U.S DOLLAR LOSING STATUS AS THE WORLD'S CURRENCY JUST LIKE BRITAIN DID IN 1970
1. The US Dollars have been the world's reserve
currency for decades now, so most Americans don't have a clue about what the
repercussions are of losing this status.
2. You might think that this could never happen, but
it happens all the time when countries get too far in debt or when they consume
too much or produce too little.
3. In fact, the same thing happened in Great Britain
in the 1970s. Most people don't know this, but British Sterling was the reserve
currency for most of the world for nearly 200 years.
4. It continued to play this role until after World
War II, when America was forced to prop up Britain's economy with foreign aid.
5. Remember the famous Marshal Plan when they gave
billions to help European countries rebuild? Unfortunately though, Britain
pursued a socialist national agenda. The government took over all of the major
industries.
6. Like Barrack Obama, Britain's leaders wanted to
"Spread the Wealth Around". Pretty soon, the country was flat broke.
7. The final draw for Britain came in 1967, when
things got so bad the Labour Party (the socialists) decided to
"devalue" the British currency level by 14%, overnight. They believed
this would make it easier for people to afford their debts.
8. In reality, what it did was make anyone holding
British Sterling 14% poorer, overnight, and it made everything in Britain,
much, much more expensive in the coming years. And for the country as a whole,
it ushered in one of the worst decades in modern British history.
9. Most people do not know about Britain's
"Winter Of Discontent" in the late 1970s, when the government put a
freeze on wages. There were continuous strikes in nearly every sector, grave
diggers, trash collectors, even hospital workers.
10. Things got so bad at one point that many
hospitals were reduced to accepting emergency patients only. In 1975, inflation
in Britain skyrocketed 26.9% in a single year.
11. The government also imposed what was known as
"Three Day Week" in 1974. Business were limited to using electricity
for only three specified consecutive days' each week and they were prohibited
from working longer hours in those days. Television companies were required to
cease broadcasting at 10:30pm to save electricity.
12. The extreme problems in the economy led to
Britain being nicknamed "the sick man of Europe". Imagine... Britain
was a global superpower for 150 years. But when they started intentionally
devaluing their currency, things went straight downhill.
13. What happened to the British currency is now
happening to the US Dollar. So not only the price of oil and other commodities
skyrocket in America, but almost anything they consume will immediately get
more expensive. All the clothing, furniture and household goods they import from
China, all the food they get from Central and South America, all the
electronics and televisions, computers, and cars they get from Asia and Europe.
14. It's happening right now! The price of gold is
up 85% since the financial crisis. Oil prices have doubled. Copper prices are
up 200% in the last two years. Cotton prices are up 102% since July of 2010.
15. There are other disastrous consequences in the
U.S Dollar losing status as the world's currency. There would be much less
demand for U.S Dollars around the globe, so interest rates will skyrocket. For
example; instead of getting a mortgage at today's incredibly low rate at 4.5%,
it might cost you 8% or even 10% or 15%.
16. Imagine what that would do to housing prices. It
will cost every American business a lot more money for supplies and materials.
No one will be able to get a loan, and no bank will want to make loans.
17. In short, when the U.S Dollar loses its spot as
the world's 'reserve currency', it will cause a brutal downturn in the economy,
which will be about 10 times worse than the mortgage crisis in 2008.
18. You see, what will also happen as a result of
this currency crisis, and the end of the U.S Dollar as the world's reserve
currency will be Massive Inflation the likes of which we have never seen
before. When everyone is trying to get rid of their Dollars, the government is
printing more and more to pay debts, and no one wants to own them, the crisis
will reach epic proportions.
19. Just look at what happened to one European
country that faced this type of crisis back in the 1990s. This is what happens
in a major hyperinflation in the real world. By the early 1990s, the national
government of one European nation had spent nearly all its savings. So what
they did next was simple. They began to steal the savings of private citizens
by limiting the people's access to their money in government-controlled banks,
and to finance the daily operations of maintaining their basic infrastructure,
they started printing money big time. Even so, the country's basic
infrastructure began to fall apart. There were potholes in the streets, broken
water pipes, elevators that never got repaired, and entire construction
projects that simple shut down. At this point, the unemployment rate was more
than 30%. Then it got worse. Much worse.
20. Once you start down the dangerous road of
printing money, things can get extremely bad pretty quickly. The government
tried to counter the inflation by imposing price controls. But when inflation
continued, the government price controls made the price producers were getting
so ridiculously low that they simply stopped producing, bakers stopped making
bread, slaughterhouses refused to sell meat to the stores, other stores closed
down.
