(For some just note the PS)
Couple this article with the last one on GOLD and you may get an additional idea about
why I am heading to China this summer.
Ever try to buy even Canadian Maple Leaf coins recently (the last five years) in the USA?
It almost can’t be done. Most coin shops have none and they say it will take weeks to deliver
and they come with a HEFTY delivery charge, in the neighborhood of 10-12%.
Compare to China, where gold, which the government there ENCOURAGES people to buy,
is available in AL post offices, banks, department stores, etc. My wife and I are taking the limit of
cash over, and having more wired, if you know what I mean. China now also mines more gold than
any other country, including Australia!
Granted, if half the gold has disappeared (I’d look in China and India if I were a detective) then
the price of gold is entirely open to manipulation, and, as the Hunt brothers proved with Silver,
locking up a commodity can have downside consequences. Hence, gold is like an option, you
have to watch it like a hawk, EVEN if you’re in it long term.
It’s simple: if oil starts to be traded in RMB or Euros, or both, the US as a reserve currency is
nailed to a wall and buried. But Doug, you say, 67% of the world’s reserve currencies held by
governments and central banks is in US Dollars. Correct, but don’t you think they will get out of dollars
if HR 2847 (the resolution that went into effect July 1st) uses any part of its provision that allows the US
government to DEFAULT on up to 30 % of its debt actually comes true, that foreign banks will be dumping
dollars quickly EVEN IF THIS HAMMERS THEIR OWN TRADING ABILITY!?!?!?
Note this for research about this stupid and dastardly House Bill:
Thanks, and “good investing”
PS, the PBOC (People’s Bank of China) now has a branch in New York City
(since they hold over 20% of the US house mortgages, this makes sense.)
You can walk in with up to $50,000 a day to trade Dollars for RMB.
I’m just guessing, but I figure some smart pants folks are doing exactly that.
THE USA ranks 22nd in the holding of foreign currency. Nothing like a terrible
trade imbalance to leave the Fed and even IMF without any leeway when it
comes to rescuing the dollar. Ha can you imagine US treasury notes
denominated in RMB or (how’s this for s joke) Euros?
We are Japan 17 years ago. With interest at zero for so long, and no noticeable increase
IN JOBS, who is going to buy the things needed to keep the US economy afloat?
Should interest rates be forced up by our debt holders, won’t we have rising interest
and rising inflation at THE SAME TIME? Won’t this cripple an already decimated
middle and lower class?
Either way, deflation of inflation (I’m betting inflation), the USA is about to head into a depression
worse than the 1930s, and, for those already foreclosed up they are already in one.
The only true way to ensure the continued prosperity of your children and grandchildren is to buy
land and plant food. I will start my pecan orchard in less than a year in the USA, and have
farm land in two other countries already producing solid income. IN one the land will be paid of in
seven more years INCLUDING paying the labor that harvests crops nearly every month. In the
other, the livestock and crop choices assure a major protein supply (Goats, Ducks, Turkeys)
while also giving us a major cash crop (Ginseng).
I traded in the money from the sale of Mom’s Naples house for plantable land.For now it’s a
tiny part of the portfolio, but putting in Pecans after knocking out 3000 trees, selling what I
can of the hardwood and milling lumber for a barn, that will put me “all in” on Mom’s
slice of the pie. (But Doug you’re not a farmer) no but my cousins are and I can read, and
the nursery and Pecan Wholesaler are ALREADY full of tips.
If I’m wrong, the Pecans put out 100% crop for 150 to 180 years, and at right at $1000 per
tree per year, 50 trees is a heck of a stand. If inflation, up go nut prices, he he. If
massive economic chaos, come join us for a pecan breakfast, lunch and dinner.
———- Forwarded message ———-
Editor’s note: Steve recently finished reading a very thought-provoking book called The Death of Money by Jim Rickards. And over the past week, he has been sharing some of the most important ideas from the book. If you missed last week’s essays, you can check them out here, here, and here. Today, he continues the series with a story about…
The Last Time the Dollar Almost Died (It Wasn’t Long Ago)
By Dr. Steve Sjuggerud
Monday, July 7, 2014
“Few Americans in our time recall that the dollar nearly ceased to function as the world’s reserve currency in 1978,” Jim Rickards writes in the introduction to his excellent book The Death of Money.
