Drastic Measures Needed NOW …

 

From my home base in Bangkok, Thailand, I can tell you — in no uncertain terms — that …

Americans are getting screwed by their own leaders.

The U.S. economy is headed down the tubes, again.

Washington’s shenanigans with its debt, debt ceiling, and political grandstanding is shameless … and nothing but a bunch of smoke and mirrors that is killing the country and ruining the lifestyles of all Americans, not to mention their children and grandchildren.

That we are witnessing the decline of the American empire, an event no less historic than the fall of Rome.

And that every American should now take steps to protect themselves. I’ll get to those in a minute.

First, I want to lay out the steps I think need to be immediately taken to save our country. If we do the following, we have the chance to remain the number one economy in the world, the number one superpower, and have a bright new future for generations to come.

Anything short of the following steps, will simply not work.

We must immediately stop all Federal borrowing. Even to rollover existing debt. Yes, that means lots of short-term pain for everyone, but it will be worth it.

We must freeze all outstanding debt. No more payments on that debt, not even interest payments. Yes, this too is going to hurt. But it will be worth it.

At the same time …

We must monetize all, and I mean 100%, of all outstanding debts. Print the $144 trillion necessary to pay all debts off, all IOUs, all Social Security payments, all Medicare programs, all pensions, all foreign holders of our bonds, everything.

Inflationary? One might think so. But not really. Bonds are money. All the bonds out there represent money injected into the system, but at a huge cost: Interest expense!

So why not chuck them and get rid of them all. The interest expense on the debt alone is killing our country.

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Don’t believe me? Then consider the following …

From 1990 to the end of 2010, the debt cost us $7,311,652,660,508.89 in interest expense.

Yes, that’s $7.311 TRILLION in just interest expense. $21,606 in interest expense paid for every man, woman and child in the country!

It also represents fully half of our total $14 trillion in national debt now outstanding. How unproductive!

And so far this fiscal year, for the nine months ended June 30, interest expense cost us another $385,871,949,498.62.

Annualized, for fiscal 2011, that means the interest expense on our debt will hit a record annual high $514,494,667,667 billion.

That’s another $1,558 in interest expense just this year for every man, woman and child in the country.

What a waste. Especially when you consider that up to 40% of the interest expense we pay goes to foreign governments and entities! Talk about a transfer of wealth from the U.S. to other countries. Wow!

Once we monetize all debts and obligations to everyone, we must pay them in like kind, either dollars, gold, or some sort of combination that includes shares in the U.S. government that pay dividends based on annual earnings.

Put another way, we must run our government like a corporation, a for profit company that is in the business of running the country for profit for its shareholders, the American citizens.

There must be annual shareholder meetings. Quarterly and annual audited financial reports. Directors and CEOs elected — and thrown out — by shareholders. A third party independent Board of Directors and auditors. And more.

We must also …

Get rid of the current tax system, its loopholes, its social engineering rules and the army of more than 106,000 IRS workers and tens of thousands of tax lawyers and tax preparers that are nothing more than leeches on a tax system gone bad.

Replace it with a national sales tax. Or a flat tax. But no more indirect taxation of income, no more capital gains taxes, no more alternative minimum taxes (AMT), no more bracket creep due to inflation. No more IRS. You pay your tax at the sources of your consumption, or a flat rate on your total income, no deductions. Period.

And we must also, with the governments and central banks of the world, introduce …

A single world currency for all international transactions. Each country would be allowed to keep their existing currency, but for domestic purposes only. Kind of like a closed capital account.

The single world currency would be based on a basket of commodities, and each country’s exchange rate with the single world currency would fluctuate. But the single word currency, let’s call it SWC for now, would act as a firewall, helping to prevent contagions from developing as the result of fiscal irresponsibility in any one country.

More steps would be necessary than I could possibly cover in this column. And the undertaking of overhauling the country’s debts and thereby the world’s monetary system would be an enormous task.

It would certainly also be painful in the short term. But on the other side of it all, I see a world free of debt … a world full of entrepreneurs and innovation … and a real, true world of liberty, just as our forefathers wanted for this country.

In the meantime, there’s no question you must continue to protect your wealth like never before. That means …

A. Holding gold in various mediums: Physical, ETFs, gold mutual funds, and mining shares.

B. Staying OUT of the U.S. Treasury note and bond markets. Period.

C. Being very careful in the broad U.S. and European stock markets. They remain vulnerable in the short term, but long term, I am becoming more and more bullish due to the near constant devaluations of the dollar, the consequence of which will ultimately mean reflation in stocks.

D. Investing in regions of the world that are growing, where there are no indebted countries, where there are consumers spending money, and where entrepreneurship is leapfrogging higher.

That’s Asia, where there are huge opportunities to grow your wealth, and where there will be for years to come.

Best wishes, as always,

Larry

P.S. I can’t think of a better time to become a member of my Real Wealth Report. I am now preparing a slew of new recommendations to take advantage of the next leg up in precious metals, oil, agriculturals, and more.

So if you’re not already a member, join now. It truly is a bargain that can pay for itself hundreds of times over. Click here to join now.

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