Gold: The Best Way To Avoid The Dollar Crisis

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Gold: The Best Way To Avoid The Dollar Crisis
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Gold: The Best Way To Avoid The Dollar Crisis by Jeff D. Opdyke, The Sovereign Investor.

The great gold exodus continues.

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Even as the pundits continue to claim gold’s day in the sun is done, countries continue to call their gold home. For February, the Federal Reserve reported that another 13 tons left its vault. That comes after 27 tons exited in January. In all, gold has fled the Fed in two of the last four months (and in the other two months, nothing changed).

And what all of this says is that the central bankers of the world — absent the gold-abhorring Federal Reserve, of course — are worried about the future. You should be, too — because the world is making very clear the fact that you should be buying gold right now.

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Earlier this year, I reported on countries such as France, Belgium, Austria, Ecuador, Finland, Switzerland, Venezuela, Romania and Poland that are either talking about repatriating national gold or have already done so. In addition, Turkey recently reported that it exported 13.5 tons of gold bars to the U.K. in January and February, while the Swiss imported $2 billion in Turkish gold during the same time period.

In most cases, they say nothing of their motivation. But in some instances, as with the Dutch, there are overarching concerns that the U.S. and the United Kingdom — where the Dutch keep much of their gold — face a financial crisis … and that in such a crisis the U.S, in particular, might not be so eager to return the gold quickly.

“It is no longer wise,” the Dutch said publicly, “to keep half of our gold in one part of the world.”

In short, all these countries suddenly repatriating gold from American vaults is a physical manifestation of the greatest threat to the world today: a dollar-centric global financial system that has the structural integrity of a sand castle … and the tide’s moving quickly. Better to have your stockpile of gold back on home turf than secreted away inside the very country that will be the eye of the coming storm.

The Dominoes Are Set

I understand the tired arguments insisting that dollar hegemony will remain. But those arguments are blind to the dots that are connecting. I told you Wednesday about China’s efforts to build new iterations of the International Monetary Fund and the World Bank, and how, with the new version of the World Bank, China is attracting scads of U.S. allies.

Those arguments are also blind to the fear that is clear inside U.S. government. Those at the highest levels of government and monetary authority realize that the King Dollar faces serious existential risks with the power to dethrone the greenback, throwing America into disarray, since the lifestyle we have come to know here at home is entirely dependent upon the world’s demand for dollars in global trade.

When that goes away — and I guarantee with 100% assurance that day is coming — a currency crisis like the world has never seen will rip through your life with the ferocity of a lion taking down a gazelle. In fact, if you’re not prepared for that day, you might come to wish you were that gazelle.

This crisis is exactly what central bankers around the world are guarding against in repatriating their gold.

In a dollar crisis, gold is the invisible shield keeping the slings and arrows from killing you. Your dollars will get crushed. Your dollar-based assets will get crushed. Your cost of living will soar since so much of what we buy today is made overseas.

But as the dollar collapses, gold will soar. More important is the great likelihood that to rectify the problem the Federal Reserve will revalue the dollar relative to gold, putting America on a modified gold standard.

To narrow-minded Keynesians who look upon gold as a “barbarous relic,” the idea of any kind of gold standard is laughable and anger-inducing. But the solution to every previous currency crisis has involved gold in some fashion. And even in modern times, nothing is ever really different … and it will be no different this time.

The One Global Insurance Policy

As I routinely write, gold is the only insurance policy that will protect your lifestyle from the fiscal reckonings that are necessary to right the Keynesian-inspired, debt-fueled wrongs that have brought the world to this point.

It’s impossible to know when the reckoning will happen. It’s only possible to know that it will happen. It has to happen. Nothing that any Western central banker, monetary official or politician can do will prevent the reckoning. They can delay … but they cannot avoid.

So take your clue from all those countries recalling their gold. They are preparing for the storm ahead. You must, too, if you hope to protect your lifestyle and your assets.

That’s why I’m telling you: Buy gold now.

Until next time, stay Sovereign…

Jeff D. Opdyke The Sovereign Investor

Editor, Profit Seeker

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28 COMMENTS

  1. @Paul said “That “call it whatever you want” was an observation about your problems
    with terminology, for which I don’t need permission. If you didn’t
    understand that then you’re simply playing (I think?) dumb.

