Why financial readjustment is imperative now?

 DOLLAR PRIVILEGE IS COMING TO AN END

U.S. NEEDS TO PREPARE TO LIVE WITHIN ITS MEANS

The world is in the midst of a change in the balance of the world's economic system. It is happening, and adjustments will be made whether from willful action or from catastrophic uncontrolled events.  For the United States, the unrivaled western leader, post WW2, it is going to be a painful and difficult process. 

With the rise of competing economic powers worldwide the privilege of the United States having its currency as the worlds reserve currency, is coming to an end, it is already in the process of losing that status, and it is not going to be reversed. 

At the end of WW2 the dollar was considered "As good as gold", but slowly it has been abused and diluted until it is a shadow of its former self. It has only continued because there is not at the present an alternative. The dollar not long ago was used for over 80 of global transactions, now it hovering near 50%. 

The reserve currency dollar allowed the United States to engage in a deficit spending binge that has now become 30% of the budget, it is going to collapse and it is inevitable. 

This weekend I listened to a CNN analyst who claimed the United States is the richest and most powerful economy in the world, he listed the Gross domestic product, the increase in living standards and a lot of statistics to back up his claim, except for 1, he never mentioned the debt or the now fixed annual deficits. 

Here is an interesting statistic, the total of bank deposits in the U.S., is $17.9 Trillion. The Total IRA balance is $15.2 trillion and the total 401 K balance is $9.9 Trillion. This is a total of $42. Trillion and that was before the decline of last week. The Federal debt is now $37 Trillion. That would leave a positive balance of $5 Trillion. The reality is, it would take the combined balance of all savings and pension investments to pay off this debt. For some reason no one ever considers that this country is living on debt and much of the prosperity is circular paper transactions of questionable financial instruments, not wealth producing activity.

Now that we are coming to a financial reckoning that expanding the debt is going to come to an end, a major readjustment needs to be made.  

To simplify the formula, spending needs to be reigned in and real wealth producing income needs to be increased. It will take cooperative effort from Americans to accomplish this or the alternative will be something similar that happened when the Soviet Union collapsed, pensions evaporated, government benefits of all types ended and the result was poverty and chaos that took 20 years of effort to recover.

The change and readjustment is coming, it is inevitable, and yes it will be in your lifetime, unless you are leaving very soon.