WC&P: "Why The US Dollar is Collapsing and What Happens When It Does"

The dollar's strength is supposed to derive from faith that the U.S. government will remain fiscally sound. There is little evidence that this will be the case. All of the traditional factors that determine a currency's value, i.e. trade balances, interest rates, government debt levels, economic growth, etc. should be putting downward pressure on the dollar. The U.S. government has done nothing to solve the nation's long-term debt crisis. Even the Congressional Budget Office admits that the Federal deficit will increase by an average of $35 billion annually until the end of the decade. By 2025, Trillion dollar plus deficits become entrenched (and those projections are based on economic growth assumptions that currently have proven to be far too optimistic.).

Default (The Ponzi Fate) on Government Debt is inevitable (See Zimbabwe) because it (It has passed “The point of no return”.  NOW it has to (1) borrow (print money and sell treasury bonds; Gov’t IOU) to pay the interest (See Japan or PAYDAY LOANS IN THE GHETTO) on the national debt.  (2) It Can’t reduce spending, (3) It can’t raise taxes and (4) It can’t raise GDP (which means lower tax revenues).

US currently spends more on its interest obligation than it does on its military.