Why We Shouldn't Be Waiting in Line to Spend
Things are getting a bit frazzled over at the EU, as people are starting to wonder about the potential for the euro, and the dollar, to collapse.
Let's hope not, but it is getting hard to deny that we are heading for a major currency crisis, and if the U.S. dollar and/or the euro collapse, the world will certainly never be the same afterwards.
European Financial Stability Fund chief Klaus Regling says that there is "zero" chance that the euro will collapse.... "There is zero danger. It's inconceivable that the euro would collapse."
Other European leaders are not so sure about that. EU President Herman Van Rompuy recently warned that if some of the weaker countries in Europe are forced to abandon the euro it will likely cause a total meltdown of the European Union....
"We're in a survival crisis. We all have to work together in order to survive with the euro zone, because if we don't survive with the euro zone we will not survive with the European Union."
German Chancellor Angela Merkel is also warning that a failure of the euro could bring down the entire European Union.... "If the euro fails, then Europe fails." But is this likely to happen any time soon? No, probably not, but in 2010 top European officials are actually acknowledging the possibility, and that shows just how serious things have gotten.
Things should be frazzled here, as well.
In case you missed it, China and Russia made a very big announcement the other day.
They told the world that instead of using the U.S. dollar to trade with each other, they will now be using their own national currencies. Most Americans don't realize it, but that is a very, very big deal.
The fact that the U.S. dollar has been the primary reserve currency of the world for decades has given the United States a tremendous amount of economic power.
Consider what Harvard economist Niall Ferguson said a year ago about the U.S. economic path.
What will happen first is that we’ll default on the commitments made under the Medicare and Social Security systems. That default, the domestic default on our, as it were, domestic creditors, is an almost certain outcome. The only question is which president takes it? Which president grasps that and admits that we cannot possibly fulfill those commitments?