So far, the only thing keeping other countries in the fold is the lack of an alternative reserve currency. As financial threat expert James Rickards says, “The number one vulnerability is the dollar itself. We’re printing them and shoving them out the door, and the Fed is basically out of bullets. So why hasn’t the dollar collapsed? The short answer is that for now global investors don’t have any other choice.”
As Politico’s Eamon Javers expains:
That is, there simply aren’t enough Euro- or Yen-backed securities for investors to shift their money out of dollars and into some other currency.
But what if some kind of global coalition – say a trillion-dollar sovereign wealth fund allied with several countries around the world – banded together to create a gold-backed alternative to the dollar?
“If that happens, that’s the end of the dollar,” Rickards warned.
So why is the Vatican so gung ho for a global reserve currency? Skeptics would say that the Vatican opposes the U.S.’s control over the global economy. The Vatican under Pope Benedict XVI has routinely gone out of its way to criticize capitalism as unfair and problematic – in 2009, for example, the Pope issued an encyclical calling for a “profoundly new way” of organizing business, suggesting that a global political authority be established to push for “the common good.” This is well within the tradition of modern Popes, who have almost universally endorsed the notion of a super-national government. This is understandable given the universalist mission of the Catholic Church.
The real problem here isn’t with the Vatican. The real problem lies at home. If we don’t want a global reserve currency, all we have to do is shore up the dollar. If we want to shore up the dollar, all we have to do is cut spending. And if we want to cut spending, all we have to do is stop electing politicians based on how much bacon they bring home. If we do not, the Vatican has already spelled out how America will collapse – and in that, at the very least, Pope Benedict is right on the money.
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