From Porter Stansberry in the S&A Digest:

As longtime readers know, I often use Friday's Digest to introduce you to new techniques and strategies you're unlikely to learn about anywhere else. I've written extensively about why I believe most investors should focus on investing in corporate bonds... why selling stocks short will make your portfolio safer (not riskier)... and why selling puts can be the only real way to make a lot of money without taking any risk at all.

This week, I want to give you something I know will be far more valuable than just learning about another strategy. I want to give you a key update on what I call the "End of America."

When I talk about the "End of America," I don't mean the end of our political union (although I won't rule that out). I'm talking about the end of the U.S. dollar as the world's reserve currency. Most people think that's unlikely to occur. But it's already happening, and a complete collapse of the dollar is now inevitable.

This is the most important financial problem you will ever face. And I want you to know exactly how this crisis will unfold...

First, when you look at the numbers, you can see the problems we face will not be solved by any normal or legitimate means. How do I know this? Just consider this one fact: Even if federal tax revenue were doubled, we would still have an annual deficit.

I've got to be making that up, right? Surely that can't be true, right? It's true. Income tax receipts are roughly $900 billion a year. Corporate taxes are roughly $200 billion annually. That's $1.1 trillion in tax revenue. Our current government expenditure is $3.5 trillion. Even if you doubled tax revenue, we would still be facing a $1.4 trillion deficit.

"Wait a minute," you say. "How can that be? Doesn't the mainstream media report that our deficit is only around $1 trillion per year right now?" Yes, that's what they report. But that's because the government counts all $850 billion of payroll taxes (Medicare and Social Security) as current income. It's not. Those taxes are supposed to be funding the future liabilities of those programs, but we're spending all that money now. If a private corporation did the same thing, its executives would all go to jail.

... [W]hen the situation finally turns, it will happen suddenly. If our government suddenly finds itself unable to sell bonds at a reasonable price, the rule of law will evaporate overnight.

This will happen at some point. The only question is when. You don't have to believe me. Listen to what congressman Ron Paul said in an interview with our friends at Casey Research:

They are going to have currency controls and exchange controls and limit the amount of money you can take overseas... the description of a free country is one where you can leave with your money when you please. That is going to get harder and harder.

Yes, Ron Paul is a libertarian. But he has also been in Congress (off and on) since the 1970s, and he is now the chairman of the Joint Finance Committee. He knows more than almost anyone else about the true financial condition of the government. He is giving you a clear warning. What are you going to do about it?

Most people will do nothing. They will continue to assume tomorrow is likely to be pretty much the same. Sure, we might have some tough times... but this will pass. Nothing serious is going to happen.

If you feel this way, that's fine. But ask yourself these questions:

How high will gold have to get before you think something is seriously wrong?
How high will silver have to get?
How many banks will the FDIC have to close before you consider the dollar to be unsafe?
How many municipalities will have to go under before you think there's a crisis?
How European states will have to leave the euro before you begin to doubt the stability of the world's paper currencies?
How high will agriculture prices have to go before you see that a global food panic is underway?

I suggest you write down the answers to these questions now. Because almost no matter what you answered, you'll get to that point soon.

So how will it happen? That's what people keep asking me.

My answer is: The collapse of the global fiat money system is already under way.

Gold has gone up for 10 straight years. Gold is the counterbalance to fiat (paper) money. For 10 years in a row, investors around the world have been favoring gold. This trend is going to continue, and it will not stop until serious actions are taken to put a floor under the value of the world's major paper currencies: the euro, dollar, and yen. And that can't happen because the governments backing these three currencies are all bankrupt.

The euro will die first. Just look at the numbers...

Greece, Ireland, Spain, Portugal, and Italy have all made the same mistake. They responded to the collapse of real estate prices and debts by guaranteeing the private obligations of their banks with their country's treasury. (America is doing the same, by the way.) The problem is, the debts are vastly larger than the governments can afford to repay... far larger.

So for example, when Anglo Irish Bank failed, it announced it required $35 billion. That's equal to 25% of Ireland's GDP. And that's only one of Ireland's failed banks. Ireland will never be able to afford these obligations.

As a result, Germany, France, and the other euro nations have put together a bailout plan. All of the European treasuries will act to save any member state. Let's look at the numbers. Total debts owed to foreign investors in the so-called "PIIGS" countries are $2.6 trillion. The bailout package that's been assembled totals $1 trillion. That sounds pretty good... at first.

But Italy and Spain have pledged $130 billion to the bailout. Where will they get that money? Greece has pledged $12 billion. Ireland, $7 billion. Portugal, $11 billion. Only about half this money will ever be raised and almost all that can be raised will have to come from France and Germany. Sooner or later, the taxpayers in those countries will say "enough" and the whole thing will unravel.

It will happen suddenly. And very, very soon. Even if you pretend Europe can raise that size of a bailout fund, that figure simply isn't nearly large enough to bailout either Spain or Italy. And both are likely to suffer a default if either Greece or Ireland defaults.

That's why interest rates in Ireland and Greece are back to crisis levels, despite the bailout promise. That's why the euro continues to fall. And that's why shorting the euro is one of 2011's sure bets.

Crux Note: Porter recently released a video detailing exactly how to protect yourself from the "End of America." If you haven't seen it, be sure to click here now.

More from Porter Stansberry:

The bankruptcy of the United States is now certain

Porter Stansberry: A major financial crisis has begun

Porter Stansberry: These horrific predictions are now coming true