Wednesday, March 25, 2009

The Death of the Dollar

This is a quick but perfectly accurate overview of the mess the US is finding itself now in and thus I wanted to share it with you all. The author is an evangelical Christian Zionist who is not good at reading the signs of the times (I've read his stuff before and he's a rabid dispensationalist).

So it makes you realize just how obvious the current situation must be when even people like him can see it coming!



The Death of the Dollar
By Jerry Robinson


At the end of the 19th century London was the capital of a global superpower. Through aggressive colonization the British Empire then controlled more geography than any previous world power. By the end of World War II, however, Britain’s excesses had plunged the country into economic devastation.

In July, 1944, a world economic summit was held at Bretton Woods, New Hampshire. This groundbreaking international gathering included 730 delegates from over 40 Allied nations. Established at this conference were the World Bank, the International Monetary Fund, and the General Agreement on Trades and Tariffs, later known as the World Trade Organization. The United States linked its dollar to gold at $35 per ounce and all other currencies then linked to the U.S. dollar. This gave America and the U.S. dollar global economic supremacy, all backed by gold.

Then along came the Vietnam War of the 1960s and 1970s, placing a severe strain on America’s economy. Inflation grew, the country faced its first trade deficit in the 20th century and other nations lost faith in America’s ability to maintain its economic strength. In 1971 President Richard M. Nixon officially detached the U.S. dollar from the gold standard established in 1944. Ours became a fiat currency based on faith in the system and faith in the federal government.

Recognizing the potential decline of the U.S. dollar no longer backed by anything except faith in America, Washington moved quickly to ensure a global demand for our currency. The federal government obtained agreement from the Oil Producing and Exporting Countries (OPEC) that oil would be priced exclusively in U.S. dollars, regardless of whether it was sold to European, African, Asian, South or North American countries. The “petrodollar” system bolstered faith in the paper-only fiat currency.

Today the mighty U.S. dollar is still the world’s reserve currency, but its days are numbered. I firmly believe that we will witness the downfall of the U.S. dollar system within the next decade. [I will be surprised if they get through this year] There are several reasons why the dollar must collapse, and 3 specific threats to our endangered U.S. currency:

* Excessive printing of money
* The lack of a strong dollar policy
* A growing aversion by foreign nations to hold U.S. dollars

Assume at the beginning of 2002 you placed $10,000 into 3-month U.S. Treasury Bills. At the end of 5 years the buying power of your dollars would have decreased by $116.19, or 1.2%. If, however, you had put only $5000 into Treasury Bills and bought gold with $2500 and silver with $2500, your buying power would have increased by $5,977.28, or 59.8%.

Today America’s deficits are hitting all-time highs, the credit crisis worsens daily, and the money supply expands at a record pace, triggering fears of widespread inflation. Clearly, a financial day of reckoning awaits this country and its arrival will become a rude awakening to all who are not prepared. Unfortunately, the U.S. government is doing little to prevent this impending dollar collapse.

Seeing what lies ahead should make Christians glad our true investments are safe in Heaven where “neither moth nor rust destroys and where thieves do not break in and steal.” (Matthew 6:20)

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