Without question the collapse of the dollar will be devastating to everyone, except those who have certified gold investments, of course.
Posted by Adam King on April 13, 2011
A stern warning to invest in certified gold.
April 13, 2011 – Without question the collapse of the dollar will be devastating to everyone, except those who have certified gold investments, of course. But that could never really happen, right? Wrong. In fact, we are heading full steam right towards that event. By all rights it should have happened already, except for a quirk in global economics.
When the dollar wrested the status of reserve currency from the British Sterling following WWII – ending the pound’s 200-year reign – it gained a unique advantage. Almost all global trade is denominated in dollars. That means other countries must somehow convert their currencies to dollars to buy on the global market, either through sales or conversion. In essence they must limit their consumption to what they are able to produce in exchange. Only the USA has been free to consume without that restriction, because only we can legally print dollars.
That was fine for a while, but our insatiable appetite for consumption meant that we had to keep printing ever greater quantities of dollars. We have been living beyond our means for so long that the time has come to pay the piper. As our irresponsible policy sends global commodity prices through the roof, the rest of the world is fighting back.
China and Russia have agreed to dump the dollar in their dealings. Arab oil producers are moving to a basket of currencies that will include their own local unified currency. And World Bank president Robert B. Zoellick has warned “the United States would be mistaken to take for granted the dollar’s place as the world’s predominant reserve currency.”
Even at home major corporations such as McDonald’s and Caterpillar are offering “dim-sum” bonds – instruments denominated in Chinese renminbi and not the dollar – as an easier means to raise capital.
Without the leverage of being the global reserve, the dollar will become virtually worthless. That is why major holders of US debt are surreptitiously unloading their holdings, using them for a global spending spree on anything and everything that looks like hard assets.
“It may be two years, you know, maybe a little less, maybe a little more,” Erskine Boyles, co- chair of President Barack Obama’s National Commission on Fiscal Responsibility, told the Senate Budget Committee. “The markets will absolutely devastate us.”
That’s the plain truth. And stern warning to protect ourselves with investments in certified gold before it happens.
Stewart Lawson
Senior Staff Writer – Certified Gold Exchange
Categories:
US Gold Market
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