The huge trade deficit must be financed either by attracting foreign investment in new productive assets in the United States or by printing IOUs. Investment has only provided about 10 percent of necessary cash, so each year the United States sells currency, bank deposits, Treasury securities, bonds, and the like to foreigners. Those claims on the U.S. economy now total about $6.5 trillion.
That floods world financial markets with U.S. dollars and paper assets that function much like U.S. dollars-what economists call liquidity. And, it evokes an iron law of the universe. If you print too much money, it won’t have any value.
International investors, recognizing the U.S. economy lacks competent helmsmen at Treasury and the Federal Reserve, are fleeing the dollar for the best available substitute–the euro and gold.
When George Bush was inaugurated, the euro was trading at 94 cents and gold cost $266 an ounce. Now they are trading at $1.52 and $985 an ounce. That is a plain vote of no confidence in the BushBernanke economic model.
The collapse of the dollar is no accident. This has been planned for decades as part of the New World Order. After the dollar collapses, the North American Union will be implemented and the dollar will be replaced with the Amero.