| "TheEndofBarackObama?"
DearFellowAmerican,
Hello.MynameisPorterStansberry.
Fifteenyearsago,IfoundedStansberry&AssociatesInvestmentResearch.
Ithassincebecomethelargestfirmofitskindintheworld.
TodaywehavemorepaidsubscribersthanmanyofAmerica’smostpopularnewspapers,
includingBarron’sandInvestor’sBusinessDaily.
Wespecializeinfinancialresearch,andservehundredsofthousands
ofpaidsubscribersinmorethan120countries.
Youmayknowofourfirmbecauseoftheworkwedidoverthelastseveralyears–
helpinginvestorsavoidthebigdisastersassociatedwithWallStreet’scollapse.
WewarnedpeopletoavoidFannieMaeandFreddieMac,LehmanBrothers,
GeneralMotorsanddozensofothercompaniesthathavesincecollapsed.
Weevenhelpedoursubscribersfindopportunitiestoprofitfromthesemoves
byshortingstocksandbuyingputoptions.
Tomyknowledge,nootherresearchfirm
intheworldcanmatchourrecordofcorrectlypredicting
thecatastrophethatoccurredin2008,andthereboundthathasoccurredsincethen.
Thevideopresentationwecreatedfouryearsago,toexplainthefinancialcrisis,
andourthoughtsonwhatwouldhappennext,hasbecomethemost-watched
on-linefinancialvideoinhistory,asfaraswecantell.
Butthat’snotwhyIcreatedthisfollow-uppresentation.
IreferenceoursuccessandexperiencewithWallStreet’slatestcrisisbecausewebelieve
thereisanevenbiggercrisislurking–somethingthatwillshaketheveryfoundationofAmerica.
Andwebelieveitwillaccelerateatanextremelyrapidpace,beginningin2014,
becauseofadevastatingnewlawthatjustwentintoeffectthissummer.
Veryshortly,I’llexplainmoreaboutexactlywhatthisnewlawdoesand
whyitcouldbeharmfultoeverysingleAmerican.
Iknowthattomostpeople,thesituationseemstobegettingbetterinAmerica.
Stockshaverecoveredalltheirlosses.Realestatehasrebounded.
Unemploymentandbankruptcieshavedropped.Buthere’sthething:
Theunfortunaterealityisthatweareactuallyinamuchmoredangerous
andprecariousplacetodaythanweweresixyearsago.
AndthatiswhyI’vespentasignificantamountoftimeandmoneyin
thepastfewmonthspreparingthispresentation.
Inshort,Iwanttotalkaboutaspecificevent
thatwilltakeplaceinAmerica’sverynearfuture…
whichcouldactuallybringourcountryandourwayoflifetoagrindinghault.
AsI’llexplaininamoment,thelaw
thatjustwentintoeffectcoulddramaticallyacceleratethisprocess.
Thisloomingcrisisisrelatedtothefinancialcrisisof2008…
butitisinfinitelymoredangerous,asI’llexplaininthisletter.
Asthisproblemcomestoahead,Iexpecttherewillbe
anear-completeshut-downoftheAmericaneconomy.
Lifeaswehaveknownitformorethan40yearswillessentiallyceasetoexist.
OurgovernmentsonboththeFederalandStatelevelwillshutdown.
Bankswillnotopen.
Businesseswillatleasttemporarilyshuttertheirdoors.
Iexpectwe’llseemartiallaw,enforcedbytheU.S.military.
Believeme,Idon’tmakethispredictionlightly
andIhavenointerestintryingtoscareyou.
| I’msimplyfollowingmyresearchtoitslogicalconclusion. |
IdidthesamewhenItrackedFannieMaeandFreddieMac’saccounting.
AlsowithGeneralMotors,LehmanBrothersandtherest.
AndwhenIbegangivingthiswarningin2006
noonetookmeveryseriously…notatfirst.
Backthen,mostmainstreamcommentatorsjustignoredme.
AndwhenIpresentedmycaseandexposed
thefactsateconomicconferences,theygotangry.
Theycouldn’trefutemyresearch…
buttheyweren’treadytoaccepttheenormityofitsconclusionseither.
That’swhy,beforeIgoanyfurther,Ihavetowarnyou…
WhatIamgoingtosayiscontroversial.
Itwilloffendmanypeople…Democrats,Republicans,
andTeaPartiers,alike.
Infact,I’vealreadyreceiveddozensofpiecesofhatemail.
And…theideasandsolutionsI’mgoingtopresentmight
seemsomewhatradicaltoyouatfirst…perhapseven"un-American."
Myguessisthat,asyoureadthisletter…you’llsay:
"There’snowaythiscouldreallyhappen…nothere."
Butjustremember:
NoonebelievedmefouryearsagowhenIsaid
theworld’slargestmortgagebankers
-FannieMaeandFreddieMac-wouldsoongobankrupt.
AndnoonebelievedmewhenIsaidGMwouldsoonbebankruptaswell…
orthatthesamewouldhappentoGeneralGrowthProperties
(thebiggestownerofmallpropertyinAmerica).
Butagain,that’sexactlywhathappened.
Noonebelievedmein2011whenIsaidthecrisiswouldcause"riotsinthestreets."
ThencametheprotestsinWisconsin,
andtheOccupyWallStreetmovementalloverthecountry.
Andthatbringsustotoday…
ThesamefinancialproblemsI’vebeentrackingfrombanktobank
andfromcompanytocompanyfor
thelastsixyearshavenowfoundtheirwayintotheU.S.Treasury.
I’llexplainhowthiscametobe.
WhatitmeansiscriticallyimportanttoyouandeveryAmerican…
Thenextphaseinthiscrisiswillthreatenourverywayoflife.
Thesavingsofmillionswillbewipedout.
Thisdisasterwillchangeyourbusinessandyourwork.
Itwilldramaticallyaffectyoursavingsaccounts,investments,andretirement.
Itwillchangeeverythingaboutyournormalwayoflife:whereyouvacation…
whereyousendyourkidsorgrandkidstoschool…
howandwhereyoushop…thewayyouprotectyourfamilyandhome.
I’llexplainhowIknowtheseeventsareabouttohappen.
YoucandecideforyourselfifI’mfullofhotair.
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Asforme,I’mmorecertainaboutthisloomingcrisisthanI’vebeen
aboutanythingelseinmylife.
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Iamliterallyafraidformyfamily’sfuture,
andIhavetakendrasticstepstoprepareforwhatIknowmustinevitablyhappennext.
Iknowthatdebtsdon’tjustdisappear.Iknowthatbailoutshavebigconsequences.
