7 ways the world is preparing for the collapse of the dollar (and why this is crucial for you to...

8/7/2019 7 Ways the World is Preparing For the Collapse of the Dollar (and why this is crucial for you to know)

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7 Ways the World is PreparingFor the Collapse of the Dollar

(and why this is crucial for you to know)


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GuardianGoldandSilver.comholds bvbvbvbvb8006214886

Tuesday,8:47pm

From:AaronKutchinsky

Hello,

Andthankyou.Iamtrulygladyouhavereachedouttousandourcommunity.

Hereswhatyouprobablydontknow:

Thereisafundamentallyneweconomicrealitycomingintoviewontheworldstage,anditisevolving

rapidlyandexponentially.Infactwearewitnessingandexperiencingthebiggestfinancialandsocial

paradigmshifttheworldhaseverseen,anditisrealandtrueandcannotbestopped.

Webelievetheevidenceisoverwhelming:TheUSDollarSystemisundergoingamonumentaland

dramaticchangenow.Itiscruciallyimportantweconsiderourcurrentbestoptionsandbegintotake

prudent,reasonable,andresponsibleactiontopreserveourwelfareandviability.

Focusandattentionareyourbesttoolsrightnow.Followthemoney.Examinethedecisionsand

actionsofthemajorfinancialplayersoftheworldandyouwilldiscoverhowtheyarepreparingand

positioningthemselvesforwhatisahighlyprobable(ifnotmathematicallycertain)outcome.Inother

words,followtheirmoneysoyoucanlearnhowtoprotectyourmoney(really,purchasingpower).

Thatisthepointofthisentirepresentation.

Mygreatestwishisthisinformationactsasajumpingoffpointforyourvoyageofdiscoveryofthe

plaintruthatthisamazingtimeinhistory.Ibelievewearenowcalledupontointelligentlyparticipate

withourfuture.ItisinthatspiritthatIinviteyoutofollowyourgutinstinctforthetruthandto

continueuntilyouarefullysatisfiedwiththeanswer,andthecourseofaction,youareseeking.

Bestregards,

AaronKutchinsky

creator/founder


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7 Ways the World is Preparing

For the Collapse of the Dollar(and why this is crucial for you to know)

1. Central Banks to Abandon the U.S. DollarA new report from Morgan Stanley analyst Emma Lawson confirms what many hadsuspected: the dollar is firmly on its way to losing its status as the reserve currency of theworld. We already knew that central banks have preferred gold to dollars. According toLawsons data, it seems that those central banks prefer almost anything to dollars. Call itdiversification, if you must, but the trendline indicates that central banks are finally puttingtheir money where their anti-dollar mouths are. The dollar has been in free-fall since 2007.

Last year, both China and Russia have questioned why the dollar should be the worldsreserve currency. And just last week, the United Nations released a report concluding that thedollar should no longer be the worlds reserve currency because it is not stable enough.


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Central banks and governments added 425.4 tons of gold last year, for a combined 30,117tons, the most since 1964 and the first expansion since 1988, data from the World GoldCouncil show. Official reserves of central banks and governments may expand by another192 to 289 tons this year, according to CPM Group, a research and asset-managementcompany in New York.

Comment:This is called the remonetization of gold. Purchasing power is being repositioned intotraditional and proven stores of value, gold, otherwise known as hard asset money. Andthat is because gold is not granted value or purchasing power by any government, regime, orscheme. Gold is its own intrinsic value and therefore stands apart and is independent of thefiat (intrinsically valueless) dollar.

2. China, Arabia, Russia Planning: End of the US Petro DollarIn the most profound financial change in recent Middle East history, Gulf Arabs are planning along with China, Russia, Japan and France to end dollar dealings for oil, moving insteadto a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and anew, unified currency planned for nations in the Gulf Co-operation Council, including SaudiArabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors inRussia, China, Japan and Brazil to work on the scheme, which will mean that oil will nolonger be priced in dollars.

The plans, confirmed to the British newspaper The Independent by both Gulf Arab andChinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices,but it also augurs an extraordinary transition from dollar markets within the next few years.

Comment:

This one is a biggie. Everyone in the world is forced to buy their oil in US Dollars. Andthose dollars are losing the last of their purchasing power, which means everyone else in theworld is paying for our inflation. Its been a long time since the US Dollar became the worldreserve currency, the Petro Dollar, in 1944. Back then our money was backed by gold andwe were the strongest and most industrialized creditor nation on Earth.

