What is your opinion of former Congressman Dr. Ron Paul’s prediction of a currency crisis, and financial failure for the US in the not so distant future? As a person entering his retirement years, this is beyond frightening.
What are your recommendations for the average citizen?
Terry Says: There have been predictions — and realities — of currency crises for at least 40 years. Just as a reminder, we had a “currency crisis” in 1979-80 — when everyone “hated” the dollar, and wanted to buy gold or soybeans or farmland, just to get rid of dollars. That kind of “currency crisis” is called INFLATION. It means that the government (really the Fed) is “printing” or creating so much money that no one wants it anymore, so it is no longer a store of value.
Now, in recent years, the Fed has done an overwhelming amount of money creation. (They go into the marketplace and buy bonds, and recently since 2008, mortgage securities — and pay for them with newly created money deposited into the banking system.) But what’s happened? So far, the dollar remains strong — the strongest currency in the world! That’s because despite all our problems, the US is the “least worst” place for the world to invest!!
And if you want to see a currency crisis in action today, go to Venezuela — where inflation is sky high and no one wants the money because the value keeps dropping every day. But in most places around the world, the money is not running in fear; it is sitting on the sidelines as businesses are scared to invest and grow their economies. (And to a lesser extent that is also currently happening in the US.)
What will happen in the future when all our bills come due? When no one wants to buy our debt because we have so much of it, and amass more every year? And when we realize that we have made huge promises and piled up not only our acknowledged $18 trillion debt –but far more? (Go to www.TruthinAccounting.org and look at their debt clock.) When the rest of the world fears that we will create many more dollars to pay off our IOUs?
That is when the US will have its own currency crisis. Then, Dr. Paul (whom I interviewed at least 25 years ago) will be right. But in the meantime, you can’t live your life in fear. Just “hedge” your bets, with equities, and some gold stocks. And speak up when Washington promises more than it can deliver (both parties) just to buy our votes!