And,unlikemostofthepunditsonTV,Iknowalotaboutfinanceandaccounting.
Andthisisallcomingtoaheadmuch,muchsoonerthanmostAmericansthink.
Ofcourse,themostimportantpartofthissituationisnotwhatishappening…
butratherwhatyoucandoaboutit.
Inotherwords…Willyoubepreparedwhenthebiggestfinancialcrisis
inAmericainmorethan50years,hits?
Don’tworry,I’mnotorganizingarallyordemonstration.
AndI’veturneddowneveryrequesttorunforpoliticaloffice.
Instead,IwanttoshowyouexactlywhatI’mdoingpersonally,toprotectmyfamily,
andtoprotectandperhapsevengrowmymoney,andhowyoucanprepareaswell.
Yousee,Icantellyouwithnear100%certaintythatmostAmericanswillnotknow
whattodowhencommodityprices–thingslikemilk,breadandgasoline–soar.
Theywon’tknowwhattodowhenbanksclose…andtheircreditcardsstopworking.
Orwhenthey’renotallowedtobuygoldorforeigncurrencies.
Orwhenfoodstampsfail…ortheirSocialSecuritycheckscometoahalt.
Inshort,ourwayoflifeinAmericaisabouttochange–Ipromiseyou.
InthisletterI’llshowyouexactlywhatishappening,andwhyitisinevitable.
Again,youcanchallengeeverysingleoneofmyfactsandyou’llfind
thatI’mrightabouteachallegationImake.
Then,Ihopeyou’lltakeactionforyourself.
Willyouactnowtoprotectyourselfandyourfamilyfrom
thecatastrophethat’sbrewingrightnowinWashingtonD.C.?
Ihopeso.Andthat’swhyIwrotethisletter.
I’mgoingtowalkyouthroughexactly
whatIamdoingpersonally,andwhatyoucandoaswell.
Ican’tpromiseyou’llemergefromthiscrisiscompletelyunharmed–
butIguaranteeyou’llbealotbetteroffthanpeople
whodon’tfollowthesesimplesteps.
ButI’mgettingaheadofmyselfjustabit.
Letmebackupandshowyouinthesimplesttermspossiblewhatisgoingon,
whyIamsoconcerned,whatIbelievewillhappeninthenext12months,
andexactlywhatisgoingtohappen
whenthisdevastatingnewlawtakeseffect,laterthisyear…
TheGreatestDangerAmericaHasEverFaced?
IbelievethatweasAmericansareabouttoseeamajor,
majorcollapseinournationalmonetarysystem,andournormalwayoflife.
Basically,formanyyearsnow,
ourgovernmenthasbeenborrowingsomuchmoney
(veryoftenusingshort-termloans),thatverysoon,
wewillnolongerbeabletoaffordeventheinterestontheseloans.
Again…Isaythesethingsasanexpertinaccountingandfinancialresearch.
YoumaynotthinkthingsareTHATBADintheU.S.economy,or
thatourgovernmentspendingisnot"thatbad,"
andIdon’twanttooverwhelmyouwithnumbers,butconsiderjustonesimplefact…
Everysinglehour,ofeverysingleday,theU.S.governmentspends
about$200millionthatitdoesn’thave.
Yes,that’severyhourofeverysingleday…24hoursaday,sevendaysaweek,
includingSundays,Christmas,Thanksgiving,Easter,andeveryotherholiday.
Forapointofreference,considerthatinjusttwomonths,
thegovernmentborrowsmoremoneythanthecombinedannualprofitsof
the100biggestpubliclytradedcompaniesinAmerica.
That’sabsolutelyincredible,isn’tit?
Again,everyhourofeverysingleday,
wearespending$200millionwedon’thave.
Doesthatsoundsustainabletoyou?
Yet,you’llrarelyseethisfactreportedanywhereelse.
LikeIsaidearlier:Youcanchallengeeverysingleoneofmyfacts
andyou’llfindthatI’mrightabouteachallegationImake.
Beforeyoudothat,however,Irecommendyoutakealookatjustonesimplechart…
Thiswilltellyouallyouneedtoknowaboutthelikelihoodof
massivechangesintheverynearfuture.
Thiswilltellyouwhetherornotthingsarereally"normal"inAmericatoday.
ThechartI’mabouttoshowyoushowsyouthesimple,nominal,increase
inthesizeoftheUnitedStates’centralbank’sbalancesheet.
I’mtalking,ofcourse,abouttheFederalReserve,
whichcontrolsthemoneysupplyinAmerica.
Thischartshowsthatwhathastakenplaceissomethingstraightoutof
WeimarGermany…orthelast20yearsinZimbabwe.
Thiskindofgross,out-of-controlexperimentwithourmoneyhasneverhappenedbefore.
Noonecanpredicttheexactoutcome.Notme.Notanyoneelse.
Butitsureashellisn’t"normal."Andit’ssuretobeadisaster.
Here’sthechartIwanttoshowyou.
Normally,IstudythesekindsofnumberswhenI’mlookingatabusiness
toinvestinortorecommendtomyreaders.
ButlatelyI’vespentmostofmytimelookingintoournationalbalancesheet,
becauseasthebankingsystemcollapsedin2008…
allofthebaddebtswereabsorbedbytheworld’sgovernments.
Anditcontinuestothisday.
Webegantheyear2014withanetpublicdebtthathasmorethandoubledsince
theyearBEFOREBarackObamatookoffice.
Theseoverwhelmingpublicfinancialobligationsarecompletelyunprecedentedin
thehistoryofourcountry,
outsideofthetwomajorglobalwarswefoughtinthe20thcentury.
Buteventheseincrediblefiguresdon’ttelltherealstory.Orevenhalfofit.
Variousothergovernmentagenciesandprivatecompaniestakenoverby
thegovernmentalsohaveobligationsofnearlyanother$5trillion.
We’vealreadybookedcompletelosseson$140billionworthoftheseobligations.
Yettheyremaincompletelyoffthefederalbalancesheet.
Whenyouaddtheseother,genuine,federalobligationsthatexistrightnow,t
oday,youcomeupwithatotaldebtfigurethat’smuchmorethan$20trillion.
FarmorethanhalfofthesedebtswereassumedunderPresidentObama.
Wedon’tknowwhatthefullburden
ofthesenewandexistingdebtswillbeintotal,overtime.
That’sbecausetheFederalReservespowerto
manipulateinterestratesisunlimited—atleastfornowthat’sthecase.
Wedon’tknowhowmuchofFannie’sandFreddie’sbaddebts
willeventuallybecoveredbytheU.S.Treasury.
(Wedoknowtheyhaveanunlimitedlineofcredit…
soit’sasafebetthatwehaven’tseenthelastofthesecharges.)
