In an interview Wednesday, he added that “it's important to recognize that if the nation keeps adding to deficit spending through tax cuts or more stimulus spending, at some point people could lose confidence in the U.S. economy and that could lead to a double-dip recession."
What he means is that central banks around the world are losing confidence in the value of the dollar, which could lead to a currency crisis. Just yesterday the IMF said that it wants to replace the dollar as the Reserve Currency.
Obama is trying to convince the world that America will get it spending under control so that they do not continue losing faith in the value of the dollar. Without a gold backing, faith in our nation is the only thing that supports the value of the dollar in the global economy. In the mean time, gold is headed to $5000 per ounce.
The value of the dollar is the cornerstone of the economic strength of America. If the value of the dollar continues to drop, America will lose its economic strength and its influence as the world’s only remaining superpower.
The value of the dollar is in a dangerous position and Obama is going to have to make some very hard decisions in the opposite direction of this agenda is order to save the dollar from a crisis.
For now, Obama is trying to talk up support for more confidence in the dollar, but talk is cheap and he is going to have to start taking action very soon. Foreign central banks no longer trust political leaders in the West. They only trust policy actions.
In the end, the U.S. will have to face the music and that means raising interest rates to double-digits to extract the trillions of dollars that was poured into the economy - in order to save the value of the dollar.
That means that Obama and company have no choice but to intentionally drive the U.S. economy directly into a double-dip recession.