Trump could be planning a radical reboot of the U.S. dollar
Currency reboot will see leading nationsdevalue their currencies against gold
New gold price would be nearly 8 times higher at $10,000/oz
Price based on mass exit of foreign governments and investors from the US Dollar
US total debt now over $80 Trillion $20T national debt and $60T consumer debt
Monetary reboot or currency devaluation seen frequently even modern history
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Editor: Mark O’Byrne
Source: Agora Financial
A new monetary standard which will see the dollar reboot and gold be revalued to $10,000/oz according to best-selling author and Pentagon insider Jim Rickards.
A monetary ‘reboot’ is not unprecedented
Articles about an imminent return to the gold standard are not exactly infrequent in the gold world and it can be easy to become immune to them and dismiss them without considering the facts and case being made.
Many of the articles are not just based one ever-wishful daydreams.Much of it comes from information that is true about today and is then applied to situations that we have seen in the past.
Rickards makes this point himself. A monetary reset is not unheard of. Since the Genoa Accord in 1922 there have been a further eight reboots. The most recent was in 2016 in what Rickards refers to as theShanghai Accordwhich purportedly saw deals done that would allow China to ease without leading to a sharp correction inthe US stock market.
Rickards isn’t the only one who is speculating that there could be some big monetary changes on the horizon. In March intelligence service Stratfor wrote:
Trump may consider unilateral or, failing that, multilateral currency interventions to bring it back downNegotiating a new coordinated monetary intervention
Stratfor’s analysis was considering the threat of a strong dollar on Trump’s plans to reduce the trade deficit. We have recently discussed the danger of political deadlock and uncertainty on the US Dollar and how this will benefit gold.
Rickards’ comments come from a similarviewpoint in that there is decreasing faith in the US dollar. This lack of trust is mainly driven by the more than $100 trillion debt ($20 trillion national debt and another $100 trillion in off ‘balance sheet’ liabilities) in the country and the ongoing dedollarisation by major economies.
Should Trump continue to stumble, disappoint and provoke then we will no doubt see this issue snowball even faster.
No longer banking on debt
The Federal Reserve – America’s central bank – has lowered interest rates and printed nearly 4 trillion new dollars out of thin air since the economic crisis in 2008.
That’s equivalent to nearly one quarter the size of the entire U.S. economy.
The number one consequence of all of this money printing so far hasn’t been inflation at all
It’s been debt.
Total U.S. debt – across all private sectors – has risen to nearly $60 TRILLION
That’s over three times as big as the entire U.S. economy.
If you add the federal debt to that number, you get $80 trillion! That’s more than four times the size of the U.S. economy.
Source: Jim Rickards via Agora
In fact, the Government Accountability Office just reported this year that the U.S. is at risk of fiscal failure.
And Harvard Economics Professor Kenneth Rogoff says, There’s no question that the most significant vulnerability is the soaring government debt. It’s very likely that will trigger the next crisis as governments have been stretched so wide.
And Investor’s Business Daily reports that: Current total debt, at roughly 105% of GDP, is already in the danger zone – and based on historical economic studies, this is where nasty things can happen.
All of this is the result of too much debt too many Obama policies and too much meddling by the Federal Reserve.
But what happens when there is too much debt? The dollar is still relatively strong so does it matter? Yes, says Rickards,‘many countries are relentlessly abandoning the dollar.’
Too much debt to make America Great Again
Countries aren’t sticking around to figure out whether the U.S. can really pay back its debt or wait to see if their dollar reserves are going to keep losing their value
Like billionaire investor Warren Buffett said
People are right to fear paper money it’s only going to be worth less and less over time
And he’s right. The U.S. dollar has lost 96% of its value since the Federal Reserve was created in 1913. Meanwhile the national debt has skyrocketed!
The dollar and debt are two sides of the same coin:
Source: Jim Rickards via Agora
That’s why many countries are relentlessly abandoning the dollar.
Typically most foreign governments invest their surplus or savings in U.S. financial assets.
Global trade is typically conducted in U.S. dollars, too.
The dollar is what’s called the world’s reserve currency.
As one Forbes columnist put it, There is a global currency. It’s called the ‘U.S. dollar.’
But all of that is about to change if the dollar is not rebooted.
The dollar is getting dumped around the globe because of our debt, spending and money printing.
The total amount of de-dollarization is at least:$1.14 TRILLION
But it’s not just the de-dollarization of the world that’s making this so urgent. You see, countries have not only stopped buying U.S. Treasuries but they’re selling them at a record clip.
Bloomberg reports, America’s Biggest Creditors Dump Treasuries in Warning to Trump.
The Economist says,As America’s economic supremacy fades, the primacy of the dollar looks unsustainable.
Trump to call global summit and take control
Rickards believes that the situation of dedollarization will get so bad that the US President will be forced to call a summit of world leaders and monetary authorities.
Using his stature as leader of the free world, he’ll bring the financial leade