Finally,wehavenoideawhattheeventualcostsof
theFederalReserve’songoingexpansion
ofthemonetarybasewillbeoverthelongterm.
Thereisonethingthat’scertain,however:
thesedebtswillnotbefree.Theywillcarryaburden.
Today,wehavemoregovernmentdebtthananycountryinthehistoryoftheworld.
WehavemoredebtthaneverycountryintheEuropeanUnion…combined.
Witheachadditionalcommitmentwesinkfurtherandfurtherintodebt…closinginupon
themomentthatwecansimplynolongeraffordeventheinterestpaymentsonourobligations.
Andhereisthepartthatreallymatters…
thecostsofmaintainingourdebtsareabouttoskyrocket.
RightnowtheFederalReserveismanipulatinginterestratesdowntoalmostzero.
Asaresult,theinterestrateatwhichourgovernmentcanborrowmoneyisatarecordlowlevel.
Infact,theFederalReservehaslowereditsbenchmarkinterestratetentimessinceAugust2007,
from5.25%toazonebetweenzeroand0.25%.Obviously,thecurrentratewon’tlastforever.
Butwhatwillhappeniftheaveragerealinterestrateendsupbeingjust4%annually,
andwepayitoffover30yearslikeamortgage?
Incredibly,we’llspend$34.3trilliontosimplyrepaywhatweowerightnow.
Iftherateendsupbeing6%,we’llspend$43.1trillion.
Now,ofcourse,ourpoliticiansbelievethatthroughpolicyandcurrencymanipulation,
theycansimplyavoidpayinganyofthesecosts.
TheycanordertheFederalReservetopreventinterestratesfromeverrising
toalevelthatwouldcosttheAmericanpeopleanything.
Theybelievetheycanmanagetheeconomy,
sothedebtsofFannieandFreddiewon’tgobad.
Theybelieve(withoutanyproofwhatsoever)thattheycanstimulatetheeconomy
byevenmoredeficitspending,sothatitgrowsfaster,
allowingtaxrevenuestoproduceasurplus.
Repayingthesedebts,theysay,willbeeasyandpainless.
Butyouknowbetter,myfriend.Youmustknowbetter.
Thewagesofsinmustbepaid.Andtheywillbepaid.
Justconsidertheplansofthosewhoargueotherwise…
PaulKrugman,oneofthemostwidelyreadandrespected"economists"inthecountrywroteabout
thisincrediblynaïveandridiculoussolutioninaJanuary7th,2013NewYorkTimescolumn.Hesaid:
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"There’salegalloopholeallowingtheTreasurytomintplatinumcoinsinanydenomination
thesecretarychooses.Yes,itwasintendedtoallowcommemorativecollector’sitems–
butthat’snotwhattheletterofthelawsays.
Andbymintinga$1trillioncoin,thendepositingitattheFed,theTreasurycouldacquireenoughcashtosidestepthedebtceiling–whiledoingnoeconomicharmatall."
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Veryfewpeople,evenourmostinfluentialeconomists,seemtoremember
thattheutilityofmoneyandcreditarebasedupontheirsoundness.
Moneyallowspeopletoexchangegoodsandserviceswidely,
greatlyincreasingthespecializationoflaborandfacilitating
theeconomicmagicofcompetitiveadvantage.
Moneyalsoplaysthecriticalfunctionoffacilitatingcommunicationsbetween
andamongmanydisparateactors.Pricechangesguideproducersandconsumers.
But…whenthemoneycan’tbetrusted…thisentiresystembreaksdown.
Thepricesignalscan’tbereliedupon.Anditbecomesharder
andharderforpeopletoexchangelaborandcapital.
Likewise,creditenablesaneconomytogrowbyfacilitating
thegrowthofsavingsandcapitalinvestmentthroughrealinterestrates.
Butveryfewpeoplearewillingtodelayconsumptionandtrusttheirsavingsinaneconomy
thatrefusestopaysaversanyreturnaboveinflationfortheirsavings.
Andthat’sexactlywherewearetoday.
AlthoughtomostAmericanseverythingseemscalm…
andthatweareenjoyinganeconomicrecovery,Icanpromiseyouthis:
Wearetrapped.Thereisnowayout.
AndnobodyinWashington–notRepublicans,notDemocrats,andnoteven
TeaPartiers–wantyoutorealizehowprecariousourgovernment’sfinancesreallyare.
Theycan’taffordforyoutounderstandthisdilemma…orwhatitmeans.
Becausehere’sthething…
Andthisisthebigsecretthegovernmenthopesyouneverunderstand…
Accordingtoevenmymostconservativecalculations(again,usingnumbersprovidedby
theCongressionalBudgetOffice)adebtdefaultbytheU.S.governmentwouldbeinevitable–
wereitnotforonesimpleanomaly…theonethingthathassavedtheUnitedStatessofar.
I’mtalkingaboutourcountry’suniqueabilitytosimplyprintmoremoney.
Yousee,theU.S.governmenthasoneveryimportantweapon
touseinthiscrisissofar:
WearetheonlydebtorintheworldthatcanlegallyprintU.S.dollars.
AndtheU.S.dollariswhat’sknownas"theworld’sreservecurrency."
Thedollarformsthebasisoftheworld’sfinancialsystem.
Itiswhatbanksaroundtheworldholdinreserveagainsttheirloans.
Again,that’sasecretmostpoliticiansdon’tunderstand:
Asthingsstandnow,theU.S.governmentcan’tgobrokeinanyordinarysenseof
thewordbecauseitcansimplyprintdollarstopayforitsbaddebts.
(It’sbeendoingsosinceMarchof2009.)
Thatmightsoundprettygoodatfirst.
Sincewecanalwaysjustprintmoremoney,
whatistheretoworryabout…?
Well,letmeshowyou…
WhyOurBiggestAdvantage
IsAbouttoDisappear
Yousee,asthingsstandtoday,Americaistheonlycountry
intheworldthatdoesn’thavetopayforitsimportsinaforeigncurrency.
Here’swhatImean…
Let’ssayyou’reaGermanandyouwanttobuyoilfromSaudiArabia.
Youcan’tjustpayforyouroilinGermanmarks(oreuros),
becausetheoilispricedindollars.
Soyouhavetobuydollarsfirst,thenbuyyouroil.
AndthatmeansthevalueoftheGermancurrencyis
ofgreatimportancetotheGermangovernment.
Tomaintainthevalueofitscurrency,Germansmustproduceatleastasmuchas
theyconsumefromaroundtheworld…
otherwisethevalueofitscurrencywillbegintofall,
causingpricestoriseanditsstandardoflivingtodecline.
