This is a good article regarding the Crisis that America faces and its falling dollar.

It’s been coming for a long time and I’ve often said I feel sorry for the average US tax payer as they have been getting robbed for some time and only now are starting to realise it. I first wrote about this in my book over 5 years ago.
In the past though the Credit Crisis, which really is a US created crisis that infected the world, has caused such negative sentiment it sent economies into recession often just by the fear created by the Credit Crisis.

Australia’s recession was largely sentiment based driven by US problems, when fundamentally we had no reason to go into a recession and thus why when fear subsided we realised it wasn’t that bad in Australia and let’s get over the idea of a recession.

And it’s for this reason Australia needs to divorce itself from the link that what happens in the US economy and US stock market should impact us.

We no longer rely on them to the extent that we did.

The US stock market should no longer guide or lead what should happen to the ASX.

Why?

Australia is a rich country and the shift between Western economic power to Eastern economic power will perhaps benefit no other country more so than Australia.

We are the perfect go-between country. A rich, developed Western Nation.

Not only were we closely tied to the US, which since World War 2 has been a significant economic benefit to us, until the Credit Crisis, we are linked closely to China’s economic boom. As Eastern countries now will take over from the US and Western economies that have dominated for decades, we are perfectly positioned to prosper perhaps like no other Western country.

Australia actually has the opportunity to become a significant economic player and you will see many more people wanting to migrate to Australia.

And I’m not talking just migration from Eastern countries, but a lot more from Western economies such as the US and the UK.

Australia is set to boom from the rise of China and Asia, yet we are already a highly developed Western economy, which unlike the rest of the West will avoid a decline but be carried on to greater prosperity and wealth than ever imagined.

We have always thought of ourselves as a lucky country, but I’m not sure we’ve realised how lucky.

So as investors we need to understand that the problems of the US are no longer our problems.
Even though they still have some impact, it’s more based on past habits of thinking we have to follow their economy and stock markets as a guide to where we are heading, when we should be following China’s economy and stock markets more closely.

This suggests despite the pain the US has caused upon the world economically with their self-generated Credit Crisis, the reality is it should become a US problem to deal with and not the rest of the world’s economic problem.

And Australia, thanks to the rise of China, no longer has to worry too much about the US economic demise as it only has to affect us if collectively we allow it.

It will also mean there will be cheap US assets for sale that will only get cheaper with our rising dollar and their crashing dollar.

Shocking expose, you’re being robbed !

Author : Larry Edelson

There’s no way to sugar-coat this — so please forgive me for being blunt:

You are being robbed.

Since March of 2009, the value of every dollar you have saved, invested or set aside for retirement has plunged 15%. A greenback that was worth $1.00 just seven months ago is now worth only 85 cents.

Back in the late 1970s, even smaller, slower declines in the dollar came with a massive surge of inflation, gutting your buying power.

Now, it’s happening again. The falling dollar is already making energy … food … clothing … and most of the products you buy more expensive:

Just in the last seven months, gold has surged 14%, crude oil is up 96%.

Raw materials needed to manufacture most products you buy are also rocketing higher. Copper is up 88%. Aluminum is up 38%. Nickel and Cadmium for the batteries in your cell phone and computer are up 93% and 18% respectively.

Cotton is up 45% and wool is up 24%, which can only drive the cost you pay for clothing higher. Food imported from overseas is already soaring: Coffee and tea are up 26% and 42%. Oranges are up 41%. Sugar is up 71%. Olive oil is up 14%.

And as the dollar continues to dive against foreign currencies, you can expect all your other expenses to rise as well.

Hard to believe when everyone is talking about deflation? Well think again: In the entire history of the U.S., there has never been a period when Washington spent as much money as it is doing now without major inflation rearing its ugly head.

And what if this disturbing trend continues? What if the dollar begins plunging even faster? How will you make ends meet?

In this report, I’ll show you why the dramatic plunge in the dollar you’ve seen so far is only the beginning … why the U.S. government now has no choice but debase the greenback … why this war on the dollar is a defacto default on its debts …

And most importantly, I’ll give you the steps you need to take now to protect yourself and profit.