    Nor did I
    say you lost money, it was YOU who spoke of your family losing in the
    markets. And so on and so on. You’re purposefully “failing” to
    understand the concept of markets and the mechanisms of currency,
    concepts that are taught in any Econ 101 class and none so complex that
    you (assumption here) can’t understand. If you’ve taken Econ 101 then
    maybe a refresher course, even at your local community college.”

    – Notice that in the ENTIRE diatribe above, you failed to refute a single point I made, and went into broad sweeping anecdotal generalizations about the economy and “ad hominem” attacks regarding being dumb, lack of intelligence, and ignorance. You then defer to a blanket defense, in which, given your obvious inability to defend the position of your argument, you suggest I should take economy classes. I encounter this sort of “catch-all, cover-all” strategy you just used all the time, when people are unable to defend the position of their arguments, and out comes the “you need an economics class” statement. These are tools of the trade for your ilk, I liken them to “throw-down weapons” used to cover you when, in the abandon of logic, your need a quick defensive “go-to” strategy. I have an idea, instead of me taking an economics class, how about you use your own words to discredit a single point Ive made, relying on your own knowledge of how these things work.

    @Paul said “You’re right that “free” markets aren’t really free”

    – aha, and here we arrive at the crux of the issue, could it be that we agree on something? could it be that youve seen the light?

    @Paul said “but “forcing” you to “Involuntarily” participate in the markets?

    – for once, ill admit that this might have been improper wording on my part. Instead, what was meant was that, in order to save these investment banks, of which Ive deliberately avoided, I was involuntarily required to assist in saving very markets which wrought this havoc, by way of devaluation of my savings when the central banks printed and injected the liquidity into the monetary system to save the entire machine. (as were millions of other people who likewise have never invested)

    @Paul said “You really need some remedial help understanding the concepts of capitalism, of markets and monetary theory. Go, take a class, cure your ignorance.

    – and here you are again, full circle, right back to “ad hominem” attacks, and blanket, throw-down suggestions of my needing to educate further on the subject. May I respond in kind? I would suggest you familiarizing yourself with the classic rules of debate. Im entirely confident that if our current debate were being officiated, youd be found in sever deficit. Not that I havent enjoyed “cleaning my claws” with you, as it were. And by the way, calling it capitalism is a misnomer on your part, as its widely held that free market capitalism, by definition, would have allowed those investment banks to fail, rather than require their rescue.

    @Paul said “Look, I’m pretty sure there’s no logic that you’d accept because it’s pretty plain you’re being willingly ignorant. There’s no amount of explanation, by anyone, that could possible overcome that, so it’s on you.

    – really? Ive read countless articles from numerous, highly accomplished economists whove cited the very same concerns.
    While Im certain that you could find an equal number of economists to support your lucid ramblings, the main difference would be that my sources have a vested interests in the success of this monetary system as do your sources, yet the predictions of my sources are counter to whats in their best interests, therefore lending credence to what they say.

  2. That “call it whatever you want” was an observation about your problems with terminology, for which I don’t need permission. If you didn’t understand that then you’re simply playing (I think?) dumb. Nor did I say you lost money, it was YOU who spoke of your family losing in the markets. And so on and so on. You’re purposefully “failing” to understand the concept of markets and the mechanisms of currency, concepts that are taught in any Econ 101 class and none so complex that you (assumption here) can’t understand. If you’ve taken Econ 101 then maybe a refresher course, even at your local community college. You’re right that “free” markets aren’t really free, but “forcing” you to “Involuntarily” participate in the markets? You really need some remedial help understanding the concepts of capitalism, of markets and monetary theory. Look, I’m pretty sure there’s no logic that you’d accept because it’s pretty plain you’re being willingly ignorant. There’s no amount of explanation, by anyone, that could possible overcome that, so it’s on you. Go, take a class, cure your ignorance.

  3. @Paul said “You can call it economic Darwinism, you can call it roulette, you can
    call it whatever you want”

    – um, thanks for your permission, I guess!?!? that is exactly what I called it in my last post, as that is what it is. Still, I fail to understand how this statement has refuted any of my previous points, in fact it almost appears to be “de facto” admission.

