2010-08-05

Physical gold insures against the greatest risk

Mallory Factor writes about collapse from the perspective of time, that the Internet has accelerated the speed at which events take place.

Collapse In Internet Time
So what of America? What could happen here? In normal times our nation's economy adapts to change and weathers small and large crises all the time. But our country has been weakened by massive debt, unbridled government spending and excessive burdens on our private sector, and there will come a point at which stressful events will be too much for our economy to bear. If our economy reaches this tipping point, we will not bounce back from crisis.

The immediate cause of our demise will be a single event--one of our creditor nations dumping U.S. dollars on the world market, the oil nations switching away from dollar-based contracts, a political crisis, another natural disaster, even a large trading error that inadvertently causes dislocation in our markets. But if the tipping point is reached and the downward spiral begins, our economic collapse will be over before we can take steps to address our weaknesses.
A major currency collapse in the United States will be over before it begins, which is to say that it will happen so quickly that there will be no time to act. With the Internet, information spreads instantly and to everyone. Add to that the fact that almost everyone in the world holds dollars, holds a currency backed by dollars or a currency backed by a central bank that holds dollars, trades with the United States, or has a financial system that borrows dollars. A major crisis in the U.S. dollar would lead to torschlusspanik.

The world can watch Thailand implode, it can watch the euro struggle, just as you can watch the Russian wildfires on TV and not feel a need to get a bucket of water. But in a dollar crisis, the world will be in flames.

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