The plain truth is …

Washington now has no choice

but to DEFAULT on its massive debts

by crushing the value of your dollars

Here are four reasons why:

REASON #1 — The federal deficit is now EIGHT TIMES LARGER than it was in 2007.

Three years ago in September, the federal deficit for fiscal year 2007 came in at just $161 billion.

By September of 2008, it had more than doubled to $407 billion.

And just a few days ago, Washington revealed that the deficit had exploded to $1,400 billion ($1.4 trillion)!

That’s an outrage: A 770% increase in just three, short years!

REASON #2 — The “official” national debt has more than DOUBLED since 2000: It took more than two centuries — 224 years from 1776 to the year 2000 — for America’s national debt to hit $5.7 trillion.

But it has only taken Washington only nine years to pile up another $6.1 trillion in debt: Today, the national debt stands at $11.8 trillion.

REASON #3 — Deficits as far as the eye can see will likely double the national debt again by 2019:

According to the White House’s own Office of Management and Budget (OMB), the deficits ahead will add $9 trillion in debt over the next ten years, bringing the national debt to more than $21 trillion.

But even the OMB’s report underestimates the volume of red ink we’re likely to see. It assumes Washington will avoid introducing new social programs, will fight no new wars or pass any new stimulus packages over the next decade. And it assumes no new economic or market disasters that could open new, deeper sinkholes in the nation’s finances.

Meanwhile, rather than cut back on spending, the Obama administration is already planning to spend even more! They’re sending supplemental checks to 50 million seniors. They want to extend unemployment benefits. They want to renew tax credits for new homeowners. And they want to pass the biggest health care package in history.

U.S. Congressional Budget Office Admits That An

Even Much More Dramatic Debt Crisis Is Very Possible

Even the nonpartisan Congressional Budget Office (CBO) says that the $9 trillion in expected new budget deficits could be a gross understatement and that we could be on the brink of a massive fiscal disaster. In its 2009 report, “The Long-Term Budget Outlook,” the CBO writes

“[Our] model predicts only a gradual change in the economy as federal debt rises. In actuality, the economic effects of rapidly growing debt would probably be much more disorderly as investors’ confidence in the nation’s fiscal solvency began to erode. If foreign investors anticipated an economic crisis, they might significantly reduce their purchases of U.S. securities, causing the exchange value of the dollar to plunge, interest rates to climb, and consumer prices to shoot up …

“The growth of debt would lead to a vicious cycle in which the government had to issue ever-larger amounts of debt in order to pay ever-higher interest charges.”

How high will the national debt really soar between now and 2019? The CBO’s report makes it abundantly clear that the sky’s the limit.

REASON #4 — The TOTAL national debt is nearly NINE TIMES LARGER than Washington claims. When reporting the national debt, Washington conveniently leaves out the $104 trillion the government owes to seniors and veterans through Social Security, Medicare, Medicaid and veterans benefits programs.

These unfunded liabilities are no longer merely an obscure ledger entry: This year, the oldest of our 76 million baby boomers turn 63 and are already beginning to collect these benefits.

All told, Washington is now

a staggering $125.8 TRILLION in debt!

DEBASING THE CURRENCY: A Time-Honored Tradition

This is the path politicians have followed time and time again when confronted with unpayable debts:

When Rome began to fall, the denarius plunged to ONE FIFTIETH of its former value before becoming worthless.

When the Byzantine Empire faced overwhelming, unpayable debts, the Bezant was devalued until it was worth zero.

When the British Empire declined, the pound lost 80% of its value.

At the beginning of World War I, it took 4.2 German realmarks to buy one U.S. dollar. By August 1923, it took three trillion realmarks to buy one greenback.

In April of 1933, Franklin Roosevelt effectively devalued the dollar by 75% simply by raising the official price of gold.

