Gold
Always believe in your soul
You’ve got the power to know
You’re indestructible, always believe in….GOLD!

Donald Trump shows a strong affinity for gold. He has also shown a keen intuitive grasp of how the gold standard was crucial to having made America great:

 

Donald Trump: “We used to have a very, very solid country because it was based on a gold standard,” he told WMUR television in New Hampshire . But he said it would be tough to bring it back because “we don’t have the gold. Other places have the gold.”

Trump’s comment to GQ: “Bringing back the gold standard would be very hard to do, but boy, would it be wonderful. We’d have a standard on which to base our money.”

 

Trump’s politically unique intuition that “We used to have a very, very solid country because it was based on a gold standard” is no trivial matter. It is true. And as I have written elsewhere:

Former Fed Chairman Alan Greenspan just provided a barely noticed Big Reveal. In an interview with the World Gold Council’s Gold Investor Chairman Greenspan, stating “I view gold as the primary global currency,” went on to explicitly reveal, for the first time to my knowledge, that “When I was Chair of the Federal Reserve I used to testify before US Congressman Ron Paul, who was a very strong advocate of gold. We had some interesting discussions. US monetary policy tried to follow signals that a gold standard would have created.

 

Mr. President: “No such thing as a global currency?” The dollar is the global currency. Want prosperity? Heed Chairman Greenspan and do not just view but restore “gold as the primary global currency.” President Trump: replace the dollar with gold as the global currency to make America great again. We have the gold.

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45% of the world’s population is under 30 and living in an emerging market. It’s a startling fact, and with the population on track to reach 11 billion by 2100, that number is only going to grow.

 

Though the term emerging markets is a catch-all masking enormous variations in economic development there is no doubt that large numbers of young adults are going to face increasingly uncertain times of political and economic unrest.

In the Dollar we trust

In the past 25 years over 21 countries have suffered incidents of severe inflation. In these cases, as the national currency became increasingly devalued, either due to government over-printing or large injections of counterfeit bills, citizens have privileged foreign currency in order to maintain the import of goods.

The U.S dollar, as the world’s leading reserve currency, has been that money of choice. Approximately 65% of all U.S. dollars are currently being used outside the United States, 80% of trade finance was conducted in dollars and close to 85% of forex trade volume involved the dollar.

But dollars are hard to come by in legal ways. Aggravated by limited foreign reserves and fixed exchange rates pegging the national currency at artificially high rates to other currencies, black market currency trading has flourished.

Bypassing government control and regulation, accessible via a smartphone and not dependent on a bank account, bitcoin offers one the most viable alternatives to the prized US dollar in countries suffering from an inflationary monetary policy.

Bitcoin existing independently of a regulating body is what makes it so attractive as an alternative currency.

Not now for all, but some people need it now.

With a current trading price of 1BTC hovering around 2000 USD, the cryptocurrency may still be considered the tech guru’s alternative to the gold rush,

but it is of far more value to those 570 million people seeing their savings chip away day by day.

The debate on whether bitcoin is or isn’t legal tender is of little value to the developing world’s digital natives if it holds up better than the crumpled bits of government-backed paper found in their pockets.

The petrodollar filled the void after the US severed the dollar’s last link to gold as the main prop to the dollar’s status as the world’ premier reserve currency.

So far, the petrodollar has lasted over 40 years. However, the glue is losing its stick.

I think we’re on the cusp of another paradigm shift in the international financial system, a change at least as fundamental as what happened in 1971 when Nixon severed the dollar’s last link to gold.

The relationship between Saudi Arabia and the US hit historic lows in 2016. I only expect it to get worse. Trump is the first president since the petrodollar system was enacted to be openly hostile toward the Saudis.

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The death of the petrodollar system is my №1 black swan event for 2019.

It raises the question: What will fill the void when the petrodollar inevitably dies?

When that happens — and it may be imminent — something has to replace it. I think there are only two options.

Naturally, the global elite want to centralize more power into global institutions. In this case, that means the International Monetary Fund (IMF).

The IMF issues a type of international currency called the “Special Drawing Right,” or SDR.

The SDR is nothing new. The globalists have been slowly building it up since 1969. In the near future, it could be used as the premier international currency — the role the dollar has played since the end of World War 2.

The SDR is simply a basket of other fiat currencies. The US dollar makes up 42%, the euro 31%, the Chinese renminbi 11%, the Japanese yen 8%, and the British pound 8%.

It’s a fiat currency based on other fiat currencies… a floating abstraction based on other floating abstractions.

The SDR is not based on sound economics or the interests of the common man. It’s just another cockamamie invention of the economic witch doctors in academia and government.

The SDR is dangerous. It gives the government — in this case, a global government — more power. It’s a bridge to a powerful global monetary authority, and eventually a global currency.

Most decent people would consider this a bad thing. That’s why the global elite cloud their scheme with dull and opaque names like “Special Drawing Right.”

It’s an old trick. Governments have used it for eons.

The Federal Reserve is an excellent example. After two failed central banking experiments in the 1800s, anything associated with a central bank became deeply unpopular with the American public. So, central bank advocates tried a fresh branding strategy.

Rather than call their new central bank the Third Bank of the United States (the previous two were the First and Second Banks of the United States), they gave it a vague and boring name. They called it “the Federal Reserve” and managed to hide it in plain sight from the average person.

Nearly 100 years later, most Americans don’t have the slightest clue what the Federal Reserve is, what it does, or how it has eroded their standard of living.

I think the same dynamic is at work with the IMF’s “Special Drawing Right.”

The breakdown of the petrodollar is the perfect excuse for the globalists to usher in their SDR solution.

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So that’s the first option. It’s the global elites’ preferred outcome. It would be a very bad thing for personal and economic freedom. It means more fiat currency, more centralization, and less freedom for the individual.

The second option is to simply return to gold as the premier international money. Here’s how it could happen…

Trump might play along with the globalists’ schemes, but I doubt it. He’s the first president who’s openly and sincerely hostile toward globalism. He’s denounced it repeatedly.

Trump recently said, “We will no longer surrender this country, or its people, to the false song of globalism.”

In my view, there’s only one way Trump could fight the global elites and their SDR plan: return the dollar to some sort of gold backing.

Trump has said favorable things about gold in the past. So have some of his advisers.

It wouldn’t be easy. He’d face one hell of a struggle with the globalists. And winning would be far from certain.

No matter what, the death of the petrodollar, just like the end of the dollar’s link to gold, will be very good for the dollar price of gold and gold mining stocks.

When Nixon took the dollar off gold in 1971, gold skyrocketed over 2,300%. It shot from $35 per ounce to a high of $850 in 1980. Gold mining stocks did even better.

Gold is still bouncing around its lows. Gold mining stocks are still very cheap. I expect returns to be at least as great as they were during that paradigm shift in the international monetary system.

What will replace the current bankrupt fiat system?

Gold or Digital Gold in Bitcoin….Time Will tell.

Recommended Further Reading