Opinion: Is It Twilight in America?

The current government policy of free money combined with encouraging Americans, who largely have no savings and spend more than they earn already, to borrow and spend even more seems too bizarre not to be intentional.

The Fed's real objective here is to promote a combination of fear mongering about deflation to justify keeping interest rates at zero, while at the same time promoting as much inflation as possible in an attempt to orchestrate a massive stealth devaluation of the U.S. dollar and short-changing of all foreign investors in U.S. assets.

It is a con game of epic proportions, and it could work if foreign investors are dumb enough to allow themselves to get pennies on the dollar for their dollar denominated investments. However, if it doesn't work and foreign investors wise up to this game, the U.S. will face an economic Armageddon that will make the past year look mild.

Why would that happen? The U.S. economy needs to import several billion dollars a day from abroad just to keep the light on. If foreigners turn off that spigot of cash, even if they don't dump their existing U.S. assets, our economy will collapse. An even more extreme possibility is that there is an international revolt from the dollar as the world's reserve currency.

If that happens, we could no longer just print as many dollars as we want with minimal consequences. We could ultimately have to default on our debt like Argentina, Russia, or Ecuador. I do not predict that happening because the U.S. is too big for the world to allow it to default, but my point is that we are entering a world that will no longer allow us to make believe that printing dollars is free. There will be a cost to all of this money printing, and that cost is going to increase.