Ron Paul Warns of Dollar Collapse 100% In 28 May 2016 – China And Russia Are Preparing For A Bankrupt US Financial System
Ron Paul Warns of Dollar Collapse 100% In 28 May 2016 – China And Russia Are Preparing For A Bankrupt US Financial System
U.S. National Debt
When the government spends more than it collects, the result is additional debt. From the signing of the Declaration of Independence in 1776 until 2008, the U.S. accumulated slightly over $10 trillion in federal debt. In the past seven years, the debt has nearly doubled to more than $18 trillion. By the year 2019, it is projected to exceed $20.3 trillion. When interest rates rise, the impact will be felt by the federal government as well as everyday Americans. First, it will increase the government’s cost of borrowing, which will cause the debt to rise even faster. It’s entirely possible that even a modest rise in interest rates could cause the debt to spiral out of control.
This is because Washington is heavily dependent on borrowing to operate. Next, it will be much more difficult to expand or even maintain the welfare state. This fact alone will lead to mass riots as individuals who are dependent on a government check will take to the streets in protest. Also, the U.S. would have a more difficult time funding its presence (i.e. military bases) around the world. This would lead to a less stable socio-political environment and an uptick in radical behavior. Plus, a shortage in government revenue could result in a rather large tax increase and the eventual demise of the middle class. Finally, and as we’ve already seen, the federal government may decide to target 401ks and IRAs as a source of additional revenue. This could take the form of a tax or fee of some sort. Mr. Paul also mentioned the possibility of a tax on regular savings and other assets. If the government finds itself in a tight situation, as we’ve witnessed in the recent past, the potential intrusion could be severe.
Is the U.S. Losing its Stature?
In the post WWII era, the U.S. dollar has been the global reserve currency. Prior to that, the British Pound filled this role. Recently, China has increased its trading with Germany, India, and others, excluding the dollar as the reserve currency. It seems the world is slowly transitioning away from the dollar. If this continues, the U.S. could lose its position as the world’s reserve currency. This would have numerous ramifications. A discussion on that is beyond the scope of this article. Mr. Paul also stated that 10 countries have already signed a document to begin phasing out the dollar as the basis of trade. Even the IMF has proposed a new world reserve currency system. The days of the U.S. dollar as the world’s reserve currency may well be numbered.
Some argue that the U.S. economy is on the mends and the stock market is near record highs. Therefore, things can’t be all that bad. While there is truth in this, according to Paul, stocks have risen due to Fed policy and political leaders. He also stated that printing money has never solved this type of problem….ever! He cited Germany, Russia, Argentina, Brazil, Chile, Japan, China, Ukraine, Italy, Ireland, Portugal, and Spain as examples of countries that had similar problems to the U.S. and yet none of them was able to use the printing press to escape their problem.(source)
Will the U.S. follow the path suggested by former Congressman, Ron Paul?
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