The only conceivable validity the current US Dollar has lies in its Petro Dollar/ ReserveCurrency status. Once that support is gone consider wallpapering your living room in $20dollar bills. And dont expect any sentimental hesitation from the rest of the world theywill kick that crutch out from under the US Dollar system at the first opportunity that makessense for them.


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3. China Is Preparing for a Massive Dollar Freefall By Buying GoldChina is making preparations for the ultimate demise of the dollar. Li Lianzhong, a senioreconomist in the ruling Chinese Communist Party, directly attacked the dollar recently. Lismessage is simple: China should buy more gold because the dollar is poised for a further fall.Li also said that China should use more of its $1.95 trillion in foreign reserves to buy energy

resource assets.

Li asked the very valid question, Should we buy gold or U.S. Treasuries? The U.S. isprinting dollars on a massive scale, and in view of that trend, according to the laws ofeconomics, there is no doubt that the dollar will fall. So gold should be a better choice.

There is no doubt in our minds that China the largest holder of US Treasuries with almost$900 billion worth of bonds at the end of September, 2010 is maneuvering to reduce itsexposure to the buck.

China has revealed it had increased its holdings of gold to over 1,200 tons from 600 tonssince 2003. Data cited December, 2010 by Chinas state-run Xinhua news agency showed

that China imported 209.7 metric tons of gold in the first 10 months of 2010, a fivefoldincrease compared with the same period last year.

Comment:

Bottom line: China has been our banker issuing credit by buying our Treasuries and


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funding our way of life and our Dollar dominance for a long time. Those days are over. Andwho will buy our debt now? Why, the Federal Reserve will. Thats right, the Fed will inventmoney out of thin air to buy and support our exponential debt needs. And thats a one-wayticket to massive inflation and/or hyperinflation.

4. The Biggest Financial Players Are Buying A Lot of GoldThe world's wealthiest people have responded to economic worries by buying gold by thebar -- and sometimes by the ton -- and by moving assets out of the financial system, bankerscatering to the very rich have reported.

Fears of a double-dip downturn have boosted the appetite for physical bullion as well as formining company shares and exchange-traded funds, UBS executive Josef Stadler told theReuters Global Private Banking Summit.

"They don't only buy ETFs or futures; they buy physical gold," said Stadler, who runs theSwiss bank's services for clients with assets of at least $50 million to invest.

UBS is recommending top-tier clients hold 7-10 percent of their assets in precious metalslike gold, which is on course for its tenth consecutive yearly gain and traded at around$1,314.50 an ounce on Monday, near the record level reached last week.

"We had a clear example of a couple buying over a ton of gold ... and carrying it to anotherplace," Stadler said. At today's prices, that shipment would be worth about $42 million.

Julius Baer's chief investment officer for Asia is also recommending that wealthy investorspark some of their assets in gold as a defensive stance following a string of lackluster U.S.data and amid concerns about currency weakness.

"I see gold as an insurance," Van Anantha-Nageswaran said. "I recommend 10 percent asminimum in portfolios and anything more than that to be used for trading purposes, torespond to short-term over-bought or over-sold signals."


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Comment:

Thats it in a nutshell. This is a perfect illustration of an age-old principal: When paper isdying, you retreat into money insurance and wait out the storm. It is as simple, easy, andintuitive as that. Gold is historys eternal and safest form of money.

5. Major Countries are Aggressively Buying GoldEmerging market countries are quietly buying gold en masse. In the past 12 months, Russia,China, and India moved part of their Western currency reserves into bullion. The shift wassignificant enough to push gold prices higher even as equity markets settled down. Thisyears gold rush is a result mainly of buying pressure from emerging market banks, notworried retirees buying coins.

So why is this important? The future of the global economy is in the East. Instead ofmultiple-trillion dollar debts, China, Russia, and India have currency reserves. These

governments are slowly moving their reserves from fiat currencies like the dollar to morestable stores of value like gold. This is a clear sign that confidence is waning in the USgovernments ability to pay off debt. They are, in essence, shorting the US economy andexploring other stores of value besides the dollar.

Comment:

Is the macro picture coming into a little more focus now? There is nothing unusual orunexpected about this. It is the perfectly natural result of a fully fiat currency system. Onceall restraint has been suspended for money creation youve pre-determined the end resultbecause youve unleashed unlimited credit, which means unlimited debt. And you end up

with a Ponzi scheme of ever-increasing debt to pay for previous obligations at interest. Thatit is why fiat currencies have a 100% failure rate. They spiral out of control as eachgeneration of debt must be larger to satisfy the previous generation of principal and interestpayments.

