The Little Book of the Shrinking Dollar: What You Can Do to Protect Your Money Now

The United States Reaches the 100 Percent Milestone

This isn’t the kind of club you brag about joining. America has just become the newest member of the triple-digit debt-to-GDP club. Our current GDP stands at $15.18 trillion. Our debt burden now tops $15.4 trillion. Who else is a member? Well, Greece of course. Spain too. Portugal, Poland, Austria, Belgium, and France all shoulder heavy debts. On the spectrum, Japan shoots off the charts at over 210 percent.

Now here’s what makes the U.S. situation even closer to Canada circa 1994. On August 5, 2011, the S&P stripped us of our AAA credit rating. Was that any kind of wake up call to Washington?

History shows that the people who save and invest grow and prosper, and the others deteriorate and collapse.

—Jim Rogers

Back in 2007, we saw the credit market drop to $3 trillion and wrote readers “maybe the rest of the world is sick and tired of our addiction to cheap credit.”

Obviously we spoke too soon.

I ended 2011 down in Nicaragua with my fellow Agora Financial editor Chris Mayer. I shocked him and a dear reader one night when I said, “I’m long Treasuries, at least for the short term.” They were beyond belief, but I think I am right.

Sure enough, a few weeks later, BusinessWeek boasts that the U.S. government received record demand for its bonds in 2011. Thus, they conclude glibly: “Barack Obama may have little difficulty financing a fourth consecutive year of $1 trillion budget deficits.”

In the year that we were stripped of our ...