The United States of America is racing towards ruin at breakneck speed and her captain, President Barack Obama, seems blissfully ignorant of the peril he is piloting the nation towards.
As Obama traveled the country to beg Americans to vote Democrat last week, new images of the RMS Titanic’s wreck were published. Taken from three miles deep in the Atlantic, the photographs are further testament to a time when technological arrogance and Edwardian pride believed that government and industry could surmount all challenges.
When completed in 1911 the Titanic was considered the Eighth wonder of the World. Its captain, Edward J. Smith, boasted that the ship was unsinkable.
“I cannot imagine any condition which would cause a ship to founder. I cannot conceive of any vital disaster happening to this vessel. Modern shipbuilding has gone beyond that,” Smith said.
The Titanic’s aura of invincibility stemmed from the period; it was the onset of the 20th Century and men believed machinery could overcome all, even nature. This was a notion the populace, especially the traveling public, was eager to swallow.
Captain Smith epitomized the age. He was at the apex of his career and was White Star Line’s most senior captain, chosen specifically to skipper the Titanic.
So convinced were captain and crew of the ship’s indomitability that they raced across the Atlantic at record speed. On the evening of April 14, 1912 the Titanic was sailing in the dark at 22 knots. Smith seemed oblivious to icebergs which could easily cross the great ship’s path at that time of year. It was a grandiose display of arrogance which cost more than 1,500 lives.
The PBS special, “Lost Liners” puts the blame solidly on Captain Smith.
“Fault rests on the Titanic’s skipper for not exercising more caution. Having received repeated ice warnings, he did not slow his ship down. In fact, Captain Smith had a casual, almost cavalier, air that evening, when he lingered late over a second cigar following an elegant dinner with some of the ship’s more distinguished passengers.”
Obama’s Orders — Ahead Full!
A century later, the greatest marvel of the Age of Enlightenment is the United States of America and it is on a collision heading. The U.S.A. will not be sunk by icebergs, but by debt and policies which sacrifice the dollar for political expediency. At the helm is Obama who seems more worried about his crew (Democrats in Congress) keeping their jobs than he is about the ship (America) itself; more concerned about his place in history than America’s immediate future.
We are trapped in the brig with a President who continues to steam forward regardless of opposition or hazard.
“From the day I took office, I’ve been told that addressing our larger challenges is too ambitious; such an effort would be too contentious,” Obama said during his State of the Union Address, Jan. 27, 2010. “For those who make these claims, I have one simple question: How long should we wait?”
One answer might be: “Until it is safe!”
No doubt Obama is too busy racing ahead to even hear this warning. Just this past Labor Day the President announced he is moving forward with even more spending; some $50 billion in new road, rail and airport construction projects and a plan to both overhaul national infrastructure spending and jump-start a sea of jobs.
The President spoke in Milwaukee to union members about his ambitious agenda to construct 150,000 miles of new roads, a network of high-speed rail lines and a next-generation airport system that includes 150 miles in new runways.
Left unsaid is that this expansion will have to be done on more borrowed money. Also absent from the speech was the fact that the unemployment rate won’t budge much below 10 percent and a credit crisis which began more than two years ago continues to linger despite trillions of dollars in Federal spending.
Instead Obama reiterated that more spending won’t raise the deficit.
“This is a plan that will be fully paid for and will not add to the deficit over time — we’re going to work with Congress to see to that,” Obama said. “All of this will not only create jobs now, but will make our economy run better over the long haul.”
It is hard to follow the President’s logic. A couple of days before his $50 billion spending pledge for transportation, the non-partisan Congressional Budget Office said this year’s U.S. Federal budget deficit will top $1.3 trillion.
That would be a tiny improvement of $71 billion over last year’s record $1.4 trillion deficit and hardly the direction we need to go if the President wants to restore world confidence in America and the dollar. After all, the 2009 and 2010 shortfalls are the largest ever. Each is three times bigger than the government’s annual deficit has ever been.
U.S. Dollar: Going, Going, Gone!
To say that deficits don’t matter is to ignore history and to put the county in peril. Even some of Obama’s crew admits that much. Earlier this year Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, issued a stark warning regarding the ballooning U.S. Federal government annual deficit and cumulative national debt.
“Without pre-emptive action, the U.S. risks its next crisis,” stated Hoenig, who went on to explain that Obama’s deficits endanger the Fed’s ability to fulfill its mandate of maintaining economic growth and price stability.
Hoenig is the first senior Federal Reserve official to go on record and state that the current U.S. fiscal policies are unsustainable and, unless halted and reversed in short order, will precipitate hyperinflation.
At the risk of carrying my analogy too far, Obama has a crew member in the crow’s nest screaming, “Iceberg!” and still he steams even faster.
How To Save Yourself
We don’t need a banker from the Federal Reserve warning us. The markets themselves are flashing “Danger!” As the chart below shows, the dollar has been sinking for a decade. It got a brief respite in 2008 because of the deflationary scare. But that recovery appears to be over and the downward trend-line remains very much intact. I expect that over the next two years the dollar will continue to fall further once Obama’s inflationary policies get traction.
A decade ago I wrote to my subscribers this headline: “Get into the Lifeboat!” In that newsletter I spoke about the fact that when the Titanic first struck the iceberg, most of those on board didn’t believe it could sink. Those that were smart enough not to believe in the fallacy of that age actually got off the ship and survived.
At the time of my “Lifeboat Alert,” gold was trading under $300 per ounce. At this writing gold is fetching more than $1,260 per ounce. My expectation is that after Obama really does sink the nation and the dollar, gold will be trading above $2,000 per ounce. It is not too late to save yourself, but time is running out.
Action To Take
Buy physical gold. I like American Gold Eagles, Canadian Maple Leafs and African Krugerrands. All three are stamped in English, have their gold content stamped on them, come in convenient, well-known sizes (1-ounce, half-ounce, quarter-ounce and one-tenth-ounce).
Yours for real wealth and good health,
Myers’ Energy and Gold