The U.S. Greenback is in Big Trouble!

The U.S dollar and bond markets are now in serious trouble! This week's Fed figures showed a collapse in U.S. bond purchases by foreign central banks. In July they fell from $97 billion to only $19 billion.

America desperately needs foreign capital flows to cover the current account deficit which is expected to reach $850 billion this year, or $3.4 billion a day. If the foreign central banks continue to back-off from buying Treasury and Agency paper, the Fed will be forced to step into the breach and buy it themselves and that means much higher inflation. Foreign central banks have been funding 30% of America's debt so far. If you pull them out of, or reduce their involvement in this equation, you've got big trouble in little China.

The flight from the U.S. dollar has already begun. Iran has massively cut its dependence on the dollar and now 70% of its foreign assets are in euro's, other currencies and gold.

60% of all oil exports are now in euro's.

For the first time ever, Saudi Arabia refused to cut interest rates alongside the Fed, signaling that they are preparing to break with the dollar which could very easily set off a stampede out of the dollar and into the euro right across the middle east. European countries as well as Japan are "dumping their dollars" to buy American businesses in order to cut their losses.

U.S. bankers via two deep interest cuts are putting the nail in the dollars coffin. Their short term solution will push up long-term interest rates, which in turn will drive up mortgage rates and drive real estate into a deeper crisis.

Money and credit creation will increase which in turn will bring hyperinflation. which will create a major recession which then can very easily spill over into a depression.

The U.S. dollar is collapsing, and as it does, so will consumption. And as all of this witches brew boils and bubbles, the end result will be that the U.S. dollar will no longer be the world's reserve currency and America's dominance in all world affairs will be diminished.

For all those who laughed when knowledgeable people were, and still are, predicting a one world government with a one world currency ... I've got a sneaking suspicion that all of that laughter is about to come to a screaching halt.