Wave Good-Bye To The Dollar’s Reserve Status

“Paper Money Eventually Returns To Its Intrinsic Value – Zero” – Voltaire

Set aside all other financial, economic and political concerns continuously shoved in our collective faces by the mainstream media.  It’s a distraction – to a large degree intentional.

These are the ONLY events that matter right now:    this, “China Begins To Reset The World’s Currency System,” and this,   “Venezuela Is About to Ditch the Dollar in Major Blow to US: Here’s Why It Matters.”

Once the dollar is no longer regarded or used as the reserve currency, third-world poverty will engulf everyone in this country below the upper half percent wealth stratum…except those who possess a fair amount of physical bullion.  I just bought more gold and silver coins from a friend yesterday who had an uncontrollable urge to get their house painted and needed to sell some to me to fund it.  It won’t matter what the house looks like in a couple years but they would never take my word on that.

The level of assumed entitlement in this country by the middle class is absurd…

All the money and all the banks in Christendom cannot control credit…Money is gold and nothing else – JP Morgan’s 1912 Congressional testimony on “the justification of Wall Street

Trump has suggested permanently removing the Treasury debt-ceiling. The Treasury debt-ceiling is the last remaining barrier to the ability of the Fed and the Government to create an infinite amount of fiat currency.  Debt that is issued behaves exactly like printed currency until that debt is repaid.  The non-repayment and continued issuance of the amount of debt outstanding is the critical point to understanding this concept.  Since the early 1970’s, the Treasury debt outstanding has grown continuously.

Printed Treasury certificates created in this manner behave no differently than printed currency. This is a reality that economists completely ignore.  Most analysts who think they understand monetary economics look upon this concept with disdain. The continuous issuance of an increasing amount of credit of any type is no different that outright currency printing (until the amount of outstanding credit is paid off, which it never has been since the demise of Bretton Woods in 1971).

Removing the debt-ceiling gives the U.S. Government, in conjunction with the Fed, the power to print an unlimited amount of Treasury notes. Historically, a large portion of these notes have been funded with recycled petro-dollars. The “QE” implemented by the Fed funded $2.5 trillion of the Treasury issuance.  I don’t know where the funding for the next round will come from unless the Fed prints a lot more money.  I suspect it will. The price of gold (and silver) spiked-up on Friday in correlation with the announcement of Trump’s proposal.  That’s your warning shot

20 thoughts on “Wave Good-Bye To The Dollar’s Reserve Status

  1. I think that in Simpson’s there was something about president Trump leaving USA with large amount of debt. Wha it a prediction or was this just revelation of a plan?

  2. In his testimony Jp Morgan did not say “Gold is money and nothing else” but the reverse “Money is gold, and nothing else”.

    Here is : Page 50

    Q. I want to ask you a few questions bearing on the subject that you have touched upon this morning, as to the control of money. The control of credit involves a control of money, does it not?
    A. Control of credit? No.
    Q. But the basis of banking is credit, is it not?
    A. Not always. That is an evidence of banking, but it is not the money itself. Money is gold, and nothing else
    Q. The basis of banking is credit ?
    A. Yes

        1. “Gold is money and nothing else” means that gold is only money, but other money can exist. -> the definition of gold is money
          “Money is gold and nothing else” means the only money who exists is gold, there is no other money. -> the definition of money is gold.

          Mr Rickards for example talk all the time about “form of money” “Dollar, Bitcoin, SDR etc…” He is wrong.

          Gold has a value before becoming a money.

          Its supply is controlled or limited,
          It is fungible/uniform – this is why diamonds cannot qualify,
          It is portable – this is why land cannot qualify,
          It is divisible – thus art cannot be money,
          It is liquid – this means people will readily accept it in exchange.

  3. When the inflation that America has been exporting globally for decades finally comes home to roost, expect a lot less for a lot more. Can you say “hello” to crappy dollar store merchandise, but with Neiman Marcus pricing, boys and girls?

    1. No opinion. Have not read his article. He does great forensic research. Wouldn’t surprise me if the main banks that own the Fed are loaded up on physical gold and silver that is safe-kept in Singapore, HK and Shanghai.

  4. One thing needs to be corrected. JP Morgan did not say “Gold is money and nothing else”. He said “Money is gold, and nothing else”. The misquote, “Gold is money, and nothing else” just asserts that GOLD is money and that is all it is. The misquote does not exclude other things from also being money. But the correct quote, “Money is gold, and nothing else”, asserts that only GOLD is money and nothing else is money but gold. Of course one could disagree with JP Morgan since historically silver is also money.

  5. That’s right. The US government will increasingly have trouble finding buyers for Treasuries, and will have to finance trillions in debt by printing money. The precious metals will go ballistic. I would strongly urge everyone following this discussion to get out of the dollar, bonds, stocks and bitcoin. Get into the precious metals now while you still can at these very reasonable prices. If you miss this train you may not get the opportunity to catch another.

  6. They probably will not permanently remove the debt ceiling because, practically speaking, it does not exist anyway. After all, if they can continuously raise it, then the barrier is entirely illusory and serves an entirely different purpose: to extort the debt-addicted public of more of their liberties through the empty threat of shut-downs.

    So far, the illusion has worked beautifully, so it may actually be a good thing if Trump succeeded in getting rid of it. I am sure others will disagree; that’s fine. Ultimately, there needs to be a real barrier, or none at all. Phony ceilings be damned.

  7. The debt ceiling is a leftover from happier days gone by, before Obama when the U.S. gov’t would actually vote on a budget. Now, of course they were always cheating on it around the edges. But that was the origin of the concept.

    What’s infuriating now is that the media will talk about the debt ceiling but never mention that the U.S. gov’t hasn’t passed an actual budget ,as Constitutionally required, for several years now. I’m sure that most people just assume that they do but they haven’t for several years.

  8. That was nice trick , they fooled many with their ” Recovery” and they had 2 years to buy as much as they could with the dollar high around the whole World.
    Now there is one only direction for the dollar , only down. No more fooling.
    Money is gold

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