Which Of The Currencies Of The World Is Going To Crash First?


The Economic Collapse

Last year was an absolutely fascinating time for world currency markets.  The yen, the dollar and the euro all took their turns in the spotlight.  Each experienced wild swings at various times, but the overall theme that we saw was that faith in paper currencies is dying.  The biggest reason for this is the horrific sovereign debt crisis that has swept the globe.  The United States, Japan and a whole host of European nations are all drowning in debt.  The U.S. and Japan are both steamrolling toward insolvency, and several European nations would have already defaulted on their debts if they had not been bailed out.  So which of the major currencies of the world is going to crash first?  Will one (or more) of the big currencies fall before the end of 2011?  Once one major currency collapses will the rest start to fall like dominoes?  The truth is that the world has never seen a sovereign debt crisis of this magnitude in all of human history.  Almost the entire globe is drowning in a sea of red ink and it has brought us right to the brink of financial disaster.

So which of the currencies of the world is going to be the first to come crashing down?  Well, let’s take a quick look at the yen, the euro and the dollar….

The Yen

Japan has the 3rd biggest economy in the world, but they are also deeply swamped in debt.  At well over 200%, the Japanese government has the biggest debt to GDP ratio of all of the major industrialized nations.  In fact, it is estimated that this massive pile of Japanese government debt amounts to approximately 7.5 million yen for every person living in the entire nation of Japan.

So why hasn’t Japan defaulted yet?  Well, a big reason is because Japan has one of the highest personal savings rates on the entire globe, and Japanese citizens have been more than happy to gobble up huge amounts of Japanese government debt at very, very low interest rates.

However, Standard & Poor’s has warned that they may have to slash Japan’s credit rating if the debt gets much bigger, and once confidence starts to falter Japan is going to have to start paying higher interest rates.

At some point Japan is going to be facing a financial meltdown, but for the moment they are hanging in there.

The Euro

Several large European nations would have already defaulted on their debts if they had not been bailed out last year.  Greece, Portugal, Ireland, Italy, Belgium and Spain are all on very shaky ground right now.  Several of them have already had their credit ratings slashed.

Bond yields all over Europe have been absolutely soaring in recent months.  It is getting really expensive for many of these nations to take on new debt.  Interest rates on 10-year Greek bonds went from 6 percent up to 13 percent in just a single month at one point in 2010.  In fact, even some of the nations that aren’t in the most danger are even feeling the pain.  For example, the cost of insuring French debt hit a new record high on December 20th.

Right now there are all kinds of rumblings that more European nations are going to need bailouts very soon.  Professor Willem Buiter, the chief economist at Citibank, is warning that quite a few EU nations could financially collapse in the next few months if they are not rapidly bailed out….

“The market is not going to wait until March for the EU authorities to get their act together. We could have several sovereign states and banks going under. They are being far too casual.”

So where is all of this bailout money coming from?  Well, a lot of it is coming from Germany and a significant amount of it is actually coming from the United States.

But will wealthy nations such as Germany be willing to pour hundreds of billions of euros into these financial black holes indefinitely?

Are the Germans going to accept a situation where they are permanently bailing out the “weak sisters” all over the rest of the continent?

Already some prominent politicians in Europe are calling for the European “bailout fund” to be doubled in size to about 2 trillion dollars.  Other analysts believe that it is going to take at least 4 or 5 trillion dollars to properly bail out all of the European nations that need it.

In any event, the truth is that the situation is really, really bad.  If at some point the bailouts stop, the defaults are going to begin.

The Dollar

The United States has the biggest national debt of all.  The 14 trillion dollar threshold has just been crossed, and the national debt is now less than 300 billion dollars away from the 14.294 trillion dollar debt ceiling.  If the U.S. Congress does not raise the debt ceiling, the U.S. government will shortly begin to default on its debts.  Of course everyone fully expects that the U.S. Congress will indeed raise the debt ceiling just like they have every time before.

However, U.S. politicians are not going to be able to keep kicking the can down the road forever.  Today the U.S. national debt is more than 14 times larger than it was just 30 years ago.  Everyone around the world is beginning to realize that this debt is not even close to sustainable.  Investors are beginning to become more hesitant about loaning the United States money.  The Federal Reserve has been forced to step in and “buy” more and more of the debt the U.S. government is issuing.

Yields on U.S. Treasuries have been moving up in recent months and this could eventually become a huge problem.


Well, the sad truth is that the U.S. government has been increasingly using short-term debt.

At this point, the average maturity of U.S. government bonds has fallen to 4.4 years.  The is the lowest figure of all the major industrialized nations. That means that the U.S. government must constantly roll over massive amounts of debt.

As a point of comparison, UK government debt has an average maturity of approximately 13 years.  That obviously gives them a lot more breathing room.

For the United States, the situation could become incredibly dire if interest rates start to go up.

If interest rates on U.S. government debt reach an average of 7 percent, interest payments on the debt would gobble up approximately 45 percent of the tax revenue that the U.S. government takes in each year.

Yes, at that point the game would be over.

But what the United States has going for it that the European nations do not is that the United States can just have the Federal Reserve keep printing currency.  Unfortunately for the nations involved in the euro, they do not have that option.

That is why an increasing number of analysts believe that it will be the euro that will crash and burn first.

But only time will tell.

There are even many that believe that authorities at the highest level actually want the dollar, euro and yen to fail.