And similar currency devaluations have happened more recently in Brazil, Chile, Argentina, Malaysia, Thailand, Russia, Indonesia, Zimbabwe and a host of other countries all over the world.

The simple truth is, the federal government’s debt is gargantuan and unsustainable.

Even if the government miraculously balanced the budget tomorrow … ran surpluses every year from now on … and paid down that debt at the rate of $100 million PER DAY … it would take 3,446 years for Washington to pay off the debts it already owes!

The bottom line …

The U.S. government’s debts are

PATENTLY UNPAYABLE!

Washington has no choice but to crush the value of your money, then pay its bills with cheaper dollars:

Our leaders can NOT simply refuse to pay what they owe to bond-holders, seniors and veterans. If they did, they’d trigger social and economic chaos the likes of which few nations have ever seen.

Nor can they ever hope to make good on their obligations with spending cuts and higher taxes. The political and economic cost would simply be too high.

The ONLY path left is for Washington to effectively DEFAULT on its obligations — by paying them with cheaper dollars!

For Washington to crush the dollar, no new laws need be passed; no new policies need be put in place. In fact …

This intentional destruction

of the U.S. dollar

has already begun.

Fed Chairman Bernanke is already cranking up the printing presses — printing money like there’s no tomorrow — and then using that new, unbacked money to buy not only Treasury bonds … but also $941 billion in mortgage-backed securities!

Bottom Line: The Fed has added more than $1 TRILLION in cash and reserves to the coffers of the nation’s banks, a pace of growth which is FORTY-FIVE times faster than normal.

Even in the most extreme circumstances of recent history, the Fed never pumped in anything close to this much money in such a short period of time:

Before the turn of the millennium, the Fed scrambled to provide liquidity to U.S. banks to ward off a feared Y2K catastrophe, bumping up bank reserves by an unprecedented $73 billion increase in just three months.

At the time, that was considered extreme. But it was only ONE-FOURTEENTH as large as the money printing operation the Fed has just undertaken!

In the days following the terrorist attacks on the World Trade Center and the Pentagon, the Fed rushed to flood the banks with liquid funds, adding $40 billion by 9/19/01. That, too, was considered massive at the time. But was only 1/25th as big as what they’ve just done.

THIS is what has flooded the global markets with unwanted U.S. dollars.

THIS is why the dollar has plunged 15% against other major currencies since March alone.

THIS is why the price we pay for energy, food, clothing and most of the other products we buy has surged.

Mark my words: This great dollar disaster is NOT a flash in the pan; NOT a short-term trend. The plunge in the dollar’s value we’ve seen so far is only a drop in the bucket compared to the devastation we’re likely to see in 2010, 2011 and beyond.

The WORST-case scenario:

Believe it or not, this alarming erosion in the buying power of your money is actually NOT the worst-case scenario for the value of your money. The real danger is a more sudden, more dramatic collapse in the dollar, which would be far more devastating to you. And it looks as though the likelihood of this scenario could be increasing.

According to the U.S. Treasury Department, Washington now owes $7.9 TRILLION to foreign investors and governments.

Those debt instruments and obligations are now worth 15% less than they were just seven, short months ago. And of course, the interest on that debt is now being paid with dollars that are also worth 15% less.

Unsurprisingly, foreign governments, central banks, financial institutions and investors are fed up with this state of affairs and are now planning veritable lenders’ strikes with the potential to slash world demand for dollars — and with it, the dollar’s value.

That’s why …

“The costs of a dollar-dominated system to the world may have exceeded its benefits. The dollar should be replaced by a new global reserve currency. ”

— Zhou Xiaochuan

Governor, China Central Bank

“Replacing the dollar with an artificial currency would solve some of the problems related to the potential of countries running large deficits and would help stability.”

— Dr. Detlef J. Kotte

Head, Macroeconomics &

Development Policy,

United Nations

China — by far the largest holder of U.S. debt — has repeatedly announced that it is diversifying OUT of dollars, preferring currencies that are not evaporating before its very eyes.

