Dollar to Fall as World Currency

What you are about to see is controversial, and may be offensive to some audiences. Viewer discretion is advised. Hello. My name is Porter Stansberry. A little over ten years ago I founded Stansberry & Associates Investment Research. It has become one of the largest and most recognized investment research companies in the world, serving hundreds of thousands of subscribers in more than 120 countries. You may know of our firm because of the work we did over the last several years – helping investors avoid the big disasters associated with Wall Street’s collapse.

We warned investors to avoid Fannie and Freddie, Bear Stearns, Lehman Brothers and General Motors and dozens of other companies that have since collapsed. We even helped our subscribers find opportunities to profit from these moves by shorting stocks and buying put options. To my knowledge, no other research firm in the world can match our record of correctly predicting the catastrophe that occurred in 2008. But that’s not why I created this letter. I reference our success and experience with Wall Street’s latest crisis because we believe there is an even bigger crisis lurking – something that will shake the very foundation of America.

And that is why I’ve spent a significant amount of time and money in the past few months preparing this letter. In short, I want to talk about a specific event that will take place in America’s very near future… which could actually bring our country and our way of life to a grinding halt. This looming crisis is related to the financial crisis of 2008… but it is infinitely more dangerous, as I’ll explain in this letter. As this problem comes to a head, I expect there to be riots in the streets… arrests on an unprecedented scale… and martial law, enforced by the U. S. military.

Believe me, I don’t make this prediction lightly and I have no interest in trying to scare you. I’m simply following my research to its logical conclusion. I did the same when I tracked Fannie and Freddie’s accounting. The same with General Motors. And Bear Stearns and the rest. And when I began giving this warning in 2006 no one took me very seriously… not at first. Back then, most mainstream commentators just ignored me. And when I presented my case and exposed the facts at economic conferences, they got angry. They couldn’t refute my research… but they weren’t ready to accept the enormity of its conclusions either.

That’s why, before I go any further, I have to warn you… What I am going to say is controversial. It will offend many people… Democrats, Republicans, and Tea Partiers, alike. In fact, I’ve already received dozens of pieces of hate mail. And… the ideas and solutions I’m going to present might seem somewhat radical to you at first… perhaps even “un-American. ” My guess is that, as you read this letter… you’ll say: “There’s no way this could really happen… not here. ” But just remember: No one believed me three years ago when I said the world’s largest mortgage bankers Fannie Mae and Freddie Mac would soon go bankrupt.

And no one believed me when I said GM would soon be bankrupt as well… or that the same would happen to General Growth Properties (the biggest owner of mall property in America). But again, that’s exactly what happened. And that brings us to today… The same financial problems I’ve been tracking from bank to bank, from company to company for the last five years have now found their way into the U. S. Treasury. I’ll explain how this came to be. What it means is critically important to you and every American… The next phase in this crisis will threaten our very way of life.

The savings of millions will be wiped out. This disaster will change your business and your work. It will dramatically affect your savings accounts, investments, and retirement. It will change everything about your normal way of life: where you vacation… where you send you kids or grandkids to school… how and where you shop… the way you protect your family and home. I’ll explain how I know these events are about to happen. You can decide for yourself if I’m full of hot air. As for me, I’m more certain about this looming crisis than I’ve been about anything else in my life.

I know that debts don’t just disappear. I know that bailouts have big consequences. And, unlike most of the pundits on TV, I know a lot about finance and accounting. Of course, the most important part of this situation is not what is happening… but rather what you can do about it. In other words: Will you be prepared when the proverbial $@*% hits the fan? Don’t worry, I’m not organizing a rally or demonstration. And I’ve turned down every request to run for political office. Instead, I want to show you exactly what I’m doing personally, to protect and even grow my own money, and how you can prepare as well.

You see, I can tell you with near 100% certainty that most Americans will not know what to do when commodity prices – things like milk, bread and gasoline – soar. They won’t know what to do when banks close… and their credit cards stop working. Or when they’re not allowed to buy gold or foreign currencies. Or when food stamps fail… In short, our way of life in America is about to change – I promise you. In this letter I’ll show you exactly what is happening. You can challenge every single one of my facts and you’ll find that I’m right about each allegation I make. And then you can decide for yourself.

