Is America on the verge of a Collapse?

In recent years many analysts have predicted that America’s out-of-control debt would destroy our country.

And yet, our economy seems to be doing ok.

Why? Why hasn’t this ticking time bomb exploded?

It all comes down to one seemingly simple, but very important concept: Trust.

We all know that trust is the most important glue in any relationship, either in business or in our personal lives. This is also true in our global financial system. Most of us take this for granted, but trust in the U.S. government is a big reason why America has become such a dominant force over the past century.

It’s because of trust in our government that the U.S. has been able to borrow at the lowest interest rates available in the world for years. Even in 2008, in the midst of the worst financial crisis in 80 years, our federal government was able to borrow vast sums of money at an interest rate close to 1%. It was trust that allowed our government to bailout major banks and prevent the collapse of our financial system.

And it’s that trust that has allowed our government to get away with a spending spree of historic proportions… for far longer than anyone might reasonably expect.

Trust in America has made it easier for us to import more than we export, to consume more than we produce, and to spend more than we earn.

It’s a huge benefit that has allowed us to live in McMansions, drive luxury cars, pay far cheaper gasoline prices, buy 3D HDTVs, load our pantries with cheap food, and so much more.

Trust in the U.S. government and its institutions, it turns out, has given us the greatest standard of living the world has ever seen… it’s what has made the American dream possible.

If this trust is shattered, however… well, our way of life is over.

Once trust in America is broken, it will “lead to a huge decline in the standard of living of U.S. citizens like nothing we’ve seen in nearly a century.”

Unfortunately, that’s exactly what will happen once the public wakes up and starts to understand how America really works.

“Monetary Systems Change Every 40 Years or So”

Before 1914, our global monetary system was based on the classical gold standard. The dollar was backed 100% by gold.

But in 1914, the monetary system changed into a Gold Exchange Standard, in which the dollar was only partially backed by gold. A $50 bill, for example, was backed by just $20 in gold.

Then came 1945, and a new monetary system known as Bretton Woods. Under that system, world leaders established the dollar as the global reserve currency and linked it to gold at the rate of $35 per ounce.

Finally, in 1971 Nixon canceled the direct convertibility of the US dollar to gold. For the first time in American history, the dollar was totally fiat… totally without backing in gold.

Today, our fiat monetary system is 42 years old.

But notice that all the monetary systems we’ve used in America since late-1800s have each lasted about 30 to 40 years. Seems to me like it’s about time for a major collapse.

And it’s closer than anyone thinks.

Are you awake yet?

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