State of the Union

The new president bores me to tears, so I neither watched nor read his speech. I see little evidence that Obama understands the problem caused by our fiscal and monetary policies, and absolutely no evidence that he has the will to go about the crucial task of deleveraging our massive debt.

On the other hand, Ron Paul has some interesting things to say, as always, concerning where we are heading. A sample:

It is impossible to predict the time when confidence will be lost, but it can come quickly. Resorting to buying other paper currencies will not be of much help. When the dollar crashes, most likely the purchasing power of all currencies-since all countries hold dollars as a reserve-will go down as well.

This means that dollars and other currencies will go into buying consumer items, precious metals and other physical properties. Consumer prices will soar, as well as interest rates. The central bank will lose control; and the more they inflate, the worse the confidence becomes. The interest rates will respond to these efforts by rising sharply.

If the Fed tries to reverse the run on the dollar, interest rates will also soar, and the pain on the American citizens will be of such proportion that political chaos will result. Either scenario leads to political and social chaos-the third event, and the most dangerous.