Ron Holland: The Fiat Dollar & Debt Democracy Experiments Have Failed

by: Ron Holland

Washington claims the federal debt limit extension and the threat of default is postponed. This is just more political theatre as the Treasury debt downgrade will happen and eventually a bankrupt America will attempt to inflate the debt away and default. It is the same across the Atlantic where the sovereign debt crisis still stalks the politicians in the EU.

The political and economic reality of the sordid situation cannot be covered up by the establishment news hacks or by more lies or the blame game by either party. The Washington experiment of borrowing trillions to buy elections today to be paid for by future generations has failed in the US and across Europe.

America’s Ability To Service Our Sovereign Debt Is Ending

The real dollar and debt crisis is being obscured here in the US by the political theatre in Washington. Of course the debt limit increase was passed yesterday by a vote of 269-161 and now we can look forward to the first of many downgrades and any purported balanced budget amendment will not be worth the paper it is printed on.

All the false conventional media propaganda and Congressional actions were designed only to help the politicians and institutions responsible for the coming debt debacle avoid the blame. They are now attempting to transfer their responsibility to the only innocent Washington politicians, the Tea Party caucus. They will succeed and at the same time build the case for dramatic future revenue (tax increases).

The Dollar Death Throes Are Hidden From Most Americans

The fiat dollar is collapsing and as a writer and editor paid monthly in Swiss francs, looking at the last year of exchange rates will show the real situation not apparent to Americans living inside the Washington dollar iron curtain.

About 12 months ago, a thousand Swiss francs equaled about USD$870.00. Today, the same CHF 1,000 equals USD$1,270.00. This means the dollar has fallen nearly 46% compared to the rising value of the Swiss franc and conversely my monthly retainer has increased almost 50 percent in dollars per thousand of CHF. Unless you are being paid in dollars and reside outside the US or are paid in a foreign currency and live in America, the bloodbath in the dollar is not apparent in the near term – but it is real and ongoing.

Yes, to my knowledge, the Swiss franc is the best example of the performance of a major currency versus the United States dollar but many other currencies have done very well when compared to the dying dollar as well. Going back to 2001, CHF 1,000 equaled USD$550.00 so here you can see the short and long-term trend of the Swiss franc versus the dollar.

Debt Democracy Has Also Failed!

Today, on the democracy front, Greece, the historic birthplace of democracy around 508 BC and America – the witch’s caldron which spawned the failed debt-financed regulatory democracy experiment – are now competing to see whether it’ll be Athens’ or Washington’s politicians who will be more despised. I believe the US will win the race to the bottom only because Greek politicians have only subjected Greece and several wealthy EU countries like Germany to their wealth thievery, while the failed American example of democracy financed by sovereign debt is bankrupting the US and all of EU Europe.

My Bet & Ten Year Dollar Forecast

The goal of Washington and the FED is to create high inflation and eventually default during a future foreign policy or financial crisis so the blame for the dollar’s demise and debt problems can be transferred elsewhere. Although I doubt they can pull off this PONZI scheme, the only real solutions to the American debt crisis are either repudiation, which would benefit the people, or hyperinflation designed to benefit the bankers and political class.

Thanks to the fake debt deal, in the meantime the government will pass legislation and end deductions in order to increase government revenue. Americans will certainly lose beneficial capital gains treatment and any tax benefits on home profits. The coming hyperinflation will likely cause real estate values in depreciating dollars to go up. We could see housing prices rebound and maybe double back to 2007 pre-bubble levels, which will be touted by the political establishment as good economic news at last. The problem will be the inflated dollars will have lost substantial purchasing power.

You’ll be taxed at high rates on the false inflationary gains of your home, as the accompanying salary increases – due to inflation – will force you into the highest income tax levels with no deductions. The average American will finally realize how badly they will have been scammed when they decide to sell their real estate and – after paying taxes with inflated dollars – decide to purchase the least expensive new Kia or Corolla and the import car is priced at $120,000. This is an example of how countries subjected to hyperinflation are eventually priced out of buying most foreign imports from cars, electronics and beer to name just a few important products of interest to me.

The Fiat Dollar Problem Will Eventually Be Solved By Currency Competition

The profit opportunities for smart international investors from a dollar collapse will likely be enormous due to a paradigm shift in political, economic and monetary theory away from sovereign debt-financed democracy and fiat currency. The monetary elites will attempt to create a fake gold and commodity resource standard to back formerly fiat currencies in order to build “currency confidence” in the US and Europe.

Initially, this may well translate into gold and resource backed currencies and, after the fake elite money standard fails, maybe to the Austrian economc ideal of public and private currency competition. Gold and silver, as well as mining and natural resource equities in certain mineral and oil rich countries, will benefit from the fake gold and resource standard as well as the future ultimate solution of currency competition.

I will have more on this in a future report and in a new editorial on “The Failure of Greece.” We live in an interesting time of transition from debt-democracy and fiat-currency. Take action to avoid the downside in dollars and benefit from rising gold and natural resource prices.

$50.00 Imported Beer?

In the meantime, I hope I’m wrong regarding my expectations for the dollar and debt democracy. But if I’m right, sometime over the next ten years, I’ll buy the first 10 of you who remind me of this editorial and my dollar forecast the foreign beer of your choice at my expense. After all, what is $50 per beer among friends?

Reposted with permission from