Saturday, October 23, 2010

Get Ready For The Demise Of The U.S. Dollar (eventually)

This is a must-watch video from the National Inflation Association.  For quite some time I have been offering up the view that China is going to eventually roll out a gold/silver-backed currency that will replace the dollar as the global reserve currency.  I think people must think that I'm nuts (maybe I am, to an extent lol).  But here's another analyst who sees it the same way as I:

Ultimately, I believe that once China has accumulated enough gold and silver, they will roll out a new currency backed by their bullion reserves.  At the same time, they will have to concomitantly revalue the price of gold and silver both upward by a substantial amount in order to give gold/silver the value that would back the representative paper currency issued against that bullion AND to imbue a great enough value to back the amount of currency that will have to be issued in order to create efficient "fungibility" for the size of the global economy. This is where those who are accumulating bullion now will put themselves in a superior wealth position relative to everyone who disbelieves the true nature of gold and silver (even though 90% of 5000 years of human history is the relevant data point to understand the wealth-nature of gold/silver).

I was in a meeting a couple weeks ago with a potential client and I offered up this view of the "end game."  He understands the need to start accumulating gold/silver and the value of also investing in mining stocks to make a "leveraged" play on the metals.  But he really didn't think the dollar would be displaced.  That right there is the psychological power and danger of patriotism.

"Dissent is the highest form of patriotism" - Thomas Jefferson

“Patriotism in its simplest, clearest and most indubitable signification is nothing else but a means of obtaining for the rulers their ambitions and covetous desires, and for the ruled the abdication of human dignity, reason, conscience, and a slavish enthrallment to those in power.” Leo Toystoy


  1. Dave, have you heard about anything about "There is plenty of Silver on the moon"?

    I chuckled when I read this from biz insider, I mean, yeah right.

  2. I suppose back in 1910 the typical Englishman would have refused to believe that the British Pound could ever be displaced as one of the world’s most respected currencies.

    I suspect the typical Roman would never have believed that the Denarius would ever lose its place as the coin of the realm.

    Currencies grow strong from careful money management by their governments, Currencies fall by mismanagement by governments or introduction of fiat, but gold and silver endure as wealth in spite of the best arguments to the contrary.

  3. The USA have already printed the Gold Dollar. It was going to be introduced February 2011 but I think circumstances have brought this forward until after the elections in November. You are wrong. The USA is going to default in the few weeks. China will miss the boat.

  4. Julia, is a joke. It's literally a cross between the NY Post and The Onion. The National Enquirer laughs at Clusterstock.

  5. Dave,
    I think you've heard about FOFOA. His blog is quite often linked.
    It's about so called Freegold. Exhaustive presentation not easy to digest for lay people. Do you have an opinion on that? His ideas are based on Another/FOA who posted very deep insights 10-13 years and some of their views were gigantic, some seem to be floawed. Jesse linkes him today and his actual post is Freegod/oil.
    There are so many potential alternatives:
    Gold standard
    God/Silver st.
    SDR w/out PM
    and of course the unique Freegold!

  6. Faithful follower of Inflation Nation for sometime..Spot on as always, and great Documentary videos as well.

  7. Dear Dave in Denver,

    How would this Chinese gold/silver backed reserve currency affect the dollar and daily life for the average American?


  8. Not sure Adam. But things will be very bad in this country. Economically and politically.

  9. Dave, it's like that EVERYWHERE. Fake news, mis-represented reporting, distortions, propaganda. It's a real problem. I once asked a seasoned TV journalist at BBC about which news sources are the more "trustworthy" ones. She answered by giving me a blank, depressed face, and claiming she can't really recommend any. I was so dumbfounded then. That was 2008. Then I came across a book called "Flat Earth News". Basically, skepticism and critical thinking is mandatory whenever you come across a piece of "news", wherever they're from.

  10. Yes. See George Orwell for the dynamic unfolding in this country. We're at the catastrophic precipice in this country at which you can not believe ANYTHING coming from the Government or Wall Street. And really the Banks are the Government.