ButinAmerica…?
We’vebeenabletoconsumeasmuchaswewantwithoutworryingaboutacquiring
themoneytopayforit,becauseourdollarsareacceptedeverywherearoundtheworld.
Inshort,fordecadesnow,wehaven’thadtoproduceanythingorexportanythingtogetall
thedollarsweneededtobuyalltheoil(andothergoods)ourcountryrequired.
Allwehadtodowasborrowandprintmoremoney.
Andboydidwe.Takealookatthischart…
Evenaslateasthe1970s,Americawastheworld’slargestcreditor.
Butbythemid-1980swe’dbecomeadebtortotheworld.
Andsincethelate1990swe’vebeentheworld’sLARGESTdebtor.
Today,ourgovernmentowesmoremoneytomorepeoplethananyoneelseintheworld.
Withallofthesebaddebtspilingup,we’vehadtobeginrepayingourdebts
byprintingtrillionsofnewdollars.
WithQE3,thelatestroundof"quantitativeeasing,"theFedisprinting$65billionamonth.
That’snearlyatrilliondollarsayear.
Andnow,finally,theimpactofthisisbeingfeltinabigway.
Asourcreditorsfigureoutwhat’shappening,
wearebeginningtohavevery,verybigproblems.
Ibelieveourcreditors(whichincludeforeigncountriesandotherinvestorshereandabroad)
willeithercompletelystopacceptingdollarsinrepayment…
orgreatlydiscountthevalueofthesenewdollars.
I’msureyouthinkthatsoundscrazy,butasI’llshowyou,itisalreadyhappening.
Infact,ZhaXiaogang,aresearcherattheShanghaiInstitutesforInternationalStudies,recentlysaid:
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Theshortcomingsofthecurrentinternationalmonetarysystempose
abigthreattoChina’seconomy."
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That’swhyChinaisnowactivelytakingstepstophaseouttheU.S.dollar
becauseofitsfrustrationwiththeU.S.government’smismanagementofourcurrency.
Andhowdoesourgovernmentrespond?
WehavetheaudacitytolabelChinaa"currencymanipulator!"
Doyouseetheironyhere?
Asaresultofwhatourgovernmentisdoingtoday,
I’mconfidentwewillsoonseeanendoftheU.S.dollarstandard.
Infact,I’m100%sureofit.It’snotamatterof"if,"but"when."
AndIthinkit’sgoingtohappenmuch,
muchsoonerthanmostpeoplethink.
Infact,Ibelievethattheseriesofnewlawsthatwentintoeffect
onJuly1,2014,aregoingtoacceleratethistrend…inverydramaticfashion.
Evenmoreimportantly,thesenewregulationswillmakeitnearlyimpossibleformostAmericans
tolegallyprotecttheirsavings…soit’simperativethatyougetthefacts,learnwhatyoucando,
andtakeactionbeforethatdate.AndI’mgoingtogettoallofthatinjustaminute.
Ofcourse,I’mnottheonlyonetalkingabouttheU.S.dollarlosingitsreservecurrencystatus.
EvensomemainstreampublicationsliketheNewYorkPostarerecognizingtheinevitabilityofthisevent.ThePostrecentlyreportedthat,"TheUSdollarisgettingperilouslyclose
tolosingitsstatusastheworld’sreservecurrency.
Shoulditcrosstheline,the2008financialcrisiscouldlooklikeasummerstorm."
AndbillionaireRayDalioofBridgewaterAssociates,thelargestandbest-performinghedgefund
intheworld,toldCNBCthatitis"inevitablethatthedollar’sroleastheworld’scurrency
willdiminishfromthedominantworldcurrencytooneofafew."
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"Itwillfadeprobablyfairlyquickly,sotheUnitedStates,whichaccountsforalmost
two-thirdsofthereserveswillprobablygodownto50percentoftheworld’sreserves."
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Keepinmind,theU.S.dollarhasbeentheworld’sreservecurrencyfordecadesnow…
somostAmericansdon’thaveaclueaboutwhattherepercussionsareoflosingthisstatus.
Andmaybeyouthinkitcouldneverhappen…butthetruthis,thisisexactlywhathappens
whencountriesgettoofarindebtorwhentheyconsumetoomuchorproducetoolittle.
Infact,thesamethinghappenedtoGreatBritaininthe1970s.
FirstBritain…NowAmerica
Mostpeopledon’tknowthis,butBritain’ssterlingwasthereservecurrencyformost
oftheworldfornearly200years…formostofthe18thand19thcenturies.
ItcontinuedtoplaythisroleuntilafterWorldWarII,whenAmericawasforcedtopropup
Britain’seconomywithforeignaid–rememberthefamousMarshallPlan,
whenwegavebillionstohelpEuropeancountriesrebuild?
Unfortunatelythough,Britainpursuedasocialistnationalagenda.
Thegovernmenttookoverallofthemajorindustries.
LikeBarackObama,Britain’sleaderswantedto"spreadthewealtharound."
Prettysoonthecountrywasflatbroke.
ThefinalstrawforBritaincamein1967,
whenthingsgotsobadtheLabourParty(thesocialists)decidedto
"devalue"theBritishcurrencyby14%,overnight.
Theybelievedthiswouldmakeiteasierforpeopletoaffordtheirdebts.
Inreality,whatitdidwasmakeanyoneholdingBritishsterling14%poorer,overnight,
anditmadeeverythinginBritain,much,muchmoreexpensiveinthecomingyears.
Andforthecountryasawhole,itusheredinone
oftheworstdecadesinmodernBritishhistory.
MostAmericansdon’tknowaboutBritain’s"WinterofDiscontent"inthelate1970s,
whenthegovernmentputafreezeonwages.
Therewerecontinuousstrikesinnearlyeverysector…
gravediggers,trashcollectors…evenhospitalworkers.
Thingsgotsobadatonepointthatmanyhospitals
werereducedtoacceptingonlyemergencypatients.
Andmothersgivingbirthhadtobringtheirownlinens.
In1975,inflationinBritainskyrocketed26.9%…inasingleyear!
Thegovernmentalsoimposedwhatwasknownasthe"ThreeDayWeek"in1974.
Inshort,businesseswerelimitedtousingelectricityforonlythreespecifiedconsecutivedays’
eachweekandtheywereprohibitedfromworkinglongerhoursonthosedays.
Televisioncompanieswererequiredtoceasebroadcastingat10:30pm…tosaveelectricity.
Justhowbadwerethings,exactly?