    @Paul said “your relatives lost in a zero-sum market,
    meaning they were gambling When someone loses in a zero sum game it
    only means someone else benefited by exactly that same amount. Markets
    go up and down, so if you’re trying to time it and you time it wrong you
    lose. It isn’t the market that’s the cause, it’s the gambling. So
    stop complaining about it and if you don’t like losing then don’t
    gamble, on currency, commodities, equities, cards, the horses or
    whatever.”

    – this last statement was a fallacy, Ive never been in the markets,
    so for you to assume that ive lost and are blaming the markets for my
    losses is also a fallacy.

    @Paul said “But ESPECIALLY don’t blame un-associated external factors,
    because bottom line is that you just gambled and lost. So don’t do that
    any more. See how easy that was to fix?”

    – again, Ive never blamed wall street for having lost, because Ive never invested and therefore never lost, however, when the instability caused by inefficiency of that system required my involuntary participation to save via the central banks monetary dilution, I now have a problem with it. again, I will defer to my last statement in the previous post “I never had a problem with this system, or even minded that the stock market makes its gains from others losses,
    until I was forced to contribute involuntarily to supporting the
    markets,by
    way of the central bank shenanigans which went into effect to save the
    failing system ( liquidity injections, and the erosion in my purchasing
    power that ensued.)”

    also, please note the chronological order in which I systematically disassembled and refuted every single one of your points using both logic and reason, I would appreciate a return in kind. That is to say that your capable of rebuttals using logic and reason, rather than being overwhelmed by your inflamed passions and emotions on such subjects. Thanks in advance

  4. You can call it economic Darwinism, you can call it roulette, you can call it whatever you want, your relatives lost in a zero-sum market, meaning they were gambling. When someone loses in a zero sum game it only means someone else benefited by exactly that same amount. Markets go up and down, so if you’re trying to time it and you time it wrong you lose. It isn’t the market that’s the cause, it’s the gambling. So stop complaining about it and if you don’t like losing then don’t gamble, on currency, commodities, equities, cards, the horses or whatever. But ESPECIALLY don’t blame un-associated external factors, because bottom line is that you just gambled and lost. So don’t do that any more. See how easy that was to fix?

  5. “Rated by each other on gold reserves” Bull. They know how much each has, of course, but “rated”? That’s ridiculous. If that’s the definition you want to give to the terminology then they’re also “rated” by their dollar reserves. Equally ridiculous.

  6. my point being this; stock markets only work by the mechanism of the wealthy sharks at the
    top preying on the hopes of the minnows beneath them to one day be
    sharks also. Its simple greed perpetuating complex greed.

    I myself have family who lost big in 1990’s and 2000 I believe it was.
    After losing their savings, they swore theyd never get back in it. Here
    we are again today, and the same dummies are right back in it, just
    cant wait to make those brokers wealthy, and at great expense to
    themselves.

    Truth be told, I dont like the deception involved, but on the other
    hand, I have no issue with wall street taking advantage of the
    perpetually stupid. If they didnt learn from losing their savings
    during the first 3 crashes, then they deserve to be robbed on the 4th.
    an economic form of “Darwinism”, if you will.

    I never had a problem with this system, or even minded that the stock market makes its gains from others losses,
    until I was forced to contribute involuntarily to supporting the
    markets,by way of the central bank shenanigans which went into effect to save the failing system ( liquidity injections, and the erosion in my purchasing power that ensued.)

  7. Thanks, it is not just that I agree. 250 governments around the world are rated…by each other..on gold reserves…you have them or you don’t…rated low/med/hi…and very little has to do with ethnic, language, religion, location, or even military might…just show me your vault; and show me your production ability and the condition of your debt. In 1964 I bought a gallon of gas for 3 mercury dimes…30 cents. The world has changed a lot but if I take those 3 dimes to a coin store on the corner (pre ’64 US silver is 90% silver) I can get enough to buy a gallon of gas today…2015. So yes metals are just a “hedge” a very nice one. If I had saved a bucket full, I would be driving today for 1/7th what the rest of you are paying for gas….rarity is the opposite of a printing press exhausted after rolling out 17 Trillion paper iou’s..two different Value Walks

