Richard Russell tells King World News: “World War II marked the end of the British Empire and the pound as the reserve currency. The monetary forces of deflation may have ended the US Empire. In its frantic effort to hold back the forces of deflation, the Federal Reserve has created trillions of federal reserve notes.
Against this tide of liquidity, the dollar, so far, has held its own. I've been saying that the dollar is the Achilles heel of the US economy. As long as the dollar index holds above 78, I think it will continue as the world’s reserve currency. I believe one of two positions will occur in the near future: either the dollar will begin to break down, or interest rates will rise. Either course will set off a parade of mishaps.
Meanwhile, the newspapers are filled with stories about the US economy. But we read very little about the rising ocean of debt. It takes money to carry debt, and this in itself is deflationary. Therefore I see the year 2014 as a key year in US history.
All serious investors know that the US is facing a debt predicament. If so, what is the answer? We know that the current expansion of debt in the US is unsustainable. We also know that governments will do anything they have to -- to remain in power. So what, I ask, are we going to do about our compounding debt? The newspapers are filled with talk and gossip about business and profits, but not a word about the exploding debt. ...