In short, nobody wanted the dollar back then…
It got so bad, American singer Bette Midler demanded to be paid in gold for her 1978 European tour (as this newspaper clipping from Billboard magazine shows):
“What began as a managed dollar devaluation in 1971, with President Nixon’s abandonment of gold convertibility, became a full-scale rout by the decade’s end,” Rickards writes.
Americans traveling in Europe found that their dollars were not welcome…
Rickards tells the story of author Janet Tavakoli traveling in Italy:
Americans traveling abroad found that restaurants, hotels, and merchants did not want [dollars]… The manager of the hotel asked departing guests: “Do you have gold? Because look what your American President has done.” He was serious about gold; he would accept it as payment.
I immediately asked to pre-pay my hotel bill in [Italian] lire… The manager clapped his hands in delight. He and the rest of the staff treated me as if I were royalty. I wasn’t like those other Americans with their stupid dollars. For the rest of my stay, no merchant or restaurant wanted my business until I demonstrated I could pay in [Italian] lire.
Rickards summed up the situation in 1978: “Foreign creditors no longer trusted the U.S. dollar as a store of value,” he wrote. In 1978, the U.S. Treasury “was forced to issue government bonds denominated in Swiss francs.”
Desperate measures were needed to save the dollar…
The rout of the dollar didn’t end until Paul Volcker took over at the Federal Reserve. “Volcker raised interest rates to 19% in 1981 to snuff out inflation and make the dollar an attractive choice for foreign capital.”
Rickards says a “similar constellation of symptoms to those of 1978 can be seen in the world economy today.” In recent years, the U.S. dollar index hit an all-time low – below the 1978 level. And gold hit an all-time high, around $1,900.
Today, U.S. government debt is at a record high, and the Fed continues to print money at a record pace. There’s no doubt this will end badly, as my colleague Porter Stansberry has predicted. The only question is when. You can’t ignore the possibilities of a potential collapse in the dollar.
In his book The Death of Money, Rickards puts the dollar under the microscope, and then explains the signs to watch for as the dollar – as we know it – heads toward what he believes is an inevitable death.
His book is deep and thought-provoking. Whether you agree with Rickards or not, I urge you to read it…
P.S. We still have some free copies of The Death of Money available. All you have to do is pay for the shipping (less than $5). Along with the book, you’ll get an exclusive bonus chapter written by Jim himself… and a collection of my most recent True Wealth special reports. You can learn more about the book and how to claim your copy right here.
Amber Lee Mason recently showed readers how to buy gold bullion at a big discount… by buying closed-end funds. Amber says it’s the “closest thing to free money you’ll find in the investment markets.” Get all the details here.
“Gold stocks are rallying,” Brian Weepie writes. “But there’s one gold stock outperforming the rest. The secret to this company’s success is simple… it’s a gold miner that doesn’t actually mine gold.” Learn all about it right here.
NEW HIGHS OF NOTE LAST WEEK
Intel (INTC)… Big Cheap Tech
Johnson & Johnson (JNJ)… Big Pharma
Eli Lilly (LLY)… Big Pharma
Novartis (NVS)… Big Pharma
Royal Gold (RGLD)… gold royalties
Franco-Nevada (FNV)… gold royalties
Weyerhaeuser (WY)… timber
Activision Blizzard (ATVI)… video games
Yum! Brands (YUM)… Taco Bell, Pizza Hut, KFC
Coca-Cola (KO)… beverage giant
Constellation Brands (STZ)… booze
Molson Coors (TAP-A)… booze
Walt Disney Co. (DIS)… entertainment
Time Warner (TWX)… entertainment
Netflix (NFLX)… entertainment
Tiffany & Co. (TIF)… expensive jewelry
American Express (AXP)… credit cards
Legg Mason (LM)… asset management
T. Rowe Price (TROW)… asset management
FedEx (FDX)… shipping
Southwest Airlines (LUV)… airline
JetBlue (JBLU)… airline
Spirit Airlines (SAVE)… airline
Royal Dutch Shell (RDS-A)… Big Oil
British Petroleum (BP)… Big Oil
Baker Hughes (BHI)… oil services
Halliburton (HAL)… oil services
Schlumberger (SLB)… oil services
Carrizo Oil & Gas (CRZO)… oil and gas production
Continental Resources (CLR)… oil and gas production
Caterpillar (CAT)… heavy equipment
D.R. Horton (DHI)… homebuilder
NEW LOWS OF NOTE LAST WEEK
Not many… it’s a bull market!