? The handwriting is on the wall for a lot of them. “What goes around, comes around.”
While Greece, Spain, Japan, and the UK are also in deep trouble, they haven’t promised and committed to a hundred trillion dollars in the future, nor are they throwing their currencies away in Afghanistan and Iraq.
The dollar’s continuing to lose value and purchasing power, and with increasing velocity, is not deniable. It is a simple fact of life, that as Stott’s Law states, “The more of anything there is, the less they will be worth,” and that includes dollars. donuts, desks, drapes, donkeys, diesel fuel, and drinks of all sorts. Save in them if you wish, to get out of failing dollars, but gold and silver are a lot easier to buy, sell, store, and transport. Why are dollar savers so set in their ways, and refuse to listen to the most basic, logical, historical reasons, not to do so? You tell me.
P.S. I really think that people who have gold, silver, dollars, or anything of value stored overseas, should get them physically in their hands. An administration like the current one, may possibly panic and prohibit all imports and exports of valuable things. Why would anyone have something of value, not in their own hot little hands? You own something, but don’t have physical possession of it? Makes no sense. We have a Democratic Party, and a Republican Party. Why not a Tea Party? Literally! Makes a lot of sense to me.