21. So what did the government do next to curb the
inflation? One bright idea they had was to force stores to fill out government
documents every time they increased prices. They thought that this would slow
down price increases, because the paperwork would take so much time! But like
many government plans, this one had terrible, unintended consequences.
22. Since stores had to dedicate an employee to do
nothing but register this paperwork, and since the process took so long, stores
began to raise prices on basic goods at even higher rates, so that they didn't
have to come back and file more paperwork!
23. Then, the government did what all governments do
during periods of hyperinflation: they created a new currency which basically
removed six zeroes from the old one.
24. So, 100,000,000 of Old Units will soon worth 100
New Units. Of course, this didn't work either... it never does. Between October
of 1993 and January 1995, prices increased by 5,000,000,000,000,000%. Sounds
ridiculous right?
25. In other words, a loaf of bread that cost $1 in
1993 suddenly costs $50,000,000,000,000. People of this once proud European
country weren't laughing one bit, especially those living on a fixed income. Of
course, at this point, the country completely feel apart. Businesses and
citizens across the country basically refused to take the local currency.
Instead, everyone started dealing in German Marks.
26. Keep in mind that the daily rate of inflation
was nearly 100%. Can you imagine the panic in a society when the price of just
about everything doubles every single day? It was absolute pandemonium, and the
economy basically came to a grinding halt. It's like living in a war zone.
27. Truckers stopped delivering Good. Stores,
restaurants, and gas stations all shut down. Besides, the only way to get gas
was to buy it on the side of the road, from someone selling it out of a plastic
can. The number of operating busses dropped by 60% and busses were so crowded
that drivers couldn't even collect fares.
28. Government ordered blackouts left people without
heat and electricity for long periods of time. They actually made it illegal
not to accept a personal cheque. Imagine, you could write a cheque and in
several days that it takes to clear, inflation would wipe out almost all of the
cost of covering your cheque. Yet, the government took none of the blame.
29. You think that just because it happened in
Europe doesn't it mean it can happen here, right? Well, guess what? The same
thing happened in this European country -- Yugoslavia. Also it has happened in
Iceland and Greece, but on a less dramatic scale. The only reason the situations
in Greece and Iceland weren't worse is because of giant foreign bailouts.
There's more debt to solve the problem of already existing debts.
30. In the past 100 years this type of debt crisis
has reared its ugly head in Germany, Russia, Autria, Poland, Argentina, Brazil,
Chile, the Ukraine, Japan and China.
31. So what are these desperate governments trying
to do? You won't believe their proposals. Sell Everything -- Selling
government-owned buildings, but will still occupy them by paying a 20-year
lease. The government is selling the legislative buildings, the House and
Senate, the State Capitol Executive Tower, the state fairgrounds, even prisons.
32. Release Prisoners -- Some states have taken the
radical step of opening its prison doors and releasing thousands of inmates.
About 11% of the state budget goes to the penal system (more than they spend on
higher education). They are cutting loose about 4% of the prison population.
33. Life Insurance -- The government is proposing
taking out "dead peasant" policies on state employees. When these
folks die, the money won't go to the dead person's family... but to the state
coffers, to help pay for more programs, insurance, and pension liabilities.
34. State and municipal governments are so broke, and
so desperate, that they are taking unprecedented steps to at least temporarily
avoid bankruptcy.
35. Nearly every state in the union is talking about
legalising some form of gambling, to boost tax revenue. Some still want to
legalise marijuana. None of these ridiculous steps will work in the long run.
36. This is an important point: What most people
don't realise is that the U.S government can only continue printing Dollars as
long as the U.S Dollar remains the world's reserve currency.
37. I can't stress this enough: You need to act now
in order to protect your assets, and grow your savings in the next few years.
What I am going to say is very controversial and will offend many people. No
one believed me a few years ago back in 2008 when I said the worlds largest
mortgage bankers would soon go bankrupt, but that's exactly what happened.
38. How do you know exactly when a currency will be
devalued? The answer: Right after the head of the central bank goes on
television to adamantly deny that any such transaction will occur. And guess
who went public in 2011 with a statement about how the U.S will "not
devalue its currency"? The U.S Treasury Secretary Tim Geithner.
39. You see, the last thing a cental banker wants to
do in the midst of a devaluation is to give people a warning before he can
devalue. So they have to deny, deny, deny. After the announcement is made, it's
too late for citizens and investors to get out.
40. The next phase in this crisis will threaten our
very way of life. The savings of millions will be wiped out. This disaster will
change our business and our work.
41. It will dramatically affect our savings
accounts, investments, and retirement. It will change everything about our
normal way of life: where we vacation, where we send our kids to school, how
and where we shop, and the way we protect our family and home.