Well, many of the same individuals and groups that brought us NAFTA, the WTO, the IMF, the OECD and the World Bank believe that it would be absolutely wonderful for humanity if we could all have a single, united global currency.  The “chaos” produced by the fall of our existing global currencies could provide the perfect “opportunity” to provide the grand “solution” that they have been hoping to introduce all along.

All over the world top politicians and financiers have been very open about the fact that a world currency is coming.  In fact, men like George Soros are openly talking about these things.  The United Nations has been publicly calling for the U.S. dollar to be replaced with a new global currency for some time now.  Just this week Chinese President Hu Jintao stated that “the current international currency system is the product of the past.”

So will the American people just sit back and accept it when their dollars are replaced with a new global currency?

Well, sadly, when things go badly most Americans seem to be willing to accept just about anything if it will mean that things will go back to “normal”.  When the global economy falls to pieces, and there already lots of signs that we are on the verge of such a collapse, will the American people be willing to say goodbye to the dollar if politicians from both major political parties tell them that the new global currency is the “answer” to our problems?

Hopefully the American people will wake up and will realize that “globalism” is rapidly wiping away almost everything that it means to be an “American”.  Now even many of our children and teens are primarily identifying themselves as “citizens of the world” rather than “citizens of the United States”.

Even if the U.S. dollar does collapse, it is absolutely imperative that we continue to have our own national currency.  The U.S. Constitution does not make any provision for any sort of “world currency”.  If we allow the globalists to push a truly global currency down our throats it will be another giant step towards the creation of a totalitarian one world system.

So what do you think about all of this?  Please feel free to leave a comment with your thoughts below….

7 Responses

  1. suranganie says:

    America is a country which has sinned more than any planet in almost all the galaxies.
    As such the mother nature will teach them a lesson unless they realize their mistakes and respect the free will of the other countries. Well, we all are human beings and there is no reason why we should think of cast, creed, religion, bases or any such division as we all have come to this earth for a short time, and our aim should be to serve not to grab and feel that we are the leaders, or we are the rich.

  2. frederico says:

    The ultimate goal will be some global electronic currency unit with everyone chipped. If you are subservient, your chip stay active and you get to eat. If you fight the system your chip is deactivated. That came right from the mouth of a Rockefeller.

  3. Zafar Ahmad says:

    The New World Order elite are moving faster than ever to create a Totaltarian State; moves must be made to do the following:
    1. All Afro-Asian countries must set-up their own Afro-Asian United Nations and leave the UN. We all know that the UN is an instrument on the Western powers that includes Russia.
    Get out of the IMF and the World Bank; create your own Afro-Asian Co-operative Bank for the mutual re-construction of member countires. The AAUN should not have any Inner-Circle like the hypocritical Security Council.
    2. Drop the American Dollar as an International Currency for Trade.
    3. All countries should have their own currencies and exchange rates by mutual agreement.
    You don’t need loans but co-operation based on mutual benefits.
    4. Forget the International Court at the Hague, creat your own Court of Afro-Asian Disputes.
    5. All natural resources of each country should be owned by the people of that country.
    I believe the world will be a better place to live.

  4. Abaddon says:

    Financial globalism means that all the nations have put their eggs in the one global financial market, bad idea. The consequences are seen all around the world. In the EU the collapsing economies of those who have thrown in their lot with the european union and handed over their soveriegnty through getting rid of their own currencies is all to apparent. All it has done is to open up the economies of vulnerable nations to the international banking vultures, the proof of that is all around us, as we see them pillaging and raping one nation after another. It only takes one match to set a great woodland on fire, likewise it only takes a handful of the richest banksters to pillage a world. Then they get their political puppets to tax and bleed their people’s of more money to replace the money their gangster bankster friends stole off the people in the first place. They call it “austerity measures.” The people never lost or stole any money, it is the bankers and their looting of nations. They have hidden their objectives behind a plethora of scams, such as derivatives, hedgefunds, and ponsi schemes, but the end result is always the same for the money men, for THEY end up with all the money and Joe public ends up with all the debt. GREED is GOOD, so said Michael Douglas in the Movie Wall St. No it is not, for the money men are destroying all around them, and it is only a matter of time before they are destroyed to. Greed is a cancer, and that cancer is global, incurable, and that financial cancer is only ONE of the problems affecting the whole world.

  5. Davidus Romanus says:

    “The U.S. Constitution does not make any provision for any sort of “world currency”.”
    Well guess what? The US Constitution makes no provision for a US currency either. The Constitution says only gold and silver can be money. If the new “World Currency” is gold and/or silver, that will be OK with the Constitution (and OK with me too). If it’s not, it will be just a stop gap to kick the can down the road for a few more years before it too collapses.

  6. Amir Murtaza says:

    These major currencies will collapse but there will be no “world currencies”. There will be world wars for the currencies. It is impossible to have a ” world currency”. In such a mistrust environment and many powers emerging everybody will claim its piece of the pie that will trigger a war and new power will emerge and new system will rise and the system will totally negate capitalism and push everybody toward socialism.

  7. If one or more countries default on their loans to the world bank, it could cause a global financial crisis. The globalist agenda is to destory the dollar. When this occurs, all the major currencies will fall like a set of dominoes or house of cards. All the industrialized nations the G-20 are all interconected and dependent on each others economies. Make no mistake. The elite globalist agenda is to destroy all the major currencies before they can establish a one world currency and one a world government under international bankers. After this new currency is introduced the first step will be a transition to a paperless money system. The financial institutions will issue each person a combination debit and credit card by which all transaction can be made. The final step will be to embed a computer chip in your right hand or forehead, before you can buy or sell. They are already imbeding computer chips into animals for identification purposes.

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