In Jim Cook's Archive


The Russian threat to sell $200 billion in treasuries should be cause for alarm among dollar holders. It could cause other countries to sell or at least stop buying our treasuries. This is the first time our debt has been used against us in this fashion. It brings the problem front and center. What if the Chinese have a confrontation with us? Will they sell our bonds, notes and bills? What would Japan do if we sided against them in a dispute with China? These countries have the biggest concentrations of our debt. If either country started selling a portion of this $2 ½ trillion, the dollar would sink like a rock and inflation would explode.  We are terribly vulnerable because so many dollars exist ($16 trillion).
Nobody has been more accurate with their predictions than the economist John Williams. He claims that the dollar will crash and burn this year. He predicts hyperinflation.  If so, get prepared for $1,000 a barrel oil and $32 a gallon for gas. This kind of inflation will cause paper wealth to vanish.

Does anyone in the current administration ever do the math? The budget is approximately $4 trillion. Revenues are about $3 trillion. That’s about $1 trillion short. We can’t borrow close to that much if anything at all. Recently, foreign countries have been selling our debt.  That leaves us printing at least a trillion.  If any further selling of our debt from foreigners takes place we’d have to create billions more out of thin air.  The Russians have managed to show the world our Achilles’ heel.  Too much debt has made us vulnerable. Our enemies and so called friends would delight in our comeuppance. Expect selling of the dollar to become a bigger factor than ever before. Whatever happens could happen fast. The situation is far more serious than Washington or Wall Street would have us believe

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