Behind the scenes Russia has already started a war with the United States, a war very much different than those of the past. A war less about bullets and very much about currency and economy as emerged. Russia's economic war with the U.S has gone largely unnoticed, but its significance should not be understated. I don't know what our presidents intentions are, but at this juncture if we don't reform our economic policies immediately, America will see another recession rivaling that of 2008. A confluence of events perpetuated by an inept fed has allowed this to materialize into an almost certain crises.
Approximately a couple months before Russia invaded Crimea, something curious was taking place behind the scenes. Russia started dumping U.S. treasuries in rather large blocks. As Russia's proxy war progressed with Ukraine, their well known partner China began selling off U.S treasuries at a frightening pace. China being the largest foreign holder of U.S debt, suddenly becoming the number one seller of u.s debt over the last 15 months had Washington a little bemused. Not so mysteriously, Belgium started buying these treasuries, hundreds of billions worth, a considerable amount more than they've ever purchased. Wether or not the U.S was the mystery buyer is up for debate, but theres little doubt that Belgium was used as a proxy.
When the Fed began reducing its money supply to finance runaway government, they left themselves without many options if a scenario such as the one we are seeing to occur. In theory, the United States government is a separate entity to the fed entirely, but that's in theory. In reality the fed prints new money to pay for federal spending. There's over 127 trillion in unfunded liabilities. Government programs such as social security, Medicare, Medicaid, FHA, Obamacare, along with paying interest on the debt, will in a few years contribute to an astounding 85 percent of the budget. Even with sequestration, the budget control act of 2011, mandatory spending on entitlement programs will drive the deficit to one trillion by the end of the decade.
For every dollar of debt the government creates, the U.S. economy gets three cents of growth in return, compared to the $2.41 cents of growth for every dollar in the 60s. These kind of returns on spending have made it certainly clear that spending money alone will not grow the economy. The Feds monetary policy has become reckless, interesting rates would not be close to zero if the economy were healthy. Over twenty three percent of Americans are out of work. The largely reported on unemployment number of hovering around six percent is meaningless when it only accounts for those actively seeking out employment. The misery index, an economic indicator that simply adds the unemployment rate to the inflation rate actually has our economy five points above where the U.S was at the height of the Great Depression. The statistics can get a little confusing, but if you were to tie it together it would in no uncertain terms point towards a fed that's insolvent.
The fed along with our president has walloped themselves in a folly of imagination that foreign enemies will not seek to take the U.S dollars place as the reserve currency internationally. With a weakened economy coupled with an incompetent president the crises we face is largely by our own governments making. Russia has officially pulled out of the petrodollar (oil priced in dollars) and the likelihood of China following suit, will have Washington perilously searching for a solution.
Russia is already encroaching on American airspace with nuclear capable aircraft. Although many journalists will dismiss this as Russia merely showcasing its global capabilities, I believe their intentions to be a little more nefarious. In the coming years a Russian, Chinese alliance will emerge, aiming to knock off the dollar as the de facto currency globally. How we respond will have global implications.