US Postal Service Confirms Dollar To Be Replaced by New Global Currency

Back in May of 2009, I mentioned that a new global currency was on its way.

Since that time, there has been rumblings by many governments to replace the US Federal Reserve Note ("the dollar") with some other form of global currency to establish a new monetary system for financial settlements.

My prediction remains that "the dollar" will be replaced by an IMF created fiat currency known as Special Drawing Rights or SDRs.

It may strike you as unusual that the United States Postal Service now accepts SDRs as legal tender for transactions.  Click here.

This is significant since the last time the United States Postal Service confirmed the existence of something fictitious was in the movie "Miracle on 34th Street".   Per Wikipedia:   in the 1947 film Miracle on 34th Street, the identity of Kris Kringle (played by Edmund Gwenn) as the one and only "Santa Claus" was validated by a state court, based on the delivery of 21 bags of mail (famously carried into the courtroom) to the character in question. The contention was that it would have been illegal for the United States Post Office to deliver mail that was addressed to "Santa Claus" to the character "Kris Kringle" unless he was, in fact, the one and only Santa Claus. Judge Henry X. Harper (played by Gene Lockhart) ruled that since the US Government had demonstrated through the delivery of the bags of mail that Kris Kringle was Santa Claus, the State of New York did not have the authority to overrule that decision.

Thus the USPS proved the existence of Santa Claus.  AND.... has now proved the existence of Special Drawing Rights as legal tender for US Postal transaction making it a valid, legal substitute for the US Dollar.

Getting It Down Pat

The Social Security System of the United States is at an inflection point where money being paid out is starting to exceed money being paid in.  SS is one of the harshest taxes in the US because it takes 6.2% of everyone’s paycheck and requires their employer to add an additional 6.2% matching contribution.  If you earn low wages, 6% of a small number is significant and if you are an employer, that means your employees are 6% more expensive. 

A Real Story:  Pat, born in 1948, started working in 1970 earning $5,784 per year.  A good median income at the time and, being rewarded with cost of living wage increases each year, Pat retired in 2009 with a final salary of $44,144 per year – still about median income.  Pat paid $53,234 into Social Security and is entitled to government retirement benefits of $18,514/year.   Accounting for Pat’s employer contributions which matched Pat’s SS Taxes, Pat will consume all $106,468 (her contribution + employer match) sometime during year 6 of retirement (age 71); after which Pat starts taking “other people’s” money.

NOTE: Data to support the above calculations can be found here: http://www.ssa.gov/OACT/ProgData/retirebenefit2.html

Here is what is going to happen:

Today- We know that politicians didn’t save Pat’s contributions but rather spent them replacing Pat’s government “nest egg” with an IOU.  As more and more “Pat’s” from the baby boom generation retire, the government needs to borrow more money to pay the benefits.  The current plan is for the US Federal Reserve to buy US Government debt to maintain the financial stability of the economic system.  Read that again- The Fed is buying US Treasuries with money it prints so that the US Government can give Pat $18,514/year.

Long term- (1) Ration healthcare so Pat doesn’t live too long and (2) make all illegal immigrants citizens so we can apply the 6.2% tax to their meager wages.

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In a parallel universe:  Using the same basic data, Pat’s SS Taxes and the matching employer contribution are placed in a government trust fund that earned 3% return on average.  Pat now has $291,603 and, at the same withdrawal rate, this money would last almost 16 years until Pat was 81. 

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If you like Pat's story don't forget to read about Elieen, Peg, Matt and Bob (click).

Red Money

This is the stuff of conspiracy theorists but if you told me in 2008 that the US government was (a) going to take control of the auto industry, (b) financially wipe out all stockholders and bond holders of the then private US auto companies and then (c) give the remaining value to the labor unions-- I would have thought you were a conspiracy theorist because of the US Constitutional protections against "unreasonable search and seizure".

Now for more...  One of the provisions of the new United States Healthcare laws is that starting January 1, 2012; all purchases of precious metal coins and bullion over $600 must be reported to the Internal Revenue Service. I am sure you can immediately see the direct relation of precious metals trading with a national healthcare program. This was buried in the 2,000 page plus piece of legislation that no one had the time to read before they voted it into law.

And more...  In the financial regulation reform bill just passed, another law was added that allows certain bank holding companies to freeze the money market funds (nothing in; nothing out) if the banks believe that sudden, unexpected money flows put the institution at risk. Risk to be defined by the banks themselves or the newly created financial regulation czar. Click here to recall my musing about US Czars.

Finally... The last leg of this positioning move is still open for public comment. But basically the plan is to confiscate the $4T in privately held pensions, pool it, and pay back to all retirees (those with and those without pensions) a fair monthly pension based on what some politician thinks is fair.

This is all positioning for Red Money.

At some point in the future, US currency will be changed from green to red.  You will have some period of time (say 3 months) to convert all your green currency to red currency.  This has two purposes:

(1) An estimated 1/2 trillion green dollars are suspected of being trapped outside the US, held by criminal elements both in the US and abroad as well as by ordinary people just keeping cash "off the books".  If you don't want to expose yourself by making a cash transaction greater than $7,500 in a bank and alert the Internal Revenue Service you are going to spend the money on something.  This is automatic 500B of economic stimulation forcing the world to buy US based goods and services.