42. I can see that most people will not know what to
do when certain commodity prices -- things like milk, bread and petrol soar.
They won't know what to do when banks close and their credit cards stop working
or when they're not allowed to buy Gold or foreign currencies.
43. Basically, for many years now, our government
has been borrowing so much money, that very soon, that we will no longer be
able to afford even the interest on these loans.
44. You may not think that things are that bad in
the economy but even if all Malaysian citizens were taxed 100% of their income
it would still not be enough to balance the Federal Budget. We'd still have to
borrow money just to maintain the status quo.
45. As the banking system collapse in 2008, all of
the bad debts were absorbed by the world's governments. The problem is even
before this crisis, our government was deeply in debt. With each additional
commitment we sink further and further into debt, closing in the moment that we
simple cannot afford even the interest payments on our obligations.
46. You see, the US Government has one very
important weapon to use in this crisis: The US is the only debtor in the world who
can legally print US Dollars. And the US Dollar is know as "The World's
Reserve Currency".
47. The Dollar forms the basis of the world's
financial system. It is what banks around the world hold in reserve against
their loans. Now, that's a SECRET THAT MOST POLITICIANS DON'T UNDERSTAND.
48. As things stand now, the US Government can't go
broke in any ordinary sense of the word because it can simply print dollars to
pay for its bad debts. That's what it's been doing since March 2009.
49. That might sound pretty good at first but let me
show you... You see, as things stand today, America is the only country in the
world that doesn't have to pay for its imports in a foreign currency.
50. Let's say your a German and you want to buy oil
from Saudi Arabia. You can't just pay for your oil in German Marks or the new
Euro currency, because the oil is priced in dollars. so, you have to buy
dollars first, they buy your oil. And that means the value of the German
currency is of great importance to the German Government.
51. To maintain the value of its currency, Germans
must produce at least as much as they consume from around the world. Otherwise,
the value of its currency will begin to fall, causing prices to rise and its
standard of living to decline.
52. But in America? They can consume as much as they
want without worrying about acquiring they money to pay for it because their
dollars are accepted everywhere around the world.
53. In short, for decades now, they haven't had to
produce anything or export anything to get all the dollars they needed to buy
all the oil and other goods their country required. All they had to do was
borrow the money, and boy did they.
54. Even as early as the 1970's America was the
world's largest creditor. By the mid 1980's they've become a debtor to the
world and since the late 1990's they've been the world's largest debtor.
55. Today, America owes more money to more people
than anyone else in the world, and that was before the financial crisis. With
all these bad debts piling up, they've had to begin repaying their debts by
printing trillions of new dollars. the impact of this is just now beginning to
be felt.
56. Once the creditors know what's happening they're
going to be very angry. I believe they will either complete stop accepting
Dollars in repayment or greatly discount the value of these new Dollars.
57. And that will make their consumption-led way of
life impossible to afford. Just think about the price of oil. Access to cheap
oil had been America's #1 gift of owning the world's reserve currency. This has
made oil cheaper in the US than almost anywhere else in the developed world.
58. I know you may think that oil prices have
skyrocketed in recent years but if you study closely, look at how much less we
Malaysians pay from other developed countries.
59. When you read these facts, I think you'll agree
with me that the U.S Dollar's days are numbered, as far as remaining the
world's reserve currency. China has gotten out of the Dollar. They have stopped
putting so much money into U.S Dollars and will instead look at the Japanese
Yen and the Euro. This is just one sign of the end of the U.S Dollar standard.
60. China holds more U.S Dollars than anyone else on
the planet. but China is getting out of the Dollar as fast as they can without
crashing their own economy.
61. Many American travelers never bothered to
convert to the local currency, because they knew that everyone would take the
U.S Dollars. Well, that's simply not the case anymore. HSBC, one of the largest
banks in Mexico, no longer allows you to deposit U.S. Dollars into their banks.
They've done this on the heels of money-laundering allegations, but I suspect
they also simply don't want to be stuck with tons of U.S. Dollars, as the
currency continues to decline. This move would have been unimaginable 10 years
ago, that a big bank in Mexico would no longer accept U.S Dollars for deposit.
Today, it is the harsh reality.
62. and Mexico is not the only place this is
occurring. Reuters reports that the same thing has happened in 2008 one of
Europe's most popular tourist spots. Currency exchange outlets in Amsterdam
have been reportedly turning away customers who want to exchange U.S Dollars
for Euros.
63. In India, the country's tourism minister said in
2008 that U.S Dollars will no longer be accepted at the country's heritage
tourist sites, like the Taj Mahal. And the U.S Dollar is no longer good
anywhere in Cuba.
