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Jim Cook

 

RUNAWAY SOCIAL SYMPATHY

Every once in a while I switch the TV channel from Fox to CNBC to see what the liberals are saying.  After listening awhile I get a deep sense of hopelessness and foreboding for our country.  The most important thing for the left is giving money to people.  They are happy to see the growth of food stamps, disability payments, housing subsidies, free healthcare and all the other welfare benefits.  They utterly fail to see the damage it is doing to the recipients.  Whole cities that once flourished have deteriorated into rotting eyesores populated with shambling hulks of chemically dependent drones.  These people are no longer employable.  They have become incompetent and helpless and the liberals can’t see that it’s their doing.

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The Best of Jim Cook Archive

 
Best of Richard Russell
March 22, 2011
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I've been saying this for years; the Achilles Heel of the US economy is the dollar, or I should say the weakening dollar. Few Americans realize the advantage the US has enjoyed over the years in being able to print (manufacture at no cost to us) the very currency that our debts are denominated in.

But as the Fed prints billions of its Federal Reserve Notes, the purchasing power of the dollar sinks ("too damn many dollars."). It's getting to the point where the rest of the world is highly suspicious of the very worth of the dollar. As suspicions rise, the international value of the dollar (compared with other currencies) sinks. And nations mull over whether it makes sense to actually hold dollars.

I blame the weakness of the dollar on the rise of fiat currencies. It's because of fiat (non-tangible) currencies that the US has been able to print (out of thin air) trillions of dollars that it never earned. Through the years, I've ranted and raved against the institution of irredeemable fiat currencies. The US owns the single currency that since 1971 has been accepted by nations around the world. The US dollar is the world's reserve currency; it is held as part of the reserves of literally every nation in the world.

But as the US indulges in creating trillions of new dollars, resistance is building against the reserve status of the dollar. In some areas, dollars are no longer wanted. People no longer trust the dollar as a currency and as a store of value. They don't want to hold dollars for any length of time.

Somewhere ahead (and I don't think it will be too long), the reserve status of the US dollar is going to bump into the stone wall of nonacceptance. In fact, resistance is already under way, as we can see in China's "deals" with a few of its trading partners in which business is transacted in non-dollar currencies (the yen).

I believe that all fiat currencies are increasingly coming under suspicion. You can't manufacture true wealth out of a computer, and people are beginning to realize that. Over a period of years, almost every fiat currency has been losing value against the time-honored benchmark currency -- gold.

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