THE CURRENCY CRISIS BEGINS

Here in the Berkshires we're at least partially shielded from the financial desperation that people feel in other parts of the country. For example, Walmart's CEO just confirmed that
crowds of individuals, no longer employed and existing (as opposed to living) week to week, overwhelm Walmart stores throughout the country as midnight approaches in order to buy what they absolutely must have i.e. groceries, baby formula etc. The magic hour of midnight is when their "assistance cards" turn over and allow them to purchase the necessities of life for another week. The lines at Walmart's check out counters are the "bread lines" of what can only be called the Second Great Depression.

Suddenly, the endgame is becoming more transparent. With countries purposely weakening their currencies and threatening (legislation pending) to institute import duties, the always inevitable currency crisis appears to be underway. By attempting to gain export advantage while being able to repay their debts with cheaper currencies, the race to the bottom in fiat money is accelerating.

Just the hint that the Federal Reserve may shortly begin another round of quantitative easing (which is spinmanship for money printing), has sent wheat, corn, soybeans, coffee, sugar and cotton prices through the roof in the last few weeks. Soon those in the 2010 bread lines, along with the rest of us, will be paying a lot more for food and clothing while wages, if you're lucky enough to have any, remain flat. Can the cost of energy be far behind?

As the ongoing debasement of the U.S. dollar by our government and the Federal Reserve, a private consortium of bankers, gains speed, Americans, always the last to figure these things out, will finally notice that their dollars buy less and less. They will lose confidence in their currency. When that happens, the game will be over. Social unrest are polite words for what may follow.

This is serious stuff, folks. Look up from your reality shows and video games. Instead, focus on the barometer of economic chaos. Gold tells you all you have to know. The rest is up to you.

September 26, 2010