Is a Run on the Dollar Starting Soon?
In response to a question from a reader I sent this out today:
Yes, I think a run on the dollar is coming. A lot of people are saying this, including a man named Dmitri Orlov who recently came out with a book entitled “Reinventing Collapse” that compares the crash of the Soviet Union in the 1990s with what he believes is coming here within a short period of time. I heard that at the last meeting of the G20 the U.S. asked Russia and China if they would agree to an orderly devaluation of the dollar, and the answer was “Nyet.” So something big is likely to happen. I don’t know what it will be. A worst case scenario is a wild hyperinflation of the dollar and a total collapse of the monetary system, followed by skyrocketing gasoline prices, etc., and another Great Depression. But the Federal Reserve is too smart just to let that happen, so they will likely try in some way to keep the economy afloat while engaging in an orderly devaluation that will reduce the overall levels of debt. There are many ways to tackle this but it will require strong central planning and maybe even “monetary reform.” The possible scenarios are endless and much depends on the political will of Obama and Congress as to how much control they can exert over the financiers. I am hesitant to predict total gloom and doom, though it is certainly a possibility. One thing that could trigger it would be if the U.S. can no longer buy oil from abroad. That depends also on whether “Peak Oil” really exists or not. But clearly big changes are coming. Our country has become so fragile. Most of our population is a month away from starvation when you look at the food pipeline.
Copyright 2010 by Richard C. Cook. www.richardccook.com
In January 1986 Cook became the first NASA official to testify publicly on the space agency's prior knowledge of flaws in the solid rocket booster O-ring joints that destroyed Challenger and took the lives of its seven astronauts. He told his story in the book Challenger Revealed, published in 2007. Publisher's Weekly wrote of the book: "Easily the most informative and important book on the disaster."
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Pingback by Is a Run on the Dollar Starting Soon? by Richard C. Cook « Dandelion Salad on January 19, 2010One frightening scenario is what we see unfolding in Haiti right now.
While other countries are sending medicine, supplies, food–the U.S. is sending the marines, the navy, air force, army–and no doubt the CIA, etc. (Tiny Norway with 4.7 million people has sent $17 million in aid; the U.S. with 305 million, will send $100 million–thanks to Obama’s “compassionate” heart! If our government matched Norway on a per capita basis, we’d be sending $1 billion!)
Haiti is a good dress rehearsal for the way we’re likely to see our government respond to disasters here. Haven’t we already seen this with Katrina?
Disasters are sure to come our way this decade–financial collapse–not to mention catastrophic earthquakes, hurricanes, droughts and other climate-change cataclysms. Let’s try to hone our humanity while we keep the boy scouts’ motto in mind–”Be prepared!”
Comment by Gary Corseri on January 19, 2010Thanks Rick. That was indeed a quick response! While the Federal Reserve obviously has a lot of power, they seem to be losing their grip on the dollar.
But does that really matter to them? The dollar is a national currency while the Fed is an anonymous, global power. Does that handful of unidentified bankers, hiding behind their secret curtain, really give a damn what happens to the American people or to the United States as a nation?
As Rachael Maddow proudly spouted recently, the Federal Reserve drew a 59.2 BILLION dollar profit in 2009. That’s not quite enough to cover the 3.5 TRILLION dollar gap between US GDP and American purchasing power, but it might make a nice down-payment, right?
Moreover, I’m not sure why Rachel wants us to believe ANY profit for the Federal Reserve Bank translates to a benefit for the American people. Does she not understand that the US government is a nonprofit institution and that the Federal Reserve is a privately owned bank? Does she further not understand the disturbing conflict of interests at hand in any relationship between these two entities?
Finally, is Rachel Maddow unaware of the extreme compromises imposed upon a representative democracy when its monetary system is managed by a handful of unidentified bankers who refuse to be audited?
Now here’s a link to the article that was originally sent to me:
A Run on the Dollar Starts Soon By Porter Stansberry
http://www.pinnacledigest.com/blog/edminnema/run-dollar-starts-soon-dailywealth.com
David
Comment by David Kendall on January 19, 2010Sorry. The figure is actually $45 billion, as reported by the Washington Post.
http://www.thestreet.com/story/10659463/1/fed-earned-45-billion-in-2009-report.html
It doesn’t surprise me that Rachel’s reporting was inaccurate, but $45 billion is still an impressive knife in the back for the American people — and a record profit for the Fed, according to the Washington Post.
David
Comment by David Kendall on January 19, 2010What the $45 billion figures seems to mean is that the Federal Reserve bought and held about $1 trillion in US Treasury debt during 2009. They held the debt because Treasury was so much in the red they couldn’t find enough investors to purchase it or didn’t want to run up additional interest charges. But the debt is still out there. It has to be rolled over or canceled at some future time and the Federal Reserve does not cancel debt. Also, that much money introduced without any backing is inflationary which is a hidden tax on the entire economy. So it’s not good news. It shows how out of control the debt really is.
Comment by rcook on January 20, 2010What I would like to know is, who paid the Federal Reserve this interest? How did they get it? Where did this private banking Federal Reserve institution invest this money in order to get this interest in the first place? Does anyone know? Or is this what you call auditing the Fed?
Comment by Donna Gaddis on January 20, 2010Agreed, Rick. In fact, in view of your observations, I can’t figure out why a public spokesperson like Rachel Maddow could possibly imagine a “profit” for the Fed might be in the best interest of any American citizen.
In this regard, I’ll take a stab at Donna’s questions. Please don’t be afraid to correct me if I’m wrong, because I’m certainly no expert.
First of all, nobody has yet physically “paid” the Federal Reserve any interest on that debt, as far as I know. The interest is eventually due to be “paid” by American taxpayers, but the Fed’s 2009 “profit” is merely a bookkeeping entry, just like all the other fictional “business” they conduct.
Where did the Fed invest this money?
“Invest” is dubious terminology in this regard, since the Fed actually created the money out of thin air — another bookkeeping entry — and loaned it to subordinate banks, like Morgan Chase and Bank of America, to be repaid with interest from the profits they generated from loaning that same money to productive enterprise to “stimulate” the American economy –that is, to “create new jobs”.
But instead of “creating new jobs”, the subordinate banks very predictably hoarded most of the money and awarded the remainder to CEO’s and other upper management employees in the form of “bonuses”. As a result, millions more jobs were lost, the US Treasury is still in the red (debt) and as Rick suggests, the increased “debt is still out there” floating around somewhere waiting to be either rolled over or canceled — and the Fed “does not cancel debt”. Instead, it will be rolled over and over and over again, collecting more and more interest that must eventually be paid by US taxpayers — workers like you and me, Donna — who are simply don’t have enough income to pay.
So, correct me if I’m wrong Rick, but this looks like yet another financial bubble just waiting to explode in our faces. How long should we estimate? Another year or two? Or will it hold through the next Presidential election?
Am I totally off base here?
David
Comment by David Kendall on January 29, 2010The report you heard about Russia and China rejecting an orderly devaluation of the dollar is probably false. Would they prefer a disorderly devaluation? If they understand the situation undoubtedly they would know that these are the only available options. On the other hand, a disorderly devaluation is in the program of the Illuminati, and the Federal Reserve Bank is an institution of the Illuminati. “Another Great Depression” has been underway for a year and a half now, but it will of course be greatly aggravated by monetary collapse etc.
Comment by Dave H. on February 24, 2010