Secret Meetings To Ditch The Dollar

By Peter Costa

It is time to re-examine the strength of the US dollar and its dominance as the world reserve currency. Since September 2008 the printing press at the Federal Reserve has been running 24/7 printing and churning out as much money as it possibly can in hopes that the economy will recover. The repercussions for this incessant expansion of the money supply are now starting to set in with the global economy.

During the last 12 months American federal debt has risen by 24.47% and now stands at 83.52% of GDP. FDIC will be running at a deficit for the first time since the S & L crisis in 1991. 120 bank failures (and counting) over the last two years have stripped the FDIC insurance fund of over $52 billion. If the banking crisis isn’t alarming enough the unemployment rate in the United States is now sitting at over 10% with states like Michigan and California exceeding 17%.

With the dollar weakening how does the global economy feel about the future? China has been extremely vocal lately about the green back and has been as bold to say at the recent G20 summit that they want to be the new world reserve currency. They have also announced that they have been secretly buying gold since 2002 and are moving toward a gold linked currency.

In lieu of the failing dollar rumors have been surfacing that China, Russia, Japan, Brazil and several of the most powerful Gulf States have recently been plotting to end the decades-old practice of buying and selling oil in green backs. If the talks continue and more countries join this coalition they could have their way as soon as 2018. As an American I find this extremely alarming and question the stability of our dollar. When countries are secretly meeting up to ditch the US dollar this really speaks to the value of our green back. What is even more alarming is the fact that inflation has not fully surfaced in the United States and already countries are making plans to replace the dollar. One can not help but think that this is an attempt to ditch the dollar before inflation renders it useless. Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which if they have their way will mean that oil will no longer be priced in US dollars and essays have been written on that. The talks have included replacing the green back with a basket of currencies including the yuan, euro and gold. The transitional currency in the move away from dollars, according to Chinese banking sources, may be gold.

“China, Russia and many Middle East countries already have large reserves of US dollars. They want to stop them from expanding any further and are already looking to diversify in other currencies” stated Ronald Fricke president of Regal Assets last week in response to the weakening dollar. He continued to say “Indirectly gold is starting to become the new world reserve currency because globally nobody has confidence in any currency including the dollar”.

Are these sudden secret meetings a response to the already weak dollar or are they a hedge for the coming inflation? If these countries get their way and the US dollar is no longer used in the practice of buying and selling oil this could start the collapse of the green back. Truly only time will tell where things are heading but the more countries that shy away from the US dollar the closer we are moving toward a collapse in the green back. I do not advise anybody to sit around and wait for things to unfold it is time to take the appropriate steps and start protecting yourself from the inevitable before it is to late. Physical possession of gold and silver is a proven hedge against economic uncertainty and is an option I have been taking for sometime now and I urge you all to start pursuing. With gold continuing to set record highs, in less than a couple of years it may become one the scarcest metals to get a hold of as an individual investor.

 Print This Post

Related posts:

1. The Yellow Brick Road- Road to Saving the Dollar?
2. The Truth Behind The Dollar And The Value of Gold
3. Dollar As Good As Gold?
4. Is China The Next Superpower?
5. Why We Should Be Worried About The U.S. Dollar