There is this guy, an investment adviser named Porter Stansberry. He has been all over the airwaves and web for weeks promoting a video he made called “End of America.”
The radio ad, which seems like it is playing constantly, tells how this wealthy American is making a prediction that a single event could change America forever and it might happen this year!!
Being a sucker for doomsday prophets, I watched the lengthy video. My first take on it was that for such wealthy American, the production values on the video were horrible. That said, rather than initiating laughter, his doomsday scenario sparked some thought on my part. For the “event” he is predicting is a real possibility, even this year. And if it happens, the ramifications would be, if not doomsday, very serious for the American way of life.
Now his prediction is not an asteroid, or a terrorist attack, but something much scarier.
He predicts that the US dollar may lose its status as the reserve currency this year. And if it does, watch out.
Stansberry states that most people do not understand how much of our way of life is pegged to the quirk of history that made the US dollar the reserve currency for the last 50 years. If we were to lose this status, almost everything would become more expensive, inflation would skyrocket, and our economy would completely collapse.
No one can really know all the ramifications of such a sea change as losing reserve currency status, but doomsday or not–it would be real real bad.
Why am I mentioning this now? This is what greeted me on Drudge this morning.
What can seen in this snapshot is Porter Stansberry’s ad up top, and the headline signaling the doom he predicts below.
NEW YORK (CNNMoney) — The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world’s reserve currency.
The IMF said Special Drawing Rights, or SDRs, could help stabilize the global financial system.
SDRs represent potential claims on the currencies of IMF members. They were created by the IMF in 1969 and can be converted into whatever currency a borrower requires at exchange rates based on a weighted basket of international currencies. The IMF typically lends countries funds denominated in SDRs
While they are not a tangible currency, some economists argue that SDRs could be used as a less volatile alternative to the U.S. dollar.
The reason other countries want an alternative to the greenback as a reserve currency, the currency that most international transactions occur in, is because of the rapid devaluing of our dollar by this administration.
To cover for the record spending and consequent borrowing, the US has been printing money like mad and monetizing our own debt. This forces the value of the dollar down, down, down.
This is a real concern not only for the inflation it is certainly destined to produce, but because other countries are getting worthless printed dollars for the real money they lent us. If the world flees the dollar as a reserve currency, commodities of all kinds, especially oil, would skyrocket. And US inflation would likely skyrocket. And our economy would be pushed to the brink, if not over it.
The only way to avert this disaster is with real fiscal discipline, and sadly that does not seem to exist on either side of the aisle. While Democrats want to spend and borrow even more, Republicans argue over whether to cut $32 or $100 billion out of $1,400,000,000,000.00 deficit. So the best case scenario is a $1,300,000,000,000.00 deficit. More and more debt. More printing money. More monetizing the debt.
Perhaps a real doomsday approaches for America, and we have no one to blame but ourselves.
February 11, 2011 at 4:12 pm
Yes, we need to get our financial house in order, but,
1) Stansberry has been fined twice by the SEC for fraud. In both cases he tried to scare people into buying his investment products. Go to the SEC litigation page and search on his name for for details.
2) The IMF hates the US as most international organizations do. Is this just another attempt by them to try and give the US a black eye?
February 11, 2011 at 4:14 pm
This is not about Stansberry.
February 11, 2011 at 5:11 pm
I think you're missing 3 zeroes…
February 11, 2011 at 5:47 pm
Good post specially with the Drudge report. Hopefully, the House knows about the risk and make the dollar stable enough to keep its place in the global exchange. Obama and his Democrats should just visit Pelosi's state and walk off the Golden Gate while the waters are freezing for what they've done.
February 11, 2011 at 5:51 pm
February 11, 2011 at 6:06 pm
There has been talk of replacing the $ as reserve currency for a while now, and not just from Stansberry.
February 11, 2011 at 8:18 pm
Now might be a good time to invest in a BRIC basket currency product as a hedge against the dollar's decline… As unpatriotic as it seems to invest AGAINST the dollar, it just makes good sense right now.
February 11, 2011 at 9:03 pm
I've heard that argument too. However, there are a number of reasons the USD is still comparably better than any implementable substitute. The USA's political stability, and it's stable legal system as well. This is by no means an excuse to ignore the runaway spending in Washington.
February 11, 2011 at 9:31 pm
I'm fairly certain that the Chinese yuan would be considered a more stable currency than the dollar right now. I sure don't want the Chinese to have the kind of international influence we've had for the last 50 years. Maybe we've made diplomatic mistakes, but…
February 11, 2011 at 9:59 pm
However, I've heard that the China has such a stockpile of currencies that they can manipulate that market in any way they please. Turning the dollar into play money is not in their best interest – at the moment.
February 11, 2011 at 11:31 pm
Unfortunately, concepts like inflation, reserve currency, etc. are well over the head of many politicians. And even if they do understand them, they do not care and will just keep ladling out other people's money to people who back them up. They know that no matter what they do they will always have food to eat and a nice place to live.
February 13, 2011 at 6:40 pm
February 14, 2011 at 4:45 am
We need to follow the example of our last Republican President, George Bush and exercise the same fiscal responsibility as he did and his party calls for. That is the only way to stop running up the debt.
February 14, 2011 at 1:24 pm
A few points for the sober:
1) The dollar is falling because of quantitative easing, which is a fancy term for the Fed's decision to "digitize" money to monetize the debt.
2) Because the dollar is falling, commodity prices are rising, not just here but, because the dollar is still the world's reserve currency, all over the world.
3) Because commodity prices are rising all over the world, weak governments all over the world are at risk of toppling.
4) Political instability, particularly in the Middle East, leads to economic instability, due to more pressure on commodities, particularly oil.
5) Once the IMF and other major banking interests drop the dollar as the reserve currency, there will be nothing to slow the rising cost of commodities in the U.S.
6) The U.S. Government will no longer be able to hide underlying inflation. This will induce unions, especially public service unions, to go on strike.
7) This will produce political instability in the U.S., and this will induce our creditor nations and major financial interests to demand concrete securities to back up our outstanding borrowing. In ordinary jargon, they will "call the loans."
8) This will cause our debt service on the existing debt of 14 trillion dollars to "necessarily skyrocket."
9) We will be unable to respond to all of these demands, and we will go into default. This will cause worldwide trade to collapse.
10) There is no court in the world that can handle this default.
11) There is likely to be worldwide revolution in response to the collapse of worldwide trade.
12) In the face of a worldwide trade collapse, the only thing that can save our economy is our domestic access to natural resources, especially oil, coal and natural gas.
13) Certain aspects of our high-tech manufacturing are highly dependent on elements called rare earth elements. China has quietly been cornering the market on a number of these commodities in what has been, for some time, a critical commodities chess game.
14) The only commodity we still have an edge on is food, but even here our current farming techniques are highly dependent on oil derivatives for fertilizing.
15) If our government survives, and I'm not just talking about the current Administration here, our political and economic vulnerability may lead us into a very dark valley, what Psalm 23 calls the Valley of the Shadow of Death.
It sounds like you folks on the CMR are starting to wake up to these possibilities. Good for you. Maybe you'll start preparing yourselves in the front where it counts the most, spiritually and morally.
February 14, 2011 at 7:18 pm
I've heard this commercial on the radio more times than I care to count. I pretty much lumped it in with all the other questionable products (e.g. IncomeAtHome.com, which turns out to be Herbalife — far from the economic panacea it is being sold as) and services that are hawked over the air and have ignored it as a result. Commenter #1 pretty much reinforced my opinion that it's just another huckster fear mongering to make a buck.