techno-ag said:
LOYAL AG said:
pfo said:
Washington DC has spent, borrowed and printed America into a very dangerous fiscal situation. No currency has survived a 120% debt to GDP without a major debasement. Add in the fact America has used the SWIFT System to punish our adversaries and now we have the BRICs central banks on an 18 month gold buying spree to back their currencies to replace the dollar as the world's reserve currency. The dollar is facing a historic collapse and the jack wagons in Congress aren't even talking about reducing spending and ending their economic malfeasance. The loss of world's reserve currency status means inflation in America will go way up!
America has enjoyed 40 years of declining interest rates so the debt service didn't balloon as congress kept adding debt. So now cheap debt is getting rolled over at higher interest rates therefore debt service is going up. Where is that money coming from to pay for that? Borrowing and printing! The dollar is doomed and the people running this country are doing it on purpose under the partial illusion of incompetence.
Own gold, bitcoin, real estate, oil and gas minerals, possibly stocks in the strongest companies and other things of real value that will maintain value as the dollar becomes more and more worthless.
Maybe the gov will use another trick to keep the illusion of prosperity going a little longer. Like putting the debt on the Fed's balance sheet and stopping paying interest. Maybe something else. But at some point, the chickens are coming home to roost.
Most of this makes sense but the idea that BRICS nations are buying gold to supplant the dollar with an asset based currency is absurd. None of those nations are even remotely fiscally responsible now so why on earth would they implement a new currency that's backed by gold? The notion is ridiculous.
If the dollar collapses it all collapses at which point gold and stocks and dollars are all worthless. Guns, ammo, food and a reliable water source is what's going to matter. There isn't a scenario where the dollar collapses and chaos isn't the result. Wealth preservation isn't going to matter. Food and physical security is what we'll all be worried about.
Had a story on here last week about Zimbabwe converting to the gold standard. They've been stockpiling gold the last 18 months.
Multiple thoughts:
1. Zimbabwe has already gone through hyperinflation. The BRICS nations haven't yet. I'd argue you have to see that pain before you're willing to do what's necessary to fix it.
2. Zimbabwe and its currency are pretty much irrelevant on the world stage.
I think people believe we're going to see the dollar replaced with a gold back currency called The BRIC and the world is going to keep humming along as if all is well while the U.S., the worlds largest consumer base, largest economy by half, largest producer of energy and largest producer of food, dies on the vine but that simply isn't happening. The world can't function without our consumer demand or our currency and global trade ends in a flurry of piracy without our Navy. The entire planet relies on a stable dollar to function which is the root of the IMF's comments here.
As to the idea that The BRIC COULD replace the dollar or that those nations want to operate on the gold standard no, they don't. China prints at 2x or more the rate we do. The Chinese credit bubble dwarfs ours. The CCP will NEVER implement the discipline necessary to adopt an asset backed currency.
Please don't underestimate the end of the dollar as global reserve. It's going to be catastrophic. The world is riding our coattails and nobody else has coattails to ride. This isn't going to go well.
The federal government was never meant to be this powerful.