Well,here’saphotoofthegarbagethatpiledupbecause
theydidn’thaveenoughmoneytopaytrashcollectorsafairwage…
Imagine…Britainwasaglobalsuperpowerfor150years.
Butwhentheystartedintentionallydevaluingtheircurrency,thingswentstraightdownhill.
It’snowobviouslyclearthatthesamethingthathappenedtoBritain’ssterling
whenitwastheworld’sreservecurrency,isnowhappeningtotheU.S.dollar.
Infact,theexchangevalueoftheU.S.dollarhasfallennearly20%sincemid-2003,
accordingtodatafromtheFederalReserveitself.
AstheU.S.dollarcontinuestoloseitspositionastheworld’scurrency,
gas,oil,andothercommoditieswillcontinuetoskyrocket.
AlmostEVERYTHINGweconsumewillgetdramaticallymoreexpensive.
Alltheclothing,furniture,andhouseholdgoodsweimportfromChina.
AllthefoodwegetfromCentralandSouthAmerica…alltheelectronics,televisions,
computers,andcarswegetfromAsiaandEurope.Andwhenyoulookbackover
thepastfewyears,thenumbersarestartling…
Thechartbelowshowshowmuchafewkeycommoditieshaveskyrocketedinprice,
justsincethebeginningof2009…
Andthepointhereissimple…Asweprintmoremoney,thepriceoftheworld’s
mostessentialcommoditieshavesoared.ThisisNOTacoincidence.
Aroundtheworld,asweprint,pricessoar…citizensprotest…governmentsgetoverthrown.
Andit’sonlygoingtogetworse…
Becausehere’stheimportantfactyousimplymustunderstandabouttheUnitedStatesrightnow:
OurgovernmentcanNOTstopprintingmoneybecausethereisnopossibleway
forustoactuallyaffordourexistingdebts.Noonewantsyoutoknowthis.Noone.
That’swhy,despitetheobviousinflationgoingonallaroundtheworld,
theFedcontinuestosaythere’snoinflationatall.
Andthat’sthescarypart,tome.
JustlikeinaThirdWorldcountry,thegovernmentisradicallydevaluing
thedollarandsimplylyingtoeveryoneaboutwhatisreallyhappening.
Whetheryourealizeitornot,thereisalreadya"run"onthedollar.
Manyofourcreditors,liketheChinese,aregettingoutofthedollar
asfastastheycanviastrategiccommodities,likecopper,gold,andoil.
That’spartlywhycommoditypricesaresoaring.
Unfortunately,skyrocketingcommoditypricesarejustthebeginning.
Thereareotherdisastrousconsequences
totheU.S.dollarlosingstatusastheworld’scurrency…
Forexample,asdemandforU.S.dollarsaround
theglobedecreases,interestrateswillskyrocket.
Insteadofgettingamortgageattoday’sincrediblylowratesofaround3%,
itmightcostyou8%…oreven10%…or15%.
Imaginewhatthatwoulddotohousingprices!
Stockpricescouldplummetbyatleast40%inamatterofweeks.
Butbelieveme,it’sgoingtogetmuch,muchworsefromhere.
Asinvestmentbankerandbest-sellingauthorJamesRickardswrites
inhisnewbookCurrencyWars:
"Ifthecurrencycollapses,everythingelsegoeswithit…stocks,bonds,commodities,
derivativesandotherinvestmentsareallpricedinanation’scurrency.
Ifyoudestroythecurrency,youdestroyallmarketsandthenation."
That’stheharshrealitywearefacing.
Andit’swhatnopoliticianwillevertellyou.
What’shappenedoverthepastfewyearsisthatinvestors
arefinallywisinguptothemessthatwearein.
ThisiswhycountrieslikeGermany,
aretakingavastamountoftheirgoldstoredaroundtheworld,
andbringingitbackhome.
Theyareworried.Andtheyhaveeveryrighttobe.
Inthefinancialworld,theyrefertothisas"capitalflight."Andwhatitmeansis,whenpeoplefigure
outthattheirsavingsinU.S.dollarsareinjeopardy,theylookforbetterandsaferalternatives.
Andthereallyscarythingtomeis,theU.S.governmentistryingtomakeprotectingyourselfall
butimpossible,withthenewrulesthatjustwentintoeffectonJuly1st.
I’llgettothespecificsinjustaminute.
Thisiswhygoldpriceswentupfor12straightyearsbeforefinallytakingabreakin2013.
Theybeganskyrocketingagainatthestartof2014.
It’shappeningbecausepeoplewanttoprotecttheirsavings.
Asfarasweareaware,nootherassethasevergoneupfor12straightyears,
inthehistoryofournation.
ThisiswhytrulyoutlandishideaslikeBitcoinandother"cryptocurrencies"
arenowmakingthecoverofmainstreammagazineslikeTime
andBloombergBusinessWeek.
Peoplearegettingtrulydesperatetoprotecttheirsavings.
Butremember,wearenotthefirsttogothroughthis…
WhenGermansrealizedtheircurrencywasbeingdestroyedinthe1920s,
theygottheirmoneyintoSwissfrancsandgoldasquicklyaspossible.
WhenArgentineansrealizedtheircurrencywasbeingdestroyedinrecentyears,
theydidthesame—bymovingmoneyasquicklyandasquietlyaspossible
intoasafercurrencyandinto"hardassets"likelandandpreciousmetals.
Andit’sthesamewiththeU.S.dollarrightnow.
Asitcontinuestoloseitspositionastheworld’sreservecurrency,
itwillcauseabrutaldownturninoureconomy,
whichwillbeabout10-timesworsethanthemortgagecrisisof2008.Remember,
webailedourselvesoutofthelastcrisis
bysimplyprintingtrillionsandtrillionsofnewdollars.
Inacurrencycrisis,that’snotpossible.
Printingmoneyonlymakesthesituationworse.
Again,I’mnottheonlyonesayingthis…
AsBarron’sreported…
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"ThedemandfordollarsfromtherestoftheworldhasbeenofinestimablebenefittotheU.S.economy.ItquitesimplyallowsAmericanstoconsumemorethantheyproduce
andsavelessthantheyinvest;inotherwords,tolivebeyondourmeans."
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AndlistentowhatSamZell,oneoftherichestpeopleinAmericaaccording
toForbesmagazine,saidonarareinterviewwithCNBC.
Zellsaid:
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"Mysinglebiggestfinancialconcernisthelossofthedollarasthereservecurrency.
Ican’timagineanythingmoredisastroustoourcountry.
I’mhopingagainsthopethatain’tgonnahappen,butyou’realreadyseeingthings
inthemarketsthataresuggestingthatconfidenceinthedollariswaning.
