By Phil Billington / Chronicle contributor
President Obama fiddled away precious time with indecision over the war in Afghanistan, health care and recovery from the worst economic train wreck since the great depression, while traipsing off to Denmark to nail down Chicago as the host city for the 2016 Summer Olympics games.
None of these issues, however, stack up to the most urgent financial dilemma of our times, the threat to the cornerstone of our nation, the threat to the value of the U.S. dollar, which has taken a swan dive in recent months. At this very moment, major oil producers are considering abandoning the dollar as the world’s reserve currency. G-20 countries, Arab Gulf States, Russia, Japan and a U.N. commission all favor ditching the dollar. What does this mean to the U.S. and in particular to American citizens?
Since WWII (Bretton Woods agreement), central banks of the world agreed to make the dollar the world’s reserve currency, viz., the world standard exchange rate for assets (gold, oil, copper, soybeans, sugar, coal and other commodities). This led to America becoming the wealthiest nation on the planet.
In effect, the world has subsidized our high standard of living. Loosing that status means that every dollar you have saved or invested is now in jeopardy. The cost of living, energy, food and clothing, could double or more in the coming months because of the dollar steadily losing its buying power.
Despite the fact that the dollar has lost 36 percent of its value over the last 10 years, 15 percent since Obama took office, have you seen or heard Washington do anything to prevent the dollar’s decline? Other than some occasional sound bites that Washington “believes in a sound dollar,” their actions betray their words.
Washington’s top priority is clearly to let the dollar fall in value, even if it means it will be replaced by a new world reserve currency and no matter the pain imposed on American citizens. Their hidden rationale: It will inflate away mountains of debts in this country by artificially raising asset prices. That’s why you haven’t seen Treasury Secretary Geithner, Fed Chairman Bernanke or even President Obama lift a finger to stem the fall of the dollar.
The Fed has declared war on the dollar by deliberately pursuing a monetary policy and a strategy of dollar debasement in order to ensure we get another round of asset inflation. Fed chairman Bernanke is more afraid of a relapse in the economy than any big outbreak in inflation. He vows to print as much paper money as needed, and leaves the distinct impression that he won't change course until hell freezes over.
President Obama may rightly blame prior administrations for the banking crisis, but his actions alone caused the debt crisis, precipitating a sinking dollar. In nine months, Obama has racked up a debt 3.5 times what it was last year. The national debt is far larger than Washington’s official $11.8 trillion. They conveniently leave out the $104 trillions of unfunded liabilities, e.g., Social Security, Medicare, Medicaid and veteran benefits.
The grand total of the national debt is actually $125.8 trillions, a mountain of debt that can never be paid off in a thousand years. The government will have no option but to default on its obligations. Washington’s solution is to default on the sly – with cheaper dollars. The result is America will become a banana republic.
A growing majority, including a large number of former supporters, realize community organizing did not prepare Obama to lead the most powerful nation on earth. His inexperience is all too conspicuous. Barack Obama is the most narcissistic, egotistical, arrogant person ever to occupy the oval office.
He has openly declared war on capitalism. Candidate Obama promised in speech after speech to wreck the system and restructure America. He vilifies banking, auto industry, private segments of healthcare and now the Chamber of Commerce, the champion of small businesses. Un-presidentially and strategically wrong-headedly, Obama targets parts of the media which disagree with his agenda.
Welcome to Chicago politics.
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Stumptalk is published weekly in the Crossville Chronicle. The opinions expressed in this column are not necessarily those of the Chronicle publisher, editor or staff. Phil Billington serves as coordinator of this column. He may be reached at stumptalk@charter.net.
