My bet is this. One fine day the bottom is going to drop out of the dollar. There will be a swift and sharp order of magnitude change. The recognition of the problems will reach a point at which it starts to go exponential, not just in terms of people being vaguely conscious that things are not right, but in terms of actually taking action to protect themselves. Foreign central banks may be reluctant to dump their dollar securities and think it better to liquidate them slowly so as not to drive prices down and break the market, but when they observe that others are running for the exits, they will run too. There will be a run on the FED and a run on the U.S. government.
Runs upon the dollar and U.S. government debt are where things are now headed, and that is a scenario that calls for action now. And the more of us that act upon it now, the more likely it is that we bring that reality into existence.
The FED and the government do not want to see runs upon them. They will soft soap everyone as long as they can because rhetoric is the cheapest form of action, but really to prevent these runs from occurring, they have to take concrete measures that suggest a fundamental shift in the fiscal and monetary courses they are now on.
If the major governments of the world could get themselves and their peoples involved in a war like World War I that killed 20 million human beings, can a government not create such economic imbalances that it derails its debt, currency, and economy? It has already happened many, many times in the past.
The only novelty now is that it is happening in America.