64. Iran has already moved all of its reserves out
of U.S Dollars, and Kuwait de-pegged it's currency from the dollar a few years
ago. Depeg means to remove a previously instituted peg on a currency. For
example, if Currency A is pegged to Currency B at a 1:1 ratio, but the central
bank for Currency A decides to let it float, it is said to be depegged from
Currency B. Depegging may occur if the peg is causing inflation or if the
central bank is unable to sustain the peg for other reasons.
65. Bloomberg News reported that China and Russia
plan to start trading in each other's currencies to diminish the Dollar's role
in global trade.
66. It's even happening in the USA. Most Americans
don't know that some states in the Mid-West are already using "alternative
currencies". New types of money are popping up in Mid-Michigan and
supporters say, it's not counterfeit, but rather a competing currency. Right
now, for example, you can buy a meal or visit a chiropractor without using
actual U.S legal tender.
67. This would all have been completely unthinkable
10 years ago, but today it's a reality. And this trend is going to keep moving
incredibly fast. That is why the smartest investors are taking action.
68. With all this, the International Monetary Fund
(IMF) published a paper calling for a new global world currency. A paper
entitled "Reserve Accumulation and International Monetary Stability,"
written by the Strategy, Policy and Review Department of the IMF. The report is
dated April 13, 2010 and no, unfortunately this is not just a bad rumour. This
is a deadly serious proposal in an official document from one of the most
powerful institutions in the world.
69. Do you see where this is all heading? This is
why Gold and Silver prices have soared over the last 13 years. It's not a
matter of "if" the U.S Dollar will lose its status as the world's
reserve currency... it's simply a matter of "when".
70. Investor know there are serious problems with
the U.S Dollar, so they are fleeing to precious metals, which have historically
been very reliable when a country has major currency problems. It's not hard to
see why people are no longer accepting U.S Dollars and why many foreign
countries are pushing for a new world reserve currency.
71. I know many of us who are in serious denial. In
the world of psychology, they call this the "Normalcy Bias". The
normalcy bias actually refers to our natural reactions when facing a crisis.
The normalcy bias causes smart people to underestimate the possibility of a
disaster and its effects. In short, people believe that since something has
never happened before... it never will. We are all guilty of it. It's just
human nature. The normalcy bias often results in unnecessary deaths in disaster
situations.
72. The normalcy bias also makes people unable to
deal with a disaster, once it has occurred. Basically, people have a really
hard time preparing for and dealing with something they have never experienced.
73. For example; As Barton Biggs reports in his
book, Wealth, War, and Wisdom: "By the end of 1935, 100,000 Jews had left
Germany, but 450,000 still remainded. Wealthy Jewish families, kept thinking
and hoping that the worst was over... Many of the German Jews, brilliant,
cultured, and cosmopolitan as they were, were too complacent. They had been in
Germany so long and were so well established, they simply couldn't believe
there was going to be a crisis that would endanger them. They were too
comfortable. They believed the Nazi's anti-Semitism was an episodic event and
that Hitler's bark was worse than his bite. They reacted sluggishly to the rise
of Hitler for completely understandable but tragically erroneous reasons.
Events moved much faster than they could imagine."
74. This is one of the most tragic examples of the
devastating effects of the "normalcy bias" the world has ever seen.
Just think about what was going on at the time. Jews were arrested, beaten,
taxed, robbed, and jailed for no reason other than the fact that they practiced
a particular religion. As a result, they were shipped off to concentration
camps. Their houses and businesses were seized.
75. Yet most Jews still did not leave Nazi Germany,
because they simply couldn't believe that things would get as bad as they did.
That's the normalcy bias... with devastating results. We simply refuse to see
the evidence that's right in front of our face, because it is unlike anything
we have experienced before. the normalcy bias kicks in, and we continue to go
about our lives as if nothing is unusual or out of the ordinary.
76. Well, we're seeing the same thing happen in the
U.S right now. They have been the world's most powerful country for nearly 100
years. The U.S Dollars have reigned supreme as the world's reserve currency for
more than 50 years. Things are changing and it is changing pretty fast.
77. Did you know that there are now nearly 42
millions Americans on food stamps? That's nearly 13% of the entire population.
Those numbers are up 17.5% from 2010 and the number of food stamps has gone up
every month. Can a country be in good shape when 13% of the population can't
even afford to buy food?
78. Nearly all of the world's major financial
players are preparing for an alternative to the U.S Dollar as the world's
reserve currency. Take another look at the price of Gold and Silver compared to
the Dollar over the past decade. It's obvious that smart investors want to hold
gold and silver, not U.S Dollars.
