Mind-Boggling Political Cowardice!

Naked ambition and mind-boggling political cowardice have engulfed Washington!

Our leaders have done nothing — absolutely nothing — to reduce the largest budget deficits of all time. Instead …

• Democrats and Republicans are quibbling endlessly over supposedly “painful” budget cuts which represent less than 3 percent of the overall deficit. Even if one side ultimately “wins” that debate, 97 percent of the deficit will remain untouched.
• They’re drawing lines in the sand that make it next to impossible to plug the budget’s biggest sinkholes — Medicare, Social Security, and a cockamamie tax code that no one can fathom.
• Worst of all, despite all the rhetoric and brick throwing, they have actually colluded to make the deficit far larger: Late last year, Mr. Obama and Republicans cut a deal for a package of job benefits and tax measures that’s adding an estimated $900 billion in red ink.
• They promised to address the deficit “later.” But now, here we are, four months later and the only thing that’s been addressed is a few more fund-raising envelopes mailed to constituents.

That’s why, last month, the White House estimated the deficit would be nearly $1.7 trillion for fiscal 2011, the largest dollar amount of any country in the history of civilization. That was bad enough.

But now, just this past Friday, adding insult to injury, the nonpartisan Congressional Budget Office said that, even the White House’s numbers underestimate future deficits by $2.3 trillion over the next decade.

Bottom line: The federal deficit is blowing up like a Fukushima nuclear reactor, and virtually no one in power has the guts to touch it — let alone expose themselves to the political fallout of actually fixing it.

The immediate and inevitable consequence:

The U.S. Dollar Is Plunging Even
AFTER Massive, Global Intervention

When the most powerful central banks on the planet band together with huge amounts of money to intervene in global currency markets, you’d think they would at least get some bang for their big bucks.

Not so last week!

Despite massive, multilateral intervention by most of the world’s seven largest countries (G7), the trade-weighted dollar index plunged to its lowest levels since December 2009.

And the U.S. Dollar Index crashed to new lows in unison. (See chart.)

Despite every expectation by the G7 central banks that they’d almost certainly be able to push the Japanese yen down and the dollar up, precisely the opposite happened.

This is ugly. It can’t be written off as a temporary fluke. Nor can it be pooh-poohed as something that only remote central bankers and currency traders need be concerned about.

This is your money! And it’s the money that — directly or indirectly — impacts virtually every financial transaction on the face of the Earth.

When it collapses, the economic repercussions are a financial tsunami of untold dimensions, including:

• Surging prices for food, energy, and other commodities.
• Massive, long-term rises in silver and gold.
• Dramatic rises in interest rates — first, long-term rates; later, short-term rates as well.

And not long thereafter …

• Destruction of the middle class with a rapidly widening gap between the super-rich and the impoverished;
• Rapid disappearance of moderating voices, accompanied by extreme political polarization between the left and the right.
• And worst of all, the threat of a fundamental deterioration — even disintegration — in our cultural, social, and political system.

This is the path our leaders have now chartered for you and me. They know what they’re doing. Everyone can see how events — both in the U.S. and abroad — are spiraling out of control.

The only questions are …

How bad could it actually get? And
what can YOU do to protect yourself?

My Facebook friends include Weiss Research editors like Larry Edelson, Sean Brodrick, and Rudy Martin; industry colleagues like Porter Stansberry and Kevin Kerr; my son in Japan and my brother in Brazil; my cousin and children’s book author, Jane Yolen; dozens of other cousins on four continents; and, of course, readers like you.

Yes, I know, every company seems to have a Facebook page nowadays. But mine is different because it’s personal.

And to underscore how important I think it is for you to join me there, this morning I’ve uploaded a special article — “Why The Tough Times Are Just Beginning” — available exclusively to Facebook users.

If you’re already a Facebook member, you can go straight to my article by clicking here. Or if you’re not yet a member, Facebook will ask you to run through a quick-and-easy free sign-up.

Don’t worry. You don’t have to reveal personal information about yourself that you don’t want to. If you wish, you can use your Facebook membership strictly to view other people’s pages — like mine.

Good luck and God bless!

Martin