Ithinkyoucouldseea25%reductioninthestandardoflivinginthiscountryif
theU.S.dollarwasnolongertheworld’sreservecurrency.That’showvaluableitis."
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Yousee,whatwillalsohappenasaresultofthisloomingcurrencycrisis,
andtheendoftheU.S.dollarastheworld’sreservecurrency,
isamassiveinflationinAmerica,thelikesofwhichwehaveneverseenbefore.
WheneveryoneistryingtogetridoftheirU.S.dollars
andourfederalgovernmentjustcontinuesprintingmore,
thiscrisiswillreachepicproportions.
Remember,weasAmericansarenotimmunetothebasiclawsofeconomicsandfinance.
Overthepast100years,manyothergovernmentshavetriedtodo
whatourgovernmentisdoingtoday…thatis,printingmoneytopayforinsurmountabledebts.
Andinthepast100years,thistypeofinflationanddebtcrisishasreareditsuglyheadinGermany,
Russia,Austria,Argentina,Brazil,Chile,Poland,theUkraine,Japan,andChina,justtonameafew.
Greeceisfallingapart.Italy,Ireland,PortugalandSpainareallintrouble.
AndnowthesameprocessiswellunderwayintheUnitedStates.
AsBillGross,founder,managingdirectorandco-CIOofPIMCOwroterecently:
"Thefuturepricetagofprintingsixtrilliondollarsworthofcheckscomes
intheformofinflationanddevaluationofcurrencies…"
AndGeorgeMelloanoftheWallStreetJournalechoedthesesentimentswhenhesaid:
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"Indeed,itisunlikelythatAmericansthemselveswillescapetheinflationary
consequencesofcurrentFedpolicy….TheFedisfinancingavastandrisingfederaldeficit,
followingapracticethathasbeenasurefireprescription
fordomesticinflationfromtimeimmemorial."
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It’spainfullyclearthatwehaveamajor,majorproblemonourhands.
Perhapswecouldrighttheshipifwecoulddrasticallyreducecostsandcutspending.
Butthat’stheEXACTOPPOSITEofwhatourpoliticiansaredoingtoday.
Butourpoliticalleadersarenowonarunaway,suicidecourse.
They’vecometobelievethatnarrowingthetaxbaseandprintingbillions
andbillionsofdollarsistheformulaforprosperity.
Ithasneverworked,EVER,inhumanhistory,anditwillneverworknow.
LikeIsaid,thesetheorieshaveallbeentried
inmanyotherplacesaroundtheworld–Zimbabwe,
Argentina,GermanyafterWorldWarI…andtheyneverwork.
Nonationinhistoryeverbecamewealthierbygoingdeeplyintodebt
andthenprintingthemoneyrequiredtorepaytheloans.
Anddespitewhatnearlyallpoliticiansseemtothink…
andwhatmanypop-culture"economists"
appeartobelieve,I100%GUARANTEEitwillnotworkhere,either.
Unfortunately,thesuccesstheFedhasenjoyed(sofar)inexpandingthemonetarybase
andmanipulatingtheTreasurybondmarkethasgreatlyemboldenedourpoliticians.
Butwhenyoutakeacloserlook,yourealizethateverything
onthefederalandstatelevelisacompleteandabsolutemess,
becauseourgovernmenthasbeenlivingwaybeyonditsmeansforsolong…
IsYourStateasBrokeasThesePlaces?
DidyouknowthataccordingtotheCenteronBudgetandPolicyPriorities,aWashington,D.C.
-basedthink-tank,some31stateshadtoclose$55billioninshortfallsforthe2013fiscalyear?
AstheCenterrecentlyreported:
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"Thesegapsareallthemoredauntingbecausestates’optionsforaddressing
themarefewerandmoredifficultthaninrecentyears."
|
AndtheFederalReserveBankofNewYorkrecentlyfound
thatmunicipalbonddefaultsareinfactmuchgreaterthanratingagencieshavereported.
Standard&Poor’sreported47defaultsbetween1986and
2011,butaccordingtotheNewYorkFed,therewereinfact2,366–FIFTYtimesmore.
Remember,unlikethefederalgovernment,statescan’ttypicallyrunadeficit,
sotheyaretakingdrasticstepstocutback.Forinstance…
**AtowninOhioturnedoff766ofthetown’s5,200streetlights–
whichwillremainturnedofffortwoyears.Theyhopetosave$185,000.
**Philadelphiaannounceditisclosing37schools,becausethedistrictis
"outoftimeandoutofoptions,"accordingtoSuperintendentWilliamHite.
**A2014studybyStanfordUniversitysays
theproblemismuchbiggerinmanystatesthanpeoplesuspect,becausestatesarecurrentlypermitted
totreatborrowedfundsasrevenueandignore
thefullcostofdeferredcompensationpromises
whenreportingexpenses.
Thosesortsofactionsallowelectedofficialstoreportbalancedbudgetsnow
whentheyareactuallycreatingdebtsthatmustbepaidoffinthefuture.
Thereportconcludedthat:
"Withoutdeep-seededreform…thefuturehealthofAmerica’scommunities
anditseconomyareatgreatriskofanotherdeterioration."
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NewJerseyGovernorChrisChristie,confirmed
thatstatebudgetproblemsaregoingonalloverthecountry…
Hetold60Minutes…
|
"It’snotlikeyoucanavoiditforever,’causeit’sherenow.
Andweallknowit’shere.Andthefederalgovernmentdoesn’thavethemoney
topaperoveritanymore,either,forthestates.
Thedayofreckoninghasarrived.That’sit.
Andit’sgonnaarriveeverywhere.
Timingwillvaryalittlebit,dependinguponwhichstateyou’rein,butit’scomin’.
"Wespenttoomuchoneverything.Wespenttoomuch.
Wespentmoneywedidn’thave.Weborrowedmoneyjustcrazily.
Thecreditcardsmaxedout,andit’sover.It’sover."
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That’swhyChristieandothergovernorsaroundthecountry
arenowintroducingbillstoslashpensionbenefitstogovernmentemployees.
Aslaughableasthesestepsare,atleasttheyaretakingsteps
intherightdirection—makingdrasticanddramaticchangestosavemoney.
Andalthoughit’sgonealmostcompletelyunreportedinthemainstreampress,sixU.S.
communitieswereactuallyforcedtodeclarebankruptcyin2010…
andtherewereaslewofnewmunicipalbankruptciesin2011aswell,includingJeffersonCounty,
Alabama,whichatthetimewasthelargestmunicipalbankruptcyinU.S.history.
