Breaking it down…

Buy Gold Buy SilverI have a lot to say today (don’t worry that doesn’t mean this will be longer than normal, trust me I know “normal” equals really long for me).

I have been doing a lot thinking and reading and verifying and dot connecting (as best I can). I’ll be covering a number of topics, many of which I’ll detail in later posts, this is a surface view, just to get you thinking and hopefully researching and verifying for yourself.

No, I am not going to touch the Russian, Trump, dossier, DNC millions of dollars for…whatever, circus.  We’ll be hearing enough on this for the next decade I’m sure.  Will it effect the markets? I think it will.  It may even help expedite the outcomes of a couple of topics I’m covering here.  With that said…

I want to start with President Nixon. Oh!  Before I start, I want to say that the dollar is dead, we just haven’t recognized it yet. Following me here…

I can’t say that I remember Watergate, of course I’ve read about it, I wasn’t there to witness any of it.  All I know about Watergate is based on a couple of history classes in high school and college and a few articles I’ve read on the topic over the years.  My conclusion, I don’t think Watergate was Nixon’s biggest crime.

Prior to Nixon’s “I am not a crook” lie, Nixon, on August 15, 1971 took our US Dollar as far away from being backed by gold as he could. What happens when your currency is back by nothing? Here we are.

I think his administration did so knowing good and well what he was creating. He was creating failure. He assured us with 100% guarantee that the dollar will fail.

As you may well know, there has never been a purely fiat currency that has survived. There has been a 100% fiat failure rate throughout all recorded history, eventually what is initially worth zero goes back to zero (Bitcoin anyone?) That doesn’t mean that you can’t make a killing while the roller coaster is still functioning.  We have more billionaires today than ever thought possible. However, we are in the biggest deficit and debt as a national and collectively as individuals in the history of mankind.

The world knew what Nixon (the US) were doing with the dollar. By the start of the 70’s the US has be already been running up the deficit every year since 1961 (and most every year on average in some form since 1789, with a few exceptions over the years).

The President of France in the late 60’s knew what was going on ans what was about to happen to the dollar and ask for payments from the US to be in physical gold, not the dollar. France even sent a warship to New York in 1971 with instructions to get some gold.

France had wanted their $191 million in gold back from the NY Federal Reserve. Others countries wanted the same. It was when the British ambassador, on August 11, 1971, requested $3 Billion in gold from the US vaults that congress recommend we detach gold from the dollar, that very day. August 15th, it was done, no more backing for the dollar.

The US was killing the value of the dollar, the world saw it, Nixon completed the massacre by taking gold completely out of the picture.

Nixon knew that we had already been living above our means for a very long time and could not maintain the sovereignty of the dollar if it wasn’t backed by something that is limited and real (i.e. Gold). The only way the spending and the growing control of the government could continue was if gold was out of the picture. So that’s what happened.

Typically this would have brought down any other currency and thus the economy of whomever was dumb enough to do this. We were dumb enough, but we had a couple safety nets.   There are a few specials rights that the dollar had going for it (still does) that allowed (and continues to allow) the US to detach the dollar from anything of value.

One, the US Dollar was setup to be the world’s reserve currency back in 1944, the whole Bretton Woods thing. Two, circa 1974, the US Dollar was deemed the Petrodollar, meaning oil would be traded in US Dollars, even if the oil wasn’t going to or coming from the US.  What this meant (in very generic terms) is that any two countries who wanted to trade/buy oil had to convert their currency to the dollar to buy the oil.  This meant that the US was pretty much paid every time any country wanted oil (“legally”).

I do not want to get side tracked here, however, I read the other day that China is ready to launch their own “PetroYuan” by the end of the year. I have not verified this, however, with everything that China is doing with their oil for yuans transferable to gold strategy, a PetroYuan makes complete sense and will severely and I mean SEVERELY hurt the dollar.  Some are saying it’s worth going to war over. What’s a few million lives compared to trillions of oil dollars? I don’t believe we’ll ever get to that point, our elected “leaders” all mostly seem to be money grubbing, greedy, good for basically nothing (want to know my real opinion?), but I don’t think they are stupid enough that we would ever go to war with China. Every time I listen to the news I have to question that last statement.  Speaking of war…

The third aspect that has kept the dollar on top of the food global currency food chain is that we are a massive military super power. Look at what happens to the smaller countries that tried to drop the petro dollar…Iraq, Libya, Syria, etc… ring a bell? We needed to give them some US style democracy.  Do you think we’ll be able to do the same with China and Russia. Hardly! It is going to be very interesting (and potentially dangerous) to watch what happens in the next couple of months!

China knows the dollar’s days of dominance are numbered. China has been orchestrating their raise to the top and the fall of the dollar for a very long time. I honestly am convince that by killing the petrodollar China will be successful in knocking the dollar down from the world’s reserve currency status.

We already know that China has opened trading oil with yuans (transferable to gold) with Russia and Iran (and more than likely many others on a small scale – for now), we know this, it’s happening. Many others to include Turkey and possibly even Saudi Arabia (which is huge deal) are now seeing that they too can play this game, make more money and receive the same amount of goods and are getting on board with China. It is no longer an “if” this happens scenario, it IS happening.  It’s not just oil, other commodities are being traded outside the dollar between the BRICS and other nations as well.

What did you expect to happen when the dollar has lost up to 70% of its purchasing power against most of the world’s other major currencies since 1971? Not to mention that the almighty dollar has lost 97% of it’s weight against gold since 1974!

It’s a no brainer to bail on the dollar. Fortunately for the US, since 1944 we have made it very difficult to simply dump the dollar.  Including kicking people our of the club and threatening anyone who trades with those who dump the dollar with heavy sanctions (and some will say threats of war).  China is combating our dollar bullying very strategically! It’s rather intriguing, though, should China succeed on the level it looks to be that they are aiming for, it will destroy millions of people who have only dollars in their possession when that day comes.

What can we do? There’s nothing we can do to stop it. Some are saying the US should implement more sanctions, which is not very smart. More sanctions wouldn’t do anything but separate us more and expedite an already fast moving transition out of the dollar. China is shortening our whip, it’s getting harder and harder for us to threaten these smaller countries when China (and Russia) has a network with more to offer then the US does (on many levels) saying that they’ll cover the slack should the US kick them out of the USD club.  And of course we could always start a nuclear war with China, Russia and Iran, but then the world would probably be destroyed. That doesn’t sound very appealing.

All we can do is grin and bare it. Accept that the dollar’s reign is coming to a close and figure out a plan to start over without a domestic (or global) upraising. That’s the scary part. One thing that the Federal (state and even local) government isn’t afraid of is the US citizen, the very ones who will be most drastically and dramatically affected by the death of the petrodollar.

You better have financial insurance!  Owning physical gold and silver is the only protection you have against the world dropping the dollar.

We know that the world is going against the dollar, it’s the smart move, sadly. It’s going to be devastating for the US economy. The Feds are out of routes to take, they may be able to postpone the demise of the dollar with this “balance sheet reduction” tactic and then another round (or four) of QE.  That strategy is literally the same as putting a band-aid on a gaping wound, you are still going to bleed out, it may take a tiny bit longer but you are going to bleed out all the same.

Do you have financial insurance? When the time comes that you need it/have to have it, odds are there will not be any to be found, if there is it’ll be very expensive!  Be smart.

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