Clearly we should take notice. If central banks are preparing for a major change in the value of the dollar, shouldn't we? The fact remains that the US dollar cannot and will not survive the ongoing abuse heaped upon it by government planners and federal officials. That not only means the gold price will rise, but that many, if not most currencies, will lose a significant amount of purchasing power. - Jeff Clark, Casey Research - in reference to that fact that eastern hemisphere Central Banks are loading up on gold and Bloomberg News is erroneously reporting China's involvement.If you are at all curious about what is going on globally in terms of gold, the article which is the source of the above quote is a must-read: LINK.
The reason why the above quote is important to this post is that it underlies a "tectonic" shift in the global financial landscape going on that is not really being reported by the U.S. media. The BRICS countries (Brazil, Russia, India, China, South Africa) LINK met for a summit in South Africa today. They kicked off the summit by pre-announcing two significant events: 1) a work-in-progress to establish a new development bank that would rival the World Bank/IMF; 2) Significantly, they signed a trade and currency deal in which the BRICS will conduct trade amongst themselves in their own respective currencies, altogether bypassing use of the U.S. dollar: LINK
While both events are significant, the latter is another nail in the dollar's coffin. I wrote about this power shift taking place in an article published by Seeking Alpha: BRICS Game-Changer
While an agreement which would establish the new development could not be formed, the BRICS did establish a $100 billion fund designed to address any financial crises that might occur in developing economies: LINK
I thought it was interesting that while Bloomberg News reported the inability to establish the new bank as a "failure," if you read that last link from an Indian newspaper, it would actually appear that the $100 billion fund that was established is a pre-cursor to eventually getting a new development bank formed in order to by-pass the U.S.-controlled World Bank and IMF.
The writing is on the wall for everyone to see: at some point within the next 3-5 years, most likely, China is going to assert its economic power by rolling out some kind of gold-backed currency that will be used to replace the dollar as the global trade reserve currency. They have been slowly chipping away at the dollar over the last several years, although no one in the west is paying attention. At some point I expect that the new gold-backed currency will also involve a significant upward revaluation of the price of gold. And that will be a game-changer for everyone, especially for those have gold in their possession and, even more so, for those who don't.
As friends and colleagues of mine know, the views I have taken on over the the last 10 years with regard to the U.S. economy, political/banking corruption, housing and precious metals have been accurate (not views unique to me, of course). In terms of my view on an eventual new currency/gold revaluation, I am 100% confident.