A few weeks ago, I was sorting through some old files from early
in my career. I came across a newsletter promotion I received in
1985. The headline was eerily similar to those I still see today:
“Get Your Dollars Out of the USA Before Uncle Sam Gets Them Out
of You.” The copy that followed predicted an imminent collapse
in the value of the US dollar, along with hyperinflation. Of
course, neither of these things happened in 1985, nor in the next
31 years. Given this personal history, you can understand why I’m
more than a little skeptical when I read breathless pronouncements
of impending gloom and doom. Instead, I take a longer view. While
I also believe that a US economic catastrophe is inevitable for
reasons I’ll discuss in a moment, I don’t know when it will occur.
But it probably won’t be tomorrow, next week, or even next month.
Keeping this background in mind, about two years ago, I had a
consultation with a client who was heavily invested in the Iraqi
dinar. He’s hardly alone – hundreds of people who are heavily
invested in the dinar and other exotic currencies have contacted
me over the years. I call them “Dinarites.” They believe a “global
currency reset” is imminent, an event that will spell the end of
dollar domination and the “revaluation” of exotic currencies like
the dinar. My client was confident that the dinar he had purchased
would be worth many times his purchase price within a short period
of time. And even though his sole income source was a monthly Social
Security check, he wanted to create an international structure to
protect the immense wealth he was certain would soon be coming his
way. Indeed, the investing club he purchased dinar and other exotic
currencies through was marketing an offshore trust arrangement for
a cool $20,000 – about a year’s worth of Social Security payments
for my client. I spent most of my time in the consultation trying
to talk them out of spending the $20,000. After all, this sum
represented virtually every dollar of his savings that he hadn’t
already invested in exotic currencies. In doing so, I received an
education in what motivates Dinarites to buy exotic currencies.
The argument – or at least one strain of it – goes like this:
The G20 group – essentially, the world’s wealthy industrialized
nations – now recognizes that the fiat money system overseen by
central banks is unsustainable. Along with their respective central
banks, the G20 nations now have a secret agreement in force to
undertake a “global currency reset.” The reset will instantly
eliminate the US dollar’s status as a global reserve currency,
resulting in a catastrophic loss of value. No one knows the
date the reset will take place, just that it will at some point
in the future. Once the reset occurs, a basket of currencies
from commodity-producing countries will take the place of the
US dollar and become the reserve currency. The basket’s value
will be reinforced by the commodities produced by the countries
whose currencies are included in the bucket. And the value of
those currencies will soar, since they will be part of this new
system. Iraq has a weak currency. It also has huge oil reserves.
The idea is that the dinar would become part of that basket.
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Unfortunately, I have a hard time seeing it play out in that
way. Although it will happen (and is, in fact, already underway).
Now, it’s true that having reserve currency status is a big deal.
Because the terms of the 70-year-old Bretton Woods Agreement made
the US dollar the world’s reserve currency – at the time, as “good
as gold” – the US essentially sets global monetary policy. Foreign
banks, businesses, and governments have no choice but to hold
trillions of dollars to facilitate trading and settle debts.
According to the Bank of International Settlements – the central
bank for central banks – about 87% of foreign exchange deals
conducted around the world involve the dollar. Over 80% of
international trade finance is conducted in dollars as well.
Reserve currency status creates huge demand for dollars worldwide.
That’s a big advantage for the US, because it allows its government
to build up enormous budget deficits without eroding the value of
the dollar or raising interest rates. Indeed, over the last few
years, the dollar has been by far the strongest currency in the
world. Ending that system overnight via a global currency reset
would create a global crisis dwarfing the 2007–2009 financial
collapse. Think of it: Banks, pension funds, and individual
households holding trillions of dollars would suddenly find
their holdings nearly worthless. A global depression on an almost
unimaginable scale would begin, followed by revolutions in virtually
every country. Do you really think the leaders of the world’s
wealthiest nations would secretly conspire to launch an initiative
like this? I don’t think so. It’s also true that developing economies
like Iraq benefit from a weak currency. Prices of their exported
goods are more competitive on global markets than they would be
if the currency was strong. So what is the more likely scenario
for the reset? Understandably, plenty of countries don’t appreciate
being forced to use US dollars in international transactions, much
less hoard dollars to settle debts. Efforts are thus underway to
whittle away at the dollar’s effective monopoly on global trade and
finance. For instance, China has signed agreements calling for the
use of its currency, the yuan, in financial exchanges with numerous
major countries including Germany, Russia, and India. Japan and India
have signed a currency deal linking their currencies closer together.
Saudi Arabia and other oil-producing states in the Middle East plan
to end dollar-for-oil exchanges and instead settle deals with a basket
of non-US currencies and gold.
It will be years, perhaps decades, before these efforts come to full
fruition. In the meantime, I see no reason why the dollar won’t remain
“king of the hill.”
But there will eventually be a reckoning, because the US truly is bankrupt.
If Uncle Sam were a corporation, it would have been declared insolvent
decades ago. The General Accountability Office’s audited financial
statements show that the federal government has a net worth of negative
$18.2 trillion. (Yes, with a ‘t.’) These numbers are just the tip of
the iceberg of the federal government’s dismal fiscal condition. Using
figures provided by the Congressional Budget Office, Bloomberg has
calculated a “fiscal gap” amounting to an incredible $222 trillion.
The only reason the US can maintain debt on this scale is because of
the dollar’s reserve currency status. And when it’s finally lost, how
likely do you think it is Congress and the president will resist the
temptation to tap retirement accounts, bank savings, and anything else
they can get their hands on to pay the bills? Moving money into assets
that the politicians in your country can’t steal from you is the only
way to protect yourself. At home, that means stockpiling cash, gold,
food, and other tangible assets. It also means making investments outside
the US. An offshore bank account, international real estate, and precious
metals in a secure private vault are all good ways to begin. And while I’m
not predicting an imminent demise of the dollar, that’s not to say there
couldn’t be a better time to start making preparations.
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a joker in the deck...a borderless criminal entity in the Levant with
four hundred nukes threatening the entire planet with something called
'The samson Option' best described here by Canadian NTS...."
NTS posted...
I have long been against the b******* that we see in our controlled media
that I have rightfully now for years called the "Jew spew" media... With
the Jewish control over our governments, our media, and most corporations,
they are now almost in full control of our very lives, and it is therefore
essential that I and others in the "real" truth movement get out there to
show their evil at work....
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