Book Review & my own perspectives about the dollar
The Day After the Dollar Crashes, by Damon Vickers, released January 22, 2011
Mr. Vickers presents a very thorough and exceptional economic analysis. This is a must read for all.
The main point is that our total US debt (public and private) is greater than the world’s annual economy and increasing rapidly. Per present trends at some point either our creditors will stop financing our debt because of (1) it presents a poor investment or (2) they themselves will lack the liquidity. Our debt can soon overwhelm world monetary liquidity.
If you are leery about this (ex believe the NY Times or listen to Paul Krugman) then you must read this book. Mr. Vickers does us all a huge favor by researching all available data (much of it from the Treasury Dept) then methodically crunching the data to reach these conclusions. Mr. Vickers is a very successful investor who has predicted both financial market and economic ups and downs months or years before they occurred over the past two decades (predicted 2008 housing and financial bubble burst few years in advance).
This is the third book I have recently read that are similar and come up with fairly close conclusions. The two others were also well written by successful investors:
1 – Aftershock by Robert Wiedemer
2 – The Great Super Cycle by David Skarica
Quick sum of some core statistics (chapter 1):
$14 trillion == US fed govt debt
$70 trillion == unfunded liabilities existing social entitlements
$45 trillion == promises for mew entitlements
$129 trillion == SUM
Mr. Vickers presents a scenario whereby some event finally triggers a dollar collapse; within two weeks a New World Order (NWO) replaces current. The G20 and IMF are forced to ‘save’ the economic world by negotiating a restructuring of US and other debtor nation debts; this will hurt many creditors but then there is no other choice. The NWO is a new economic world government that issues a new currency and the only currency in the world. All nations will present their balance sheets to NWO and NWO will then determine how much a nation will receive, thus impacting all individual citizens. You may go to a bank with proof of your entire dollar denominated investments and receive ‘Y’ in the new currency where Y is a function of US balance sheet. In the end, compared to today, your ‘world’ purchasing power may be a small fraction of what it is artificially today.
Per Mr. Vickers the NWO will allow national governments. NWO will be a ‘limited’ world economic government. NWO will allow entrepreneurs and Capitalism to prosper. NWO will know that the private economy is much more productive than public. There will be no central economic planning such as that existed in the USSR. A main task of the NOW will be to control the money supply and national/world debt to prevent another world economic collapse.
What event can trigger this dollar collapse? Mr. Vickers lists many such as a Euro collapse, Korean upheaval, oil crisis, exploding energy costs, or unexpected poor US economic growth. May I add one here of my own? How about US not being serious about debt reduction and increased the debt ceiling this Spring?
Mr. Vickers perspective is that we have very likely already crossed a debt threshold and that no matter what we do, a dollar collapse and a NWO will happen. He is not certain of course when this may occur. He states it may be 9 days or 9 years.
I am however more optimistic. I believe we can prevent this severe dollar collapse; however we must act right away – like today. Many cuts are justifiable such as privatizing Freddie Mac and Fannie Mae, the Post Office, Amtrak, NPR, and cutting 20% of federal work force and cutting their pay 10%. Eliminate the Energy, Education Depts. Overturn ObamaCare. Replace our out of date and anti economic growth tax system with a pro growth simple Fair Tax, automatically eliminating the IRS releasing approximately 2% to GDP, the cost of complying with our complex tax code. Fair Tax thus stimulates economic growth and increases Treasury revenues this cutting debt. Also Congress should pass a law to allow for state bankruptcies. Union contracts must be restructured. Local and state governments must be cut and better coordinated (do not private companies do this successfully?) We should all implement these measures this Winter/Spring.
However this may not be enough. I thereby propose privatizing Social Security so that we can attain some benefit from it. Failure to do this will result in increasing our odds for that dollar collapse and NWO where we may wind up with zero Social Security, currently world history’s largest Ponzi scheme.
Also privatize all health care and health care insurance except for extreme and catastrophic health issue where the federal government (or eventually the NWO) will be the care taker.
All the above will be a very tough sell. Most Americans cannot imagine cuts in Social Security or public health care. Look at Greece right now. We must nevertheless present our citizens with the economic facts. We must forgive our politicians and ourselves for electing them. We have no other choices.
We are out of money. And our US government debt grows $4 billion a day.
January 26, 2011