The Dollar is Dying

As we’ve mentioned before, the key to the United States’ imperial power for nearly a century is the dollar.  Yes, we’ve got drones and tanks and Jack Ryan and a huge military but these just make up the dollar’s enforcement arm.  The United States holds its power by the dollar.  The dollar is powerful because ever since 1945 and Bretton Woods the United States has successfully forced it onto the rest of the world as the reserve currency, instead of gold or silver.  This means banks hold their reserves in dollars, giving the United States unprecedented and deeply invasive economic leverage around the globe.

But all empires eventually topple.  If you study how they fall, you’ll see that it begins when they debase their currency.  The United States began this in 1873 when it left the silver standard.  It continued it in 1934 when it left the gold standard, completing the move to a completely fiat monetary system in 1971 when it removed all ties between the dollar and gold.  But the dollar was entrenched and when something’s in place, it takes a long time to move it.

Someone told me once, “It’s easier to change personnel than it is to change minds”.  This will be the case with the dollar’s death.  It will take longer than a year or two because people just can’t imagine a world without the dollar.  It’ll take a generation or more.  The personnel will have to change.  In the meantime, the dollar’s credibility, the world over, will slide more and more as those in power resort to nastier and nastier tricks to maintain their dollar-bestowed world domination. 

These tricks will make bank-bailouts at taxpayers’ expense look like a gift.  Bank deposits of individuals like you and me will be absorbed by failing banks, pension funds will be appropriated or frozen, and more.  Circumstances must proceed from bad to worse as a long-established economic system fails.  But the dollar doesn’t exist in a bubble.  Its fibrous tentacles have infected every point of the globe.  This means that conditions will be exponentially uglier.  A system as interwoven and cruelly built as America’s Dollar Empire will not go quietly into the night.

But don’t take our word for it.  A strategist from JPMorgan recently stated, “The US dollar will struggle to remain the top international currency in the coming decades as the rising power of Asian economies is set to undermine its leading position…the dollar could lose its status as the world’s dominant currency…due to structural reasons as well as cyclical impediments.”

Structural reasons as well as cyclical impediments!  You gotta love their uber-speak! I can only imagine my mechanic telling me my wheel (which he didn’t tighten when he serviced my car) fell off while I was driving 75 on the highway because of structural reasons as well as cyclical impediments.  Only analysts can get away with garbage talk like that.  But I digress.

How could this possibly happen?  How could the dollar lose its place as the top international currency? Maybe because the US doesn’t produce anything anymore.  Maybe it’s something else.  Regardless JPMorgan says, “The Asian economic zone accounts for two-thirds of global economic growth and 50% of global GDP.”  Nope, wait, it is because we don’t produce anything. 

Then, believe it or not, a JPMorgan analyst breaks into a moment of rare verbal clarity, resembling a non-robotic human even when he says – “In other words, in the coming decades we think the world economy will transition from the US and US dollar dominance toward a system where Asia wields greater power.”

There you have it.  The experts agree!  A major economic shift, unseen for several generations is taking place now – not tomorrow.  It is happening now and it’s time to dump dollars, folks.  Take rubles, bitcoin, yen, euro, if you like.  In the end you’re going to have a lot better luck with gold and silver, though.