Ofcourse,thatwastoppedin2012,whenthreeCaliforniamunicipalitiesdeclaredbankruptcy
inamatterofweeks,includingthenext"largestmunicipalbankruptcyinU.S.history"…Stockton,
acityof290,000peopleeastofSanFrancisco.
AndthenwehadthebankruptcyofDetroitinJulyoflastyear.
Ofcourse,I’vebeenanalyzingtheproblemsintheMotorCityformanyyearsnow.
Infact,Iwrotebackin2009that:"thereisnowaytoargue
thatwhatthegovernmenthasdonetoDetroitisanythingbutahorrendouscrime."
IknewDetroitwasgoingbankruptyearsbeforeitwasannounced.
JustlikeIknewotherbiginstitutionslikeGM,FannieMae,
andFreddieMacwouldallgobankrupttoo.
It’ssimplyamatterofunderstandingbasicmath.
JustliketheU.S.federalgovernmentrightnow,therewasnoway
anyoftheseinstitutionscouldhopetomeetalloftheirfutureobligations.
Andgettingbacktothedirestateofaffairsonthelocalgovernmentlevel,
keepthisinmind:onlyabouthalfthestatesinthecountry(27inall)
allowmunicipalitiestodeclarebankruptcy.
Ifitwereallowedeverywhere,I’msurewe’dseetwice
asmanybankruptciesaswe’reseeingtoday.
Butformostplaceswherebankruptcyisnotallowed…
theyjustkeepkickingthecandowntheroad,ratherthanaddresstherealproblems.
InBaltimore,forexample,wheremyfirm’sofficesareheadquartered,
thecitycan’tlegallydeclarebankruptcy.
Butthatdoesn’tmeanitisn’tessentiallybankrupt.
Anindependentauditsolicitedbythemayorrecentlyshows
thecitywillbe$2billionshortofthemoneyitneedsoverthenextdecade.
Asoneoflocalnewsstationreported:
the"CityofBaltimoreisonapathtofinancialruin."
AndthetrulyamazingthingisthattheU.S.federalgovernmentis
inevenworseshapethanthelocalgovernments!
Theonlyreasonwehaven’tseenthefullbruntofthiscrisisyetonthefederallevelis
becausewe’vejustcontinuedtopileonmoreandmoredebt.
Thestatescan’tprintmoney…buttheFederalgovernmentcan(atleastfornow).
Andforthemoment,thisisallthatispreventingacurrencycollapseofunprecedentedproportions.
**Andthisistheimportantpointtoremember:Whatmostpeopledon’trealizeis
thattheU.S.governmentcanonlycontinueprintingdollars…aslongasthe
U.S.dollarremainstheworld’sreservecurrency.
Ican’tstressthisenough:Youneedtoactnowinordertoprotectyourassets,
andgrowyoursavingsinthenextfewyears.
Inthenextfewminutes,I’mgoingtoshowyouexactlyhowI’mprotectingmyownmoney,
andwhatIrecommendyoudo.
Butfirst,letmeshowyouwhatexactlyisgoingonrightnow…
AmericansDon’tRealize
WhatIsAlreadyHappening
LikeIsaid,mostAmericansnotonlydon’tbelievetheU.S.dollar
couldeverloseitsspotastheworld’sreservecurrency,
theydon’tevenreallyunderstandwhatthatmeanseither.
ButIamheretotellyou…
thisisthebiggestproblemourcountrynowfaces,anditisclearlyunderway.
And,asImentionedatthebeginningofthispresentation,
it’sgoingtorapidlyaccelerateasaresult
ofthenewlawtheObamaAdministrationplannedtogointoeffectonJuly1stofthisyear…
I’llgettoexactlywhat’shappeningonthatday,injustaminute.
Butfornow,justknowthatyouhaveverylittletimetoprepare.
Yousee,withtherisinglevelofU.S.debt,manycountriesaround
theworldarequestioningthepositionoftheU.S.dollarasthereservecurrency.
TheywanttodiversifyoutoftheU.S.dollar,asquicklyaspossible.
ThelatestsignofamoveawayfromthedollarasareservecurrencyisthatChina
andSouthKorearecentlycametoanagreementthatallowsfirmstosettledealsineither
theChineseyuanortheSouthKoreawoninsteadoftheU.S.dollar.
"Theagreementispartofapushamongemergingcountriesto
internationalizelocalcurrenciesaftertheglobalfinancialcrisis,"reportsBloomberg.
AlanWheatley,aglobaleconomicscorrespondentforReutersrecentlywrote:
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"FedupwithwhatitseesasWashington’smalignneglectofthedollar,
Chinaisbusilypromotingthecross-borderuseofitsowncurrency,theyuan.
"Displacingthedollar,Beijingsays,willreducevolatilityinoilandcommoditypricesandbelatedlyerodethe‘exorbitantprivilege’theUnitedStatesenjoysastheissuerofthereservecurrencyattheheartofapost-warinternationalfinancialarchitectureitnowseesashopelesslyoutmoded."Infact,inthepastcoupleyears,ChinahassignedinternationalcurrencyagreementswithGermany,Brazil,Russia,Australia,Japan,Chile,
theUnitedArabEmirates,IndiaandSouthAfrica.
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JapanandIndiaalsorecentlysignedacurrencydeallinking
theircurrenciesclosertogether,andlesseningtheirdependencyonU.S.dollars.
Theseagreementsarepartofatrendthatstartedafewyearsago,
whenagroupoftheworld’smostpowerfulcountries,includingChina,Japan,
Russia,andFrance,gottogetherforasecretmeeting–
WITHOUTtheUnitedStatesbeingpresentorevenknowingaboutthemeeting.
VeteranMiddleEastreporterRobertFiskreported
onthiseventinBritain’snewspaper,TheIndependent.Here’swhathewrote:
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"InthemostprofoundfinancialchangeinrecentMiddleEasthistory,
GulfArabsareplanning–alongwithChina,Russia,JapanandFrance–
toenddollardealingforoil,movinginsteadtoabasketofcurrenciesincludingtheJapaneseYen,Chineseyuan,theeuro,goldandanew,unifiedcurrencyplannedfornations
intheGulfCo-operationCouncil,includingSaudiArabia,AbuDhabi,KuwaitandQatar."
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FiskalsointerviewedaChinesebankerwhosaid:
|
"Theseplanswillchangethefaceofinternationalfinancialtransactions.
America…mustbeveryworried.Youwillknowhowworried
bythethunderofdenialsthisnewswillgenerate."
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Andsureenough,afterFiskpublishedthedetailsofthissecretmeeting,U.S.officials
andcentralbankersfromaroundtheglobedeniedtheseplans.
Butastheoldcentralbankingadagegoes…
howdoyouknowexactlywhenacurrencywillbedevalued?
