When I talk about "The End of America,"
I don't mean the end of our political union (although I won't rule that
out). I'm talking about the end of the U.S. dollar as the world's
So how will it unfold? That's what people keep asking me.
My answer is: The collapse of the global fiat money system is already underway.
Gold has gone up for 10 straight years. Gold is the counterbalance
to fiat (paper) money. For 10 years in a row, investors around the world
have been favoring gold. This trend is going to continue, and it will
not stop until serious actions are taken to put a floor under the value
of the world's major paper currencies: the euro, dollar, and yen. And
that can't happen because the governments backing these three currencies
are all bankrupt. The euro will die first. Just look at the numbers...
Greece, Ireland, Spain, Portugal, and Italy have all made the same
mistake. They responded to the collapse of real estate prices and debts
by guaranteeing the private obligations of their banks with their
country's treasury. (America is doing the same, by the way.) The problem
is, the debts are vastly larger than the governments can afford to
repay... far larger.
So for example, when Anglo Irish Bank failed, it announced it
required $35 billion. That's equal to 25% of Ireland's GDP. And that's
only one of Ireland's failed banks. Ireland will never be able to afford
As a result, Germany, France, and the other euro nations have put
together a bailout plan. All of the European treasuries will act to save
any member state.
Total debts owed to foreign investors in the so-called "PIIGS"
countries are $2.6 trillion. The bailout package that's been assembled
totals $1 trillion. That sounds pretty good... at first.
But Italy and Spain have pledged $130 billion to the bailout. Where
will they get that money? Greece has pledged $12 billion. Ireland, $7
billion. Portugal, $11 billion. Only about half this money will ever be
raised and almost all that can be raised will come from France and
Germany. Sooner or later, the taxpayers in those countries will say
"enough" and the whole thing will unravel.
It will happen suddenly. And very, very soon.
Even if you pretend Europe can raise that size of a bailout fund,
that figure isn't nearly large enough to bail out either Spain or Italy.
And both are likely to suffer a default if either Greece or Ireland
defaults. That's why interest rates in Ireland and Greece are back to
crisis levels, despite the bailout promise. That's why the euro
continues to fall. And that's why shorting the euro is one of 2011's
The collapse of the euro will cause all kinds of big problems this
year and almost surely lead to a huge correction in commodities and a
rise in the dollar. Does that mean the U.S. dollar's problems are just a
mirage? Nope. Sooner or later, the U.S. will face a stark choice...
If we let the euro fail, there will be terrible short-term
consequences. So the Fed will crank up the presses yet again.
Quantitative easing 3 will be another $1 trillion effort, this time
focused on buying European sovereign debt. The Fed must become the
lender of last resort not only for the U.S., but for the world.
That's the last step before its eventual collapse. After that point, people will no longer flee to Treasurys when a crisis erupts. They will flee to gold.
P.S. One final reminder... We're not "headed" for a currency crisis.
We're in one right now. It's very important you know the implications of
this crisis and how to ensure your family's financial security. You can
learn how by watching this video.
When people flee to gold as Porter predicts, the price will soar. It's
already gained for 10 consecutive years... which means "slowly but
surely, gold is making its way back into the monetary system of the
world," Chris Weber says. This will be the story of the next decade.
Read more here: