Friday, September 4, 2009

Another President not doing it right.....America's days are numbered

When Obama stepped up into the US presidency, the world was filled with hope that he will bring changes for more peace and prosperity. His critics, however, can already see his flaws even before he was elected. Now I am in support of those critics. Obama is not doing it right. He has similar policies to his predecessor Bush's. His foreign policies are still aggressive, his economic policies are as bad as - if not worse - than Bush's. He is just doing what Bush had done, and doing it on a much larger scale too.

The recent financial crisis has provided US with the opportunity to set things right. The US should have let the system crash, to get rid of all the excesses that had been built up over the past few decades, to get rid of all the companies that are bad. Yet, what the US chose to do was to get deeper and deeper into debt to bail out fundamentally unsound companies, and widen the budget deficit to more than US$ 1 trillion. The Obama administration is projecting budget deficit to hit $9 trillion in the next 10 years, up from $7+ trillion. Who can believe them? The real figure might even be higher. The US has missed its chance to apply the brakes. Now it is heading for a crash. Each time it tries to create currencies to 'battle' economic downturns, it is just postponing the inevitable. It is just gonna make future crashes much more painful for itself. Do people actually believe that US will be as strong as ever? Unfortunately yes. But look, who in the right mind will support a company that is saddled with ever-increasing debt, and ever-widening budget deficit? Only an insane person would!

Obama's various programs to stimulate the economy are wrong! He's just pumping in more and more phony USD into the system. He's just encouraging the masses to spend beyond what they can already spend. He's inflating a bubble that is already inflated. To think that the US can grow out of this problem with debts is preposterous. History has shown that this will never happen. Some will argue that without the US to consume Asian goods, Asia will not do well. That may be true in decades past, but it's certainly not true now. The US can only get into so much debt. They won't consume forever. Asians will have a higher standard of living if they kick the Americans off the island. They will have more goods for themselves to enjoy. They need not work that hard. The US is not helping Asia grow. It is in fact holding Asia back. Just look at the current crisis. For the first time, Asia leads the West out of the economic downturn. The US and UK are still in recession, with reports that they will get out of it this quarter. I don't think so. It is just an illusion that they're out of trouble. A bigger crash in the future awaits.

In the early 1900s, Great Britain was the world superpower. It lost its status to the US because of its flawed economic policies. The US has been doing exactly what GB had done wrong back then. People forget history fast. In the 21st century, we are going to see Asia, possibly China and/or India, gain the superpower status. The American Dream is over. Just like how people migrate to the US to build dreams in the 20th century, Americans are going to migrate elsewhere to build dreams now and in the future.

We are already seeing a shift of economic power from the West to the East. The Asian countries have strong economic fundamentals, with good savings and strong production. In the next few decades, Asia is going to shine brightly.

Although US influences are getting weaker by the day, there'll still be severe economic upheavel when the USD finally crashes. That is because the USD still forms 60+% of the world's reserve currencies, and the world is still holding on to so much US debt instruments. And don't forget that the whole world also uses fiat currencies. The whole world had also inflated the currency supplies. This includes Singapore. The East won't escape recessions and crashes. The difference between the East and West is that the East is better positioned to get out of recessions.

China and Russia have seen the dollar collapse coming, and they are already dumping the USD and buying up gold in huge amounts. China is already the world's largest gold producer, and it is fast becoming the largest buyer of gold.

The only safe haven is gold and silver, the best moneys that history has ever seen. The best metals that will preserve wealth. In the next few years, we will see a massive wealth transfer from currency and equity holders (generally) to real asset holders, especially gold and silver. Other commodities will do very well too. I believe agriculture will do supremely well too, given that this sector is way underinvested. Unfortunately, I don't have the time now to research more in-depth on it.

Buy Gold and Silver. It is really a once-in-a-lifetime opportunity. It is a sure one-direction bet for the next few years. It is as certain as the sun that will rise in the morning. Peace.

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