Wave Good-Bye To The Dollar’s Reserve Status
Wave Good-Bye To The Dollar’s Reserve Status by Dave Kranzler – Investment Research Dynamics
“Paper Money Eventually Returns To Its Intrinsic Value – Zero” – Voltaire
Set aside all other financial, economic and political concerns continuously shoved in our collective faces by the mainstream media. It’s a distraction – to a large degree intentional.
These are the ONLY events that matter right now: this, “China Begins To Reset The World’s Currency System,” and this, “Venezuela Is About to Ditch the Dollar in Major Blow to US: Here’s Why It Matters.”
Once the dollar is no longer regarded or used as the reserve currency, third-world poverty will engulf everyone in this country below the upper half percent wealth stratum…except those who possess a fair amount of physical bullion. I just bought more gold and silver coins from a friend yesterday who had an uncontrollable urge to get their house painted and needed to sell some to me to fund it. It won’t matter what the house looks like in a couple years but they would never take my word on that.
The level of assumed entitlement in this country by the middle class is absurd…
All the money and all the banks in Christendom cannot control credit…Gold is money and nothing else – JP Morgan’s 1912 Congressional testimony on “the justification of Wall Street”
Trump has suggested permanently removing the Treasury debt-ceiling. The Treasury debt-ceiling is the last remaining barrier to the ability of the Fed and the Government to create an infinite amount of fiat currency. Debt that is issued behaves exactly like printed currency until that debt is repaid. The non-repayment and continued issuance of the amount of debt outstanding is the critical point to understanding this concept. Since the early 1970’s, the Treasury debt outstanding has grown continuously.
Printed Treasury certificates created in this manner behave no differently than printed currency. This is a reality that economists completely ignore. Most analysts who think they understand monetary economics look upon this concept with disdain. The continuous issuance of an increasing amount of credit of any type is no different that outright currency printing (until the amount of outstanding credit is paid off, which it never has been since the demise of Bretton Woods in 1971).
Removing the debt-ceiling gives the U.S. Government, in conjunction with the Fed, the power to print an unlimited amount of Treasury notes. Historically, a large portion of these notes have been funded with recycled petro-dollars. The “QE” implemented by the Fed funded $2.5 trillion of the Treasury issuance. I don’t know where the funding for the next round will come from unless the Fed prints a lot more money. I suspect it will. The price of gold (and silver) spiked-up on Friday in correlation with the announcement of Trump’s proposal. That’s your warning shot…