The Emperor Has No Clothes and the Empire is a Nudist Colony: An essay on why the dollar is doomed, why there is going to be a depression and why there will be no recovery

With 100% certainty, the world is headed for economic calamity, I believe that this fact will set in by this Fall, though it is possible for it to be put off until early 2016. The signs suggest that there will be a global deflationary depression as supply of commodities, most notably oil, is on the rise while demand for manufactured goods is on the decline due to economic malaise that has persisted in the west since 2008 and is developing in Asia. In the past when this has occurred the safe haven has been in US Treasury debt. This time will be different however for several reasons. First, the deflation will be limited to particular sectors while the policy response will create inflationary affects in other sectors. Second, six and a half trillion dollars of treasury debt held by foreign entities will be sold to address their own economic woes. Third, The US Federal Reserve doesn't have the capability to intervene in the markets the way it did in 2007 and the US government is in significantly worse shape. Fourth, foreign countries, particularly China, have developed international trading systems that allow for the exclusion of the US dollar as a part of the clearing of trade. These and several more factors suggest that the dollar reserve system will be a casualty of this depression. What remains is a question of whether it will die a quick death or if it will be prolonged and what will replace it. If it is prolonged the best place to be in the opening salvo will be US treasury debt, if there is a rapid move away from the dollar, however, that will be the worst performing sector and gold will become the best performing asset. What follows is a detailed consideration of some of the factors that are leading to the collapse of the dollar reserve system and contribute to the emerging deflationary depression. I have also included a portfolio that will work to preserve capital in the opening salvo of the greater depression and profit regardless of whether the collapse of the dollar reserve system is the trigger of the crisis or a casualty at a later date. I have also included a play book that will preserve most of a persons wealth in the opening salvo of this depression which may hit at any moment.