The US Dollar: A Guaranteed Loser | The Gold Standard 2241

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It is a provocative title that grabs your attention, and it should. After all, the US dollar is the world’s reserve currency. If there’s one connecting theme throughout the Gold Standard series, it is this: the financial system is working. The only security we have in life is for us to take responsibility for ourselves.

On the Precipice of a Whole New Reality

Although the dollar is the strongest it has been in decades, the global economy is weakening. Nobody can afford stuff from the US, and we’re not buying from other countries. A strong dollar refers to the relative value of dollars compared to another currency or a basket of currencies. A currency isn’t strong or weak on its own; it can only be so compared to something else. The US dollar is on its way out. Many powerful and influential people in government want to replace physical currency with digital currency, something that can be easily tracked and measured.

The Coming Gold Storm

Central banks worldwide are nervous about the US dollars they have in reserves. The “perfect storm” of surging government debt, plunging real bond yields, and gloomy economic forecasts help position gold and silver at one end of the runway, ready for take-off. The World Gold Council reports that demand increases by 12% yearly. The first quarter demand saw increases of 34%. Gold is not a get-rich-quick scheme. It is a steadfast and reliable way to preserve your wealth.

The Road to Ruin

Order 6102 made it illegal for Americans to own gold. The government needed more gold to print more money because we were still on the Gold Standard. In 1933, Roosevelt asked everyone to surrender their gold. The government revalued gold in such a way as to devalue the currency. People holding onto dollars lost 40% of their wealth overnight. Things worsened on August 15, 1971, when Nixon, fearing a financial collapse, effectively ended the Bretton Woods System. All ties between the US dollar and gold were severed. This action ushered in an era of fake money.

The Nixon shock was an earthquake that began a series of troubling aftershocks that continue to this day. There was a recession between 1973 and 1975, stagflation throughout the 1970s, and the growing instability of floating currencies. Ever since Nixon closed the gold window, the nation and the rest of the world have been using a currency not backed by gold or anything else. Since 1971 the dollar has lost a significant amount of its purchasing power.

Fiat Currency

What is fiat currency? It is a currency that has no intrinsic value. The value of fiat currency comes from government decree. If people have confidence in the government, the government-backed currency has value. Fiat currency is insidious because it gives central banks too much control over the economy.

Everything Bubble

The focus on short-term gains increases the everything bubbles in stocks, bonds, and real estate daily. We have an economic system addicted to debt because we can’t stop printing money. Inflation is a chronic problem. Once it starts, it’s hard to stop. Money has been irresistibly cheap for the leaders of corporations. Still, instead of putting money into production, they’ve taken that borrowed money and bought stocks at incredibly high valuations. Now Jerome Powell must keep a stranglehold on monetary policy to bring inflation under control. That is the backdrop for a country where the median household net worth is non-existent. The top ten percent of households must be concerned about protecting their wealth.

Featured Precious Metal

Ken Russo introduces us to a fantastic bullion coin from the South African Mint. The one-ounce Big 5 Elephant Gold Coin is an instant classic. Brought to you by the same refinery that produces the successful Krugerrand series, the “Big 5” bullion coin has become immediately popular amongst collectors and investors. The Gold Elephant is the premiere product of this landmark series. The bullion program draws international attention to a real threat to South Africa’s precious wildlife.

Why is it Called the Big 5?

The Big 5 used to mean Africa’s most dangerous animals to hunt. As the program developed, the organizers focused on celebrating Africa’s wildlife and drawing attention to the plight of endangered species. Each bullion coin features beautiful depictions of one of these important animals. The big five are the elephant, the lion, the rhino, the leopard, and the cape buffalo. The Big 5 Gold Elephant is 24-karat gold.
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