(2) When only red money is left, the US Government will devalue it by about 50% thus wiping out half of the country's debt with the stroke of a pen.   In US history, devaluation has been done already at least 2 times on a very large scale, once in the 20th century alone by president F. D. Roosevelt.

Stealth Oil

The old joke goes like this: The CEO of a defense contractor takes the US President to a military air base and says, "Mr. President, parked here on the tarmac is the new Stealth Bomber- price tag a mere $2B each".  POTUS replies, "but sir, I don't see any airplane!".  "Of course not, Mr. President that's because our stealth technology makes them very difficult to detect".  The leader of the free world replies, "That's fantastic!  I'll take 4 dozen."

2 WHOI scientists review recent US Gov't
grant to search for missing Gulf Of Mexico oil.

Fast forward to 2010, where the Associated Press reports that-- Major study charts long-lasting oil plume in Gulf.


Excepts and commentary (emphasis mine):

FOLKS THESE ARE QUOTES!  YOU JUST CAN'T MAKE THIS STUFF UP!






"A 22-mile-long invisible mist of oil is meandering far below the surface of the Gulf of Mexico, where it will probably loiter for months or more, scientists reported Thursday in the first conclusive evidence of an underwater plume from the BP spill."   "The most worrisome part is the slow pace at which the oil is breaking down in the cold, 40-degree water, making it a long-lasting but unseen threat to vulnerable marine life, experts said."  "Earlier this month, top federal officials declared the oil in the spill was mostly "gone," and it is gone in the sense you can't see it. "
Comment: Sounds like the Stealth Bomber story to me.

"Monty Graham, a scientist at the Dauphin Island Sea Lab in Alabama who was not involved in the study, said: "We absolutely should be concerned that this material is drifting around for who knows how long. They say months in the (research) paper, but more likely we'll be able to track this stuff for years." 
Comment: Poor Monty, he isn't shown in the above picture so didn't get in on the first government grant.  However, if he can glum on to the fact this is a persistent problem maybe he can get in on round 2 of the money.

"The scientists used complex instruments...to detect the chemical signature of the oil that spewed from the BP well after it ruptured April 20. The equipment was carried into the deep by submersible devices."   Comment: They used rare equipment that nobody can understand and conducted the experiments where no one could confirm they were doing anything.

* * * I THINK WE SHOULD GIVE THESE GUYS MORE MONEY * * *

Comment on this model portfolio

First the necessary disclaimer: The following is provided for educational and entertainment purposes only. The information that follows is neither an offer nor a solicitation to buy or sell securities and/or investment vehicles of any kind. In all cases, individuals are encouraged to do their own research and seek investment and tax advice from qualified, certified professionals properly licensed in the country or locality in which they reside.

Assume equal amounts invested--

Group 1: Playing the yield game:

Pimco High Income Fund

Strategic Global Income Fund

iShares S&P U.S. Preferred Stock Index

MFS Special Value Trust

Group 2: Hedge with the general market:

Standard & Poor's Depositary Receipts

Group 3: Buy Cheap Protection Against Inflation:

Health Care REIT Inc.

Fidelity Inflation-Protected Bond (FINPX)

Fidelity Real Estate Income (FRIFX)

Fidelity Strategic Real Return (FSRRX)

Group 4: Insurance for when the SHTF:

SPDR Gold Shares (GLD)



What do you think?

Too Few Too Big To Fail

In the United States, a bank failure is the closing of a bank by a federal or state banking regulatory agency. The Federal Deposit Insurance Corporation (FDIC) seizes a bank's assets when its capital levels are too low, or it cannot meet obligations the next day.

The global financial crisis circa 2008 has caused 176 banks to fail as of this writing.

And now more failures are to come-- due to the new US Financial Regulation legislation recently signed into law with its "Pravda-esque" promise of protecting consumers and regulating wall street.

Interesting point #1: Three large financial institutions- the Federal Reserve Bank (a private bank) and Freddie Mac and Fannie Mae (quasi-government institutions) are all exempted from the legislation.

Interesting point #2: The stated intent of the legislation was to end taxpayer bailouts of financial institutions deemed too large too fail (TBTF). When in fact, what it has done is relieve politicians the nasty task of openly debating the next bailout in front of the public by establishing a taxpayer funded trust fund to bailout TBTF institutions. Get it? They didn't eliminate the bailouts only the public process was eliminated; the bailouts continue in secret with a private slush fund.

Here is what to watch for in the news:

Sooner or later, the US FED and FANNIE and FREDDIE who all have been buying up collapsing mortgages and mortgage backed securities, will now start forcing the banks that originally cast these bad loans to start covering the losses (i.e. buying them back). When this starts here is what happens:

1. Banks begin consuming their "loan loss reserves" and become unprofitable and eventually insolvent. Thank god the FDIC has hired hundreds of new auditors to handle a new wave of bank closures.
2. Banks know this is coming which is why they aren't lending now. They will lend less when the full power of the US government is unleashed upon them.
3. The last banks standing are the TBTF banks operating with a tax payer funded safety net and everyone who wants money will have to go to them. Because they are now government backed they are quasi-government agencies.

This is how to nationalize the banking system of a country without having to be very public about what you are doing.