6. The World Prepares for Dollar Collapse Because the Math is CertainAmericans must ready themselves for a massive devaluation in the dollar as international

investors dump their U.S. assets, says a former Bank of England policymaker. Relying on thekindness of foreigners to finance our standard of living may be about to be revealed asirresponsible folly.

The assumption in modern economics that U.S. government bonds are virtually risk-freeinvestments will soon be relegated to myth as investors lose patience with the worldsbiggest economy, according to Willem Buiter.


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Disenchanted foreign creditors may be about to head for the exits as proposed borrow andspend your way out of recession policies undermine the value of the dollar and faith in theU.S. financial system. The national debt is projected to jump by as much as $2 trillion thisyearan unprecedented increaseaccording to the Washington Post.

Professor Buiter, who is now at the London School of Economics, says Americans need to

prepare for the onset of foreign capital flight as investors around the world dump U.S. assets.

There will, before long (my best guess is between two and five years from now) be a globaldumping of U.S. dollar assets, including U.S. government assets, says Buiter. Old habitsdie hard. The U.S. dollar and U.S. treasury bills and bonds are still viewed as a safe haven bymany. But learning takes place.

According to Buiter, recent U.S. debt additions and the trillions in banking-sector guarantees,coupled with the proposed future economic stimulus spending, means that there is nolegitimate way in which the government will be able to meet its liabilities.

Buiter says the government will inevitably choose to create whatever money it deemsnecessary to cover its spending needs. The only alternative is default on the federal debt,he says. There is little doubt, in my view, that the federal authorities will choose theinflation and currency depreciation route over the default route.

But the government trying to inflate its way out of debt by electronically creating whatevermoney is necessary to pay the bills undermines the value of the national currency. U.S.government bond holders run the risk of being paid back in worthless dollars. Of course, anyAmericans who have savings will see the purchasing power of their dollars plummet too.

If I can figure this out, so can anyone in the U.S. or abroad who follows recent economicdevelopments, said Buiter. The dawning of the realization will lead to the dumping of theassets.

The consequences of a society and economy structured around consumption and spending, asopposed to production and savings, may be about to wreak havoc on the dollar andAmericas standard of living.

Comment:

By now you know exactly what this means. Are you completely exposed to the Dollar? Have

you hedged in any significant percentage out of the Dollar system? Do you have any moneyinsurance? Hedging has been a traditional, time-tested, and conservative approach to moneymanagement and wealth preservation for generations. Whats your plan? Whats yourvision? What do you know?


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7. The Average Person is NOT Prepared and is Totally Exposed to the DollarMany market participants and commentators are obviously having a hard time distinguishingbetween a bull market and a bubble. More and more articles are referring to the imminentburst of the gold bubble and to an alleged crowded trade.

The facts quickly put these observations into perspective: Currently some 0.8% of all globalfinancial assets are invested in gold and gold derivatives.

In 1921 the allocation was 28% In 1932 the allocation was 20% In 1948 the allocation was 30% In 1981 the allocation was 26% In 2009 the allocation was 0.8%

If a total of 2% were allocated to gold, the additional demand would amount to about 85,000tons or the total global mining output of almost 34 years. Granted, this is only a numericmodel, but it illustrates how unfounded the myth of a gold bubble is. According to an oldsaying, one tends to see the bubbles wherever one is not invested.

Comment:

Inflation has forced all us to become professional gamblers over the last 30 years. Thatswhat equity investing is you are betting that your equity will be in demand, will increase invalue, and someone else will buy it from you and lock in your gains. And of course that otherperson will have the same hopes as you, but eventually someone must lose because that isthe nature of gambling.


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Prudence has been abandoned and must be re-discovered once again. If you dont have abalance, a hedge, to all that paper dollar denominated equity position you are completelynaked and exposed to whatever fate lies in store for US currency system.

In Conclusion

The monetary role that has been established and manifested over the past centuries is currentlybeing re-discovered. For centuries, gold has represented consistency of value, independence, and

stability. Gold is the only asset that is not based on a contractual agreement between a creditor and adebtor. It is the only supranational, internationally accepted means of payment, and has survivedevery war and every national bankruptcy. This has yet been proven again amid the current turmoil,and we expect this tendency to last throughout at least the coming 5 years.

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www.GuardianGoldandSilver.com

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