79. Any one with any sense or basic understanding of
economics can tell that the U.S Dollar is doomed and it's going to have major
repercussions, which the average American has not yet even considered.
80. So, what can we do? We should try to protect
what we've currently got and also potentially make quite a bit of money as the
currency crisis unfolds. There is a way to protect and possibly even grow your
wealth in the next few years. A series of pretty simple financial moves I
believe you should begin making IMMEDIATELY.
81. Remember, you wont be able to count on the
government during this crisis. Think about it. If the government couldn't even
save the people from floods in some of the states recently, how in the world
will it save an entire country when all hell breaks loose? The government won't
even try to save individual citizens. The government will be much more
concerned with saving itself.
82. If you wait to do these things however, they
will almost certainly get very expensive, difficult, and even impossible to do.
If you do it now, not only will you be better prepared to weather the coming
storm, I believe you could also make quite a bit of money over the next years.
And if I'm wrong, well that's the best part. I think you'll still make very
good gains. Even if nothing happened, you can still set up to do very well.
83. Here's what you need to do for a start: Get Some
of Your Money Beyond the Reach of the Government. I know you won't believe me
when I tell you that the government is going to implement policies to save
itself, which are unimaginable right now. But remember, desperate government
will do very desperate things. They could go to the extent of outlawing the
ownership of Gold. They will change retirement plans, or it might soon be
against the law to open a foreign bank account, or to move your money overseas
without paying outrages taxes.
84. Don't get me wrong. When and if you ever sell
these things, years down the road, you are still required to pay taxes on your
gains. But the great thing is, while you are holding these investments, so long
as you play by the rules, neither you nor anyone else is required to report
them to the government. The less the government knows about your money, the
better. They will simply have a very hard time taking what they don't know you
have.
85. As far as taking care of your money, make sure
you don't lose money too. Now, this is what you need to do: You will need to
Acquire the World's Safest Assets, Which Are Likely to Perform Best During This
Period. What I'm talking about here is buying as much Gold and Silver as you
can reasonably afford.
86. Gold has had a huge run, jumping more than 300%
in the past decade. But believe me, when the U.S Dollar loses its status as the
world's reserve currency, this early run is going to be a mere afterthought.
87. The smartest money managers in the worlds,
people like George Soros, have recently taken huge positions in Gold. And I
think you are crazy not to do the same. Well, what about Silver? For most of
recorded history, the price of Gold has been around 16 times the price of
Silver.
88. I believe silver will serve a unique role during
this currency crisis. This ratio, known as the "silver ratio" has
fluctuated from time to time based on silver discoveries and attempts by
governments to regulate the silver-to-gold ratio. Based on the historical
ratio, with the price of Gold around RM4000, the price of silver should be
around RM200. Of course it's not. Today, Gold is selling for more than 50-times
the price of Silver.
89. Why is Silver still so cheap relative to Gold?
When Silver is "demonitized", as it is now, supplies soar as people
sell silver for gold and other currencies. On the other hand, in periods of monetary
crisis, demand for silver as money pushes the silver ratio heavily in silver's
favour.
90. for example the ration returned to its historic
range (16) during World War I. It happened again in the early 1970s, when Nixon
abandoned the gold standard. It also happened most famously in 1979-1980, when
it seemd as if America was really entering a serious money crisis.
91. Most people don't know this but silver is
actually the best-performing asset of this century. Not gold. Gold has risen
433% since year 2000. Silver has risen to 521%. In short, silver is the best
hedge against a money crisis. As the Dollar fails, Silver will once again be in
demand as money. As this demand materialises , the free market price of Silver
will likely return to around 1/16 the price of Gold.
92. Will you act now to protect yourself and your
family from the catastrophe that's brewing right now all around the world? I
can't promise you that you'll emerge from this catastrophe unharmed, but I can
guarantee that you'll be a lot better off than people who don't grow their
money.
"the major collapse of the US Dollar creating
the biggest international monetary crisis the world has ever seen..." -
Ricardo C. Amaral
"The United States would be mistaken to take
for granted the Dollar's place as the world's predominant reserve currency.
Looking forward, there will increasingly be other options to the Dollar."
- Robert B. Zoellick (World Bank President)
"History teaches us that such inprudent
monetary and fiscal behaviour has always led to economic disaster." - Jim
Rogers
"We've told all our clients that if you had one
idea, one investment, it would be to buy an investment in a non-dollar
currency. That should be on top of the list." - Bill Gross (Owner of the
world's biggest bond fund)
- Master Freddy
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