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Theansweris:RightAFTERtheheadofthecentralbankgoesontelevisiontoadamantly
denythatanysuchtransactionwilloccur.(Andguesswhosubsequentlyreleased
apublicstatementabouthowtheU.S.will"notdevalueitscurrency"?
Yes,youguessedit…formerU.S.TreasurySecretaryTimGeithner.)
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Yousee,thelastthingacentralbankerwantstodointhemidstofadevaluationis
togivepeopleawarningBEFOREhecandevalue.Sotheyhavetodeny,deny,deny.
Aftertheannouncementismade,it’stoolateforcitizensandinvestorstogetout.
Then,nottoolongafterthissecretmeetingwasheld,
theInternationalMonetaryFund(IMF)issuedareport
onapossiblereplacementforthedollarastheworld’sreservecurrency.
I’msureyourecognizethesignificanceofthisevent.
TheIMF,whichisheadquarteredinWashington,D.C.,
istheintergovernmentalorganizationthatsupportstheglobalfinancialsystem.
ItisTHEmostinfluentialfinancialorganizationintheworldeconomy.
TheIMFhasproposedreplacingtheU.S.dollarwithsomethingcalled
"SpecialDrawingRights,"orSDRs.
SDRsrepresentpotentialclaimsonthecurrenciesofIMFmembers.
SDRswerecreatedbytheIMFin1969andcanbeconvertedintoanycurrency,
basedonaweightedbasketofinternationalcurrencies.
WhentheIMFlendsmoney,ittypicallydoessoviaSDRs.
TheIMFalsoproposedcreatingSDR-denominatedbonds,
whichcouldreducecentralbanks’dependenceonU.S.Treasurybonds.
TheIMFalsosuggestedthatcertainassets,suchasoilandgold,
whicharetradedinU.S.dollars,couldbepricedusingSDRs.
ThisisaHUGEandimportantsteptoreplacetheU.S.dollarastheworld’sreservecurrency.
I’mtellingyou…it’scoming…andit’scomingmuchsoonerthanmostAmericansexpect.
MostAmericanssimplyaren’tawareofwhat’sbeingdoneandsaidaroundtheworld.
Forexample,regardingtheworld’sreservecurrency,
Chinaissuedareportthroughtheirstatenewsagency,Xinhua,stating:
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"InternationalsupervisionovertheissueofU.S.dollarsshouldbeintroducedandanew,
stableandsecuredglobalreservecurrencymayalsobeanoptiontoavertacatastrophe
causedbyanysinglecountry."
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It’sjustanothersignofthisinevitableevent—theendoftheU.S.dollarastheworld’sreservecurrency.
Anygovernmentorinvestorwithanysenseislookingtogetout
oftheU.S.dollarasquicklyandsafelyaspossible…
ChinaandRussia,forexample,
tookoneoftheirfirstbigstepstoreplacetheU.S.dollarbackin2010…
ChinaDailyreported…
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"Thetwocountrieswereaccustomedtousingothercurrencies,especially
thedollar,forbilateraltrade.Sincethefinancialcrisis,however,
high-rankingofficialsonbothsidesbegantoexploreotherpossibilities."
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Tosettletheirordinarytradingofabout$50billionperyear,
theynolongerfirstconverttoU.S.dollars.
Sincethen,Chinahasreachedagreementswithmanyothercountries,asImentionedearlier.
Remember,they’vealreadysignedinternationalcurrencyagreements
withGermany,Brazil,Russia,Australia,Japan,Chile,
theUnitedArabEmirates,IndiaandSouthAfrica.
Whatdoesthismean?
Well,itusedtobethatChinahadtoobtaindollarstobuynaturalgasfrom,say,Russia.
Butnotanymore.AndRussianolongerneedsU.S.dollarstobuystufffromtheChinese.
AndthisbringsustooneofthebiggestandmostimportantfactsregardingtheU.S.dollar.
Asthedollarlosesitsplaceastheworld’sreservecurrency,
foreigncountrieswillnolongerneedtomaintainlargeholdingsofdollars.
Thismeanswewillnolongerbeabletoprintasmuchmoneyaswewant—
becausetherewillbefewerandfewerpeoplewillingtoloanuslargeamountsofmoney.
ThismovebetweenChinaandothercountriesaround
theworldwouldhavebeenunthinkable10yearsago,buttodayitisthenewreality.
AsIamsureyouareaware,foryearstheU.S.dollar
hasbeenacceptedalmostuniversallyaroundtheglobe.
Heck,manytimeswhenI’vetraveled,
Ineverevenbotheredtoconverttothelocalcurrency,
becauseIkneweveryonewouldtakemydollars.
Well,that’ssimplynotthecaseanymore…
ManyPlacesNoLongerAccepttheDollar
Forexample,theSeattleTimesreportsthatinMexico,
Americansarenolongerallowedtoexchangemorethan$1,500permonth.
InIndia,thecountry’stourismministersaidU.S.dollars
willnolongerbeacceptedatthecountry’sheritagetouristsites,liketheTajMahal.
AndtheU.S.dollarisnolongergoodanywhereinCuba.
Chinaismovinginthesamedirection.TheNewYorkTimesreports…
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"Now,manyshopsinChinanolongeracceptdollar-basedcreditcardsissuedbyforeign
banks…andforeignerscannotconvertAmericandollarsintorenminbibeyondagivenquota."
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Iran,ofcourse,hasalreadymovedallofitsreservesoutofU.S.dollars,
andKuwaitde-peggedit’scurrencyfromthedollarafewyearsago.
AndtheChicagoMercantileExchange
(theworld’slargestfuturesandcommoditiesexchangeboard),
nowacceptsgoldtosettlefuturescontracts.
Untilrecently,theexchangetypicallyacceptedonlyU.S.
Treasurysecuritiesaspayment.
TheguysattheMercantileExchangeobviouslyseethewritingonthewall.
Again,thiswouldhaveallbeencompletelyunthinkable10yearsago,buttodayit’sareality.
Andthistrendisgoingtokeepmovingincrediblyfast.
Justlookattheactionstakenbysmartinvestors…
BillGross,whoprobablyknowsasmuchaboutcurrenciesanddebtasanyoneintheworld,
runstheworld’sbiggestbondfund.HewasquotedbyBloombergnottoolongago,saying:
|
"We’vetoldallofourclientsthatifyouonlyhadoneidea,oneinvestment,
itwouldbetobuyaninvestmentinanon-dollarcurrency.
Thatshouldbeontopofthelist."
|
JimRogers,oneoftheworld’smostsuccessfulmulti-millionaireinvestorswrites:
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