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The Demise of Reserve Currency the Dollar & The U.S. Economic Crisis

Many articles have been written concerning the U.S. economic downturn. Many are wondering what direction is the U.S. headed and how will the economy turn around. In order to understand the answer to those questions we must gain an understanding of what the real facts are concerning the national debt and what variables to look at.

First asked your self this how much is a Trillion dollars?

A Trillion is a Million Million

Spending $ 1,000 per minuet since the birth of Jesus equals 1 trillion.

cbnnews. chuck volmer

As of 10/28/2009 the U.S. national debt is 11.9 Trillion dollars and counting; projected tax revenue for 2009 is 2.7 Trillion while total expenses estimated to be 3.7 trillion dollars.

An important variable to consider is the U.S. derivatives market, a derivative is a financial instrument i.e. stock, bond, commodity that is leveraged to control a much lager value asset or item. A good example of this would be mortgage backed securities or commercial real estate notes which have been the major issue and cause of the collapse of the economy.

Due to the lack of regulatory guidelines by government officials and the Federal Trade commission. It has been said an average Leverage trade on a derivative is 100:1 meaning for every dollar traded in the derivatives market the return on trade or investment is 100 times the initial trade.

According to Comptroller of the Currency Administrator of National Banks 4th quarter value of derivatives held by the U.S. commercial banks is a staggering 200.4 Trillion dollars. Now we are beginning to see the truth about the economy and what is root of the problem here in the U.S. and Globally. The Federal Reserve is adding to the problem the Federal Reserve has printed more and more money to try and stave off a well overdue correction in the market. While the Fed continues to print more money the value of the U.S. dollar will continue to fall.

The solution to these issues are not easy but necessary in order for the economy to turn around. I believe the real answer to all of these issues is re-igniting the Spirit of America its time to come back to her roots which are innovation and Entrepreneurship. This is the true hallmark of our nation. I have stated before that out of every recession the Entrepreneur and innovator have proven to cause stimulation in the market place. Which allows for true economic recovery.

Dee Duncan.