Prospects for the U.S. Dollar

Looking back, I now realize that it did not take long for liberals (Democrats) to regain control of the underpinnings of the U.S. economy after the end of the Second World War. I should have understood this years ago when the U.S. Geological Survey imploded.

Today, it is not that the U.S. has no domestic resources. It has simply lost its ability to find them without the stream of macro-logic that should have come from a vibrant Geological Survey organization. It doesn’t help to have all access to existing resources choked off by liberals who are certain that five hundred arctic caribou trump a million shivering American children.

With no accessible remaining resource reserves to provide a basis upon which to value the U.S. currency, we must look for a productive labor force to provide the needed value added.

Sorry, but that doesn’t cut it either. Wal-Mart buys shirts for a dime in China and sells them to westerners for ten dollars each. Americans are not well known for tolerating slave labor.

So what will become of the U.S. dollar? The future is already here. It just hasn’t happened yet. When you see the Fed buying worthless collapsed mega-financial corporations using billions of U.S. dollars, you should ask yourself: Can you really buy nothing for something? The accurate answer is NO.

The Fed is paying worthless dollars for the worthless skeletons of former financial giants. Worthless dollars? That’s not a rosy forecast.

The U.S. and Britain led us to the blessing of freedom on our small planet. The U.S. and Britain rallied to defend precious freedom during World War II. Can the ethical core of freedom (U.S. and Britain) recover one more time? Can the U.S. rescue itself from itself? Or will all of us lose this war without a shot fired?

I cannot answer these questions, but I do know that precious freedom is at stake. So now you have what I would describe as “the big picture”. But where does that leave you and I? Well, there is a strange twist.

If government mismanagement takes the whole free world economy down, then in relative terms, government itself will likely do better than its private sector victims. That is because through taxation, governments finance themselves on the backs of whatever is left producing, and governments don’t declare themselves bankrupt.

Canada is an energy/resource rich country, so Canadian cash or treasury bills make sense in relative performance terms.

In the U.S., even if the U.S. dollar continues to go south as I expect it will, U.S. cash and/or T-Bills might still be preferable in relative terms to most other U.S. investment alternatives in their domestic market.

We are not between a rock and a hard place. We are under a rock in a total wipe-out. Hang onto your hats!!