The days of U.S. Dollar worldwide hegemony are coming to an end — Are you prepared?
By Patrick Vermeister
25 April 2016
Many Americans are surprised when they hear that there are more U.S. Dollars (roughly 60%) existing outside the United States than inside the U.S. Many also do not know that the good ol’ Greenback is the de facto currency in world trade, and specifically, global oil trade.
That means every drop of oil that has been traded in the last five decades has been transacted in USD-denominated currency.
For many reasons, the Bretton Woods agreement of 1944 made the U.S. Dollar the world reserve currency, and indirectly, made the United States the most influential and dominant nation on earth. Part of that came as a result of the U.S. Dollar being considered a safe and strong currency when World War II ended. Many of the stronger nations, at that time, were experiencing uncertain futures in regard to monetary policy in the late 1940s.
For good AND bad, the United States (the U.S. Government) and individual Americans benefited from this new financial arrangement. The 1950s in the United States was a decade in which the American way of life was largely an enjoyable experience. The ability to print money at will helped build many homes, because the U.S. Dollar was backed in gold until the Nixon Administration took America off the Gold Standard. The absence of gold backing has led to the erosion of the dollar’s purchasing power. The dollar has lost roughly 97% of its purchasing power since the Federal Reserve was created in 1913.
With the advent of Quantitative Easing I, II, III and now Infinity, the days of prosperity are rapidly coming to an end. So likely before the year 2020 (and perhaps as soon as this fall), Americans can expect this dollar hegemony to unravel and will need to adjust to an extreme paradigm shift in regard to the global influence of the Red, White and Blue.
There are many developments coming to a head that could trigger the collapse of the dollar:
- Regardless of how rosy the media, and modified government statistics, paint the U.S. economy, there was never a recovery, and well-paying jobs and capital assets have been leaving the USA in droves. Last week, Intel announced it is eliminating 12,000 jobs (many of which are considered to be well-paying, high-tech posts). Today, surveys document that the American people basically have no trust in the media, as only 6% of Americans actually trust the information they’re receiving via the U.S. media. Regardless, the inevitable economic disaster will still take many by surprise.
- Global power Deutsche Bank is near insolvency, and as all the big banks are linked, a default is imminent. DB recently admitted that it manipulated the gold price. The bank’s troubles has been described as five times worse than the Lehman Brothers debacle in 2008 that nearly shut down the U.S. banking system before needing a government bailout to stay afloat. Add in problems at Société Générale in France and Barclays in England, and this is a giant ticking time bomb that could explode on a moment’s notice.
- Negative interest rates at banks are already a reality here in Europe, and the idea is being floated for use in the United States. This idea will further destroy capital. Negative interest rates means that a depositor pays the bank to hold their money. With that in place, people have no incentive to self-impose an additional cost for simply having a bank account. Other forms of securing paper assets are being implemented on a personal level by Europeans and no doubt will soon happen in the USA.
- The creation of the BRICS (Brazil, Russia, India, China, South Africa and many other countries) agreement has created an alternative to global trade not tied to the dollar. They already have a competitor to the International Monetary Fund, called the Asian Infrastructure Investment Bank. When the dollar becomes so devalued, foreign investors will look to bring the U.S. Dollar back to the United States and dump it there. This is already happening and is highly inflationary. The Chinese, whose nation is a big creditor to U.S. debt, are already buying up property in the U.S. as a way to spend that depreciating asset.
- World instability, both on the war front and on the financial front. The U.S. government has engaged in sabre-rattling with many nations, but especially Russia and China. Also, the American political system is not seen in a positive light in places like North Korea, Cuba, the Middle East and Europe. As history points out: War often follows financial troubles, as the government seeks to find a bogeyman to shift blame from its disastrous policy decisions.
- The current U.S. administration is assaulting the Constitution and Bill of Rights. In addition to being a human-rights issue, this is bad for business, and capital reinvestment will suffer. Entrepreneurs will move elsewhere, taking new jobs with them. Last report showed that more than 300,000 Americans were leaving the USA, taking their assets with them, and making a new life in a foreign country.
- Great Britain is set to vote June 23 on leaving the European Union (they never were a participant in the European Monetary Union). A vote to exit would mark a turn in sentiment back toward sovereignty and autonomous currencies for individual nations.
- Gold manipulation is waning. The Deutsche Bank revelation has been bad news for the gold manipulators, and the April 19 opening of the Shanghai Gold Exchange will also make it more difficult to suppress the gold price. A high gold price will serve as an attractive alternate to fiat currency. People in China and India have been net buyers of gold for over a decade while most Americans do not even know what a gold coin or portable gold bars look like.
- The Chinese Yuan was recently accepted into the IMF’s “Special Drawing Right,” which is government-speak for the new world reserve currency. The SDR currently includes a basket of the U.S. Dollar, Euro, British Pound and Japanese Yen. The Yuan will officially join the group in September, and the Chinese have been vocal in its desire to have a stable, gold-backed currency. Replacement systems are ready to go.
- Recently, the Saudi monarchy threatened the United States that it would sell off a reported $750 billion worth of U.S. treasuries if the media released un-redacted documents regarding the Saudi Arabian involvement in funding the 9/11 attacks. That seems to confirm suspicions that the 9/11 Commission Report was not entirely accurate, and greater political machinations were at play.
“These events are culminating, and Americans holding only U.S. Dollars stand directly in the cross-hairs of an ugly currency reset that is on the horizon,” said Adele Weiss, principal at Weiss+Associates, a European-based consultancy firm specializing in financial freedom and providing a legal process for leaving the U.S. Federal Income Tax System. “The U.S. government has been working overtime to try to force everyone in the United States to continue using only Federal Reserve Notes. That should tell you that, more than ever, you need to consider doing exactly the protective measures they demonize.”
The Keynesian debt-based financial model is dying a horrible death, and billions of people worldwide will be negatively affected. Despite being the architects of this imbalance, governments will at first flex its muscle and demand even more power. As they always seem to do, they will never admit to creating this destructive environment.
As the saying goes: Gold is the money of kings; silver is the money of gentlemen; barter is the money of peasants; and debt is the money of slaves. It should be clear in which paradigm we are existing. But it doesn’t have to be that way — for us, as a world, nation, community, or individual.
Weiss’ firm has helped over 3,000 clients, mostly those who wish to legally and lawfully exit the U.S. Tax Club, but also offers a Platinum Service for those who wish a more personal experience, including ideas to protect the wealth that Americans have attained over the years. It’s important to note that Weiss+Associates are not licensed financial advisers, but nevertheless it can share information on solutions that have worked for others. This includes financial-freedom options like the formation of offshore corporations as well as establishing investment accounts outside the United States in non-USD units.
“We are going through a historical period of great upheaval, but also great opportunity,” added Weiss, who in addition to his consultancy firm also holds several investment accounts, including accounts in Forex trading, which is an exchange of many world currencies. “But you better be positioned to move quickly on opportunities when they present themselves. It’s best to be proactive in your planning as it can take time to legally establish a financial presence outside the United States.”