Arab states, Russia, even France and Japan are seriously considering the proposal to replace the dollar when pricing oil and settling international energy transactions.

Members of the G-20, the International Monetary Fund and the World Bank have begun calling for the dollar to be replaced as the world’s reserve currency.

The United Nations has just issued a monumental, game-changing report that recommends the establishment of a new “Global Reserve Bank” or a reformed IMF to issue an artificial reserve currency — a “global currency [that] would be backed by a basket of currencies of all the members.”

As these demands reach a critical mass, they could trigger a panic — a stampede out of the dollar.

Nobody will want to be the last to sell. The panic could be massive. It could strike suddenly. And it could drive up your cost of living more rapidly than almost anyone believes possible today.

The choices you make NOW

could make all the difference for you.

Look: Every investor worth his or her salt knows that you should never fight the decision-makers at the U.S. Federal reserve.

They control the U.S. money supply and they heavily influence our interest rates — two of the most powerful controls on the economy and investment markets. They generally get what they want.

And right now, they want — and desperately need — a much cheaper dollar with which to pay Washington’s otherwise unpayable debts.

Of course, you could simply ignore Washington’s great war on the dollar — or worse, try to fight it. But investors who do so are no longer just fighting the Fed. They’re also battling against …

The entire Obama administration …

The U.S. Congress …

The U.S. Treasury …

China’s central bank …

Russia, Japan and France …

The G-20 …

Oil-exporting countries …

The International Monetary Fund …

The World Bank …

And even the United Nations!

All of these powerful players have BOTH ample motives AND plenty of opportunity to crush the value of your money. Not only that, many are openly admitting that’s precisely what they intend to do.

This is the reality. These are the cards you’ve been dealt as an investor.

But it’s also very personal: When your money is devalued, your wealth is diminished. Every dollar you have buys less — everything costs more. Your standard of living is threatened; your quality of life, reduced.

Wage earners and investors who hide their heads in the sand while their own government devalues their money will suffer enormous financial pain. Retirees and anyone approaching retirement who plan to live on fixed incomes could be wiped out.

The only choice you have is whether you’ll ignore this reality — bury your head in the sand and risk massive losses as your buying power plunges and your cost of living soars …

Or whether you’ll take a stand to defend your savings, investments and retirement.

Make no mistake: This is the greatest confiscation of personal wealth — YOUR personal wealth — in history.

When your money is devalued, your wealth is diminished. Every dollar you have buys less — everything costs more. Your standard of living is threatened — your quality of life reduced.

Put simply, THIS IS PERSONAL: In similar circumstances, the British pound plunged 80% after losing its reserve status.

That’s important to understand: When the value of your money plunges 80%, nearly everything you buy — food … energy … and most of life’s other necessities — COSTS YOU FIVE TIMES MORE!

Even if the U.S. dollar fell only HALF that far, everything that’s produced or manufactured with materials from overseas would cost you nearly DOUBLE!

Imagine: Oil and gasoline … food grown overseas … and four-fifths of the products on Wal-Mart’s shelves … selling at TWICE today’s prices!

Make no mistake: Wage earners and investors who hide their heads in the sand while their own government devalues their money will suffer enormous financial pain.

Worse: If you’re retired or approaching retirement and plan to live on a fixed income, hedging against this great dollar disaster is NOT optional — it’s a matter of survival!

The ONLY way to protect yourself is to take action: To hedge against this great dollar disaster with investments that effectively replace what’s being confiscated from you.

URGENT SELF-DEFENSE

The ONLY way to protect yourself is to take action: To hedge against this great dollar disaster with investments that effectively replace what’s being confiscated from you.

For starters, I recommend that every investor hold between 10% to 25% of total capital in gold bullion.

Some guidelines:

Do NOT buy rare gold coins with numismatic value for your core bullion holdings. They carry a hefty premium — a substantial mark-up — over the price of the gold itself.

To minimize the premium you pay, consider buying the largest ingots you can afford.