Will you act now to protect yourself and your family from the catastrophe that’s brewing right now in Washington? I hope so. And that’s why I wrote this letter. I’m going to walk you through exactly what I am doing personally, and what you can do as well. I can’t promise you’ll emerge from this crisis completely unharmed – but I can just about guarantee you’ll be a lot better off than people who don’t follow these simple steps. But I’m getting ahead of myself just a bit. Let me back up and show you in the simplest terms possible what is going on, why I am so concerned, and what I believe will happen in the next 12 months…

The Greatest Danger America Has Ever Faced? In short, I believe that we as Americans are about to see a major, major collapse in our national monetary system, and our normal way of life. Basically, for many years now, our government has been borrowing so much money (very often using short-term loans), that very soon, we will no longer be able to afford even the interest on these loans. Again… I say these things as an expert in accounting and financial research. You may not think things are THAT BAD in the U. S. economy, but consider this simple fact from the National Inflation Association:

Even if all U. S. citizens were taxed 100% of their income… it would still not be enough to balance the Federal budget! We’d still have to borrow money, just to maintain the status quo. That’s absolutely incredible, isn’t it? Yet I’ve never seen this fact reported anywhere else. Normally I study these kinds of numbers when I’m looking at a business to invest in or to recommend to my readers. But lately I’ve spent most of my time looking into our national balance sheet, because as the banking system collapsed in 2008, all of the bad debts were absorbed by the world’s governments.

For example, when Fannie Mae and Freddie Mac collapsed in the summer of 2008, the U. S. government responded by simply guaranteeing all of their outstanding debt. Since then these companies have recorded hundreds of billions of losses – all of which were passed along to the government. Yes, you can still get mortgages today. And yes, Freddie and Fannie are still in business. But costs associated with these programs are piling up at the U. S. Treasury – and they are enormously expensive. These losses and trillions in other private obligations are now the responsibility of the U. S. government.

The problem is, even before this crisis, our government was deeply in debt. With each additional commitment we sink further and further into debt… closing in upon the moment that we can simply no longer afford even the interest payments on our obligations. According to even my most conservative calculations (using numbers provided by the Congressional Budget Office) a debt default by the U. S. government would be inevitable – were it not for one simple anomaly… the one thing that has saved the United States so far. I’m talking about our country’s unique ability to simply print more money.

You see, the U. S. government has one very important weapon to use in this crisis: It is the only debtor in the world who can legally print U. S. dollars. And the U. S. dollar is what’s known as “the world’s reserve currency. ” The dollar forms the basis of the world’s financial system. It is what banks around the world hold in reserve against their loans. That’s a secret that most politicians don’t understand: As things stand now, the U. S. government can’t go broke in any ordinary sense of the word because it can simply print dollars to pay for its bad debts. (It’s been doing so since March of 2009).

That might sound pretty good at first. Since we can always just print more money, what is there to worry about…? Well, let me show you… You see, as things stand today, America is the only country in the world that doesn’t have to pay for its imports in a foreign currency. Let’s say you’re a German and you want to buy oil from Saudi Arabia. You can’t just pay for your oil in German marks (or the new euro currency), because the oil is priced in dollars. So you have to buy dollars first, then buy your oil. And that means the value of the German currency is of great importance to the German government.

To maintain the value of its currency Germans must produce at least as much as they consume from around the world, otherwise the value of its currency will begin to fall, causing prices to rise and its standard of living to decline. But in America…? We can consume as much as we want without worrying about acquiring the money to pay for it, because our dollars are accepted everywhere around the word. In short, for decades now, we haven’t had to produce anything or export anything to get all the dollars we needed to buy all the oil (and other goods) our country required.

All we had to do was borrow the money. And boy did we. Take a look at this chart… Even as late as the 1970s, America was the world’s largest creditor. But by the mid-1980s we’d become a debtor to the world. And since the late 1990s we’ve been the world’s LARGEST debtor. Today, our government owes more money to more people than anyone else in the world. And that was before the financial crisis! In short, with all of these bad debts piling up, we’ve had to begin repaying our debts by printing trillions of new dollars. The impact of this is only just now beginning to be felt.

And once our creditors figure out what’s happening, they’re going to be very angry. I believe they will either completely stop accepting dollars in repayment… or greatly discount the value of these new dollars. I’m sure you think that sounds crazy, but as I’ll show you, it is already happening. And that will make our consumption-led way of life impossible to afford. Just think about the price of oil… Access to cheap oil has been America’s #1 gift of owning the world’s reserve currency.