Typically, I recommend ten-ounce ingots fabricated by majors like Engelhard or Johnson Matthey for two reasons: First, the purity and weight of the gold content is guaranteed and second, because the premiums on larger ingots are typically far less than those on smaller one-ounce coins.

With gold at $1,050 per ounce, these ingots would go for just $10,500 plus the premium your bullion dealer charges you.

If you need to buy your gold in smaller increments, stick with the one-ounce bullion coins offered by major mints in the U.S., Canada, Australia and South Africa. They can be acquired for the current price of gold plus a small dealer mark-up.

Important: Most of these mints offer their bullion coins in proof condition for an additional premium. Insist on the standard “brilliant uncirculated” versions of those coins. They’re cheaper.

Selecting the best bullion dealer is important. Three of my favorites are Monex, Fidelitrade and Dillon Gage. All offer excellent service and prompt shipment. Just one word of warning: The premiums each dealer charges does vary. It’s a good idea to compare prices before you buy.

When deciding where to store your gold, consider using a safe deposit box at your bank or a secure gold storage facility. Most of these are former banks that have been converted into depositories available for public use. DO NOT agree to let the bullion dealer store your gold for you.

Your best defense is a strong OFFENSE:

Natural resource investments that soar

when the dollar dives!

The good news is that there’s an entire class of investments that naturally rise in price when the U.S. dollar declines in value.

Take gold, for instance: Since 2003, the U.S. dollar has lost nearly a third of its value relative to a basket of major world currencies — but gold has more than TRIPLED.

And since March of this year, while the dollar has dropped 14% in value, gold bullion prices have hit new all-time highs over $1,050 per ounce.

Silver has also been on fire — rising 35% since March of this year alone. Plus, in the same time period, steel prices are up 17% … oil is up 58% in price … and copper prices have positively exploded — up 79% in just seven, short months!

When resource prices soar,

resource STOCKS could double

or even triple your money!

Naturally, when resource prices rise, the stock of companies that produce those resources rise as well — and typically, they rise at a much faster pace than the resources themselves.

The fact is, we’ve ALREADY been on fire this year. A full two-thirds of my resource recommendations have been winners. The AVERAGE winner resulted in a healthy 72% gain per trade. And seven of those winners have been doubles or triples — including Fresh Del Monte Produce — UP 104.7% … TEPPCO Partners — UP 195.8% … and Yanzhou Coal — UP 268.8%.

If you grabbed those gains, congratulations! If not, don’t fret. Every indicator I trust tells me you can go for equally large profits as natural resources soar.

In the seven months between March 1st and the end of September of this year, for instance …

Oil prices rose 58% — but …

Targa Resources jumped 116% — more than TWO TIMES more …

Key Energy Services surged 209% — nearly FOUR TIMES more, and …

ATP Oil & Gas soared 373% — more than SIX TIMES more!

Gold prices edged 6% higher — but …

Gold Fields LTD rose 32% — more than FIVE TIMES more …

And Iamgold jumped 61% — more than TEN TIMES more!

Steel prices rose 17% — but …

Steel stocks like Nucor jumped 34% — TWO TIMES more …

Allegheny Technologies surged 69% — FOUR TIMES more …

And AK Steel Holding Corp soared 197% — nearly TWELVE TIMES MORE!

Copper rose 79% — but …

Southern Copper rise 115%, 1.5 times as much …

Nissan Copper LTD jumped 143%, TWICE as much …

Quadra Mining LTD surged 288%, or FOUR times more than the price of copper.

And remember: All of this happened THIS year, while the U.S. dollar declined just 14% in value.

It boggles the mind to consider the kinds of gains that could be possible if we see the kind of dramatic currency devaluation that has slammed the British pound when it lost its status as the world’s reserve currency!

The exploding growth in Asia — and especially in China — makes it the ultimate investment paradise … presenting a tremendous opportunity for savvy investors like us.

Case in point: China’s demand for oil is exploding. And this FREE investment guide gives you the name of a company already positioned to rake in billions of dollars … by meeting the insatiable energy needs of 1.3 billion Chinese!