  8. Yeah? What’s your point, really? That’s the normal ebb and flow of markets, made worse by an idiot free-market anti-regulation nitwit, but actually absolutely normal. Look at any chart of historical (100 plus years) of economic growth, you’ll see those ups and downs, staggering from boom years into busts and back again. That’s the Marxian critique of the capitalist system from 150 years ago, exactly the inefficiency and cost of those fluctuations. And the whole Keynesian philosophy is for government to save during the good times, tempering the peaks, to spend and stimulate the lows, evening things out. In other words it’s absolutely nothing new. And IF you take the time to look you’ll see that those ebbs and peaks occurred when the country was on the gold standard, and continued when it was off. No difference, unchanged. So no relation to gold, and nothing you’ve said has any basis in history, human experience or economic theory. It’s your hope (I imagine you’re long gold) and your alarmist Chicken Little delusions, not much connected to reality except in your own mind.

  9. Paul your last post was nearly identical to your first, and while I’m sure you’re mistaking this for a rebuttal, you have still not refuted any of the facts. in the unlikely event you missed them, allow me to apprise you of those facts; the sky actually did fall in 2008 when deceptively packaged mortgage backed securities combined with fractional reserve banking almost brought down the entire system. in all the studies published and documentaries published since that time, it is widely and largely accepted that the momentum of those inveatment banks failin was enough momentum to pull down the other investment banks in the US and then pull down the investment banks globally, in tandem. after the resulting run on banks and massive drawdown of liquidity and savings that followed, the central banks where required to then bailout the investment banks, artificially suppress interest rates, and print then inject four trillion dollars into the money supply, which is ipso facto proof that the sky did indeed fall, and for many of us is still falling. you yourself have likely found a way through investments to offset, negate, or otherwise immunize and inoculate yourself from the erosion of purchasing power of the US dollar which ensued shortly thereafter.

  10. Real-Time Gold price on http://www.kitco.com shows Gold to now be at $1209 per oz, and up from a triple bottom at $1208 which is the Bullish 0.382 Fib Number for the recent Gold advance from $1185 to $1223 per oz. The next move up, as a measured move, would carry Gold up to $1250 per oz. The catalyst for this near-term advance would be due to either or both of the two recent stories below:

    I agree with today’s Greg Robb’s marketwatch.com article touting the GS viewpoints on the highly improbable event of the FRB ever becoming “confident” that the PCE Core Annual Inflation Rate will ever be 2%. In other words , the FRB is pretending by Texas Bluffing that Inflation , now at 0.3% PCE Annual Core Inflation Rate, can threaten the 2% FRB Mandate in 2015. Mr. Charles Evans, FRB President of the Bank of Chicago, recently with his Staff issued a Paper to the Brookings Institute estimating that mid-2016 is the earliest date for a mere 0.25 % increase in the Fed Funds Rate, which would then climb only “gradually” as per FRB Chair Yellen’s recent comments. I agree with FRB member Mr. Kocherlakota that there is no need to raise the FRB Fed Funds Rate until the 2nd half of 2016.

    Far more important than the above story is the story that just now broke:

    I agree completely with General Wesley Clark, former NATO Supreme Allied Commander, in today’s Internet article; I wish that General Clark had become the Democratic nominee for U.S. President, and then won that election, as he would obviously have done a much better job than Obama. Ukraine’s Mariupol is apparently the key city, which if it falls to the Rebels, will allow a swift Rebel sweep all the way to Odessa, and thereby restore the Russian borders of 200 years ago after Annexation. This would allow the Russian Federation to lay claim to all of the Black Sea Crude Oil, which Crude Oil Drilling Contracts would be given to the huge China Rigs, and also give the Russian Navy another huge warm-water port at Odessa. This would prove to be mortification for Obama, Merkel, EU, and NATO, as per General Clark’s conclusion in this all-important Internet article, which he says is “imminent” (General Clark estimates attack commences between Orthodox Easter of April 12, and Russian VE Day of May 8) ! April 7, 2015 at 10:23 pm PDT.

  11. The standards are already dropping as we speak. So we may as well put it into a plan to grow out of it. It would take a minimum of a decade to recover. No gimmicks just straight economic fundamentals.

  12. A lot of economists and Americans are worried about loss of reserve status of the Dollar. The truth is, it is not such a big thing. The major problem would be inflation and the quality of life. The consequences of the expected chaos should be studied now. The proper authorities need to send people to various developing countries to see how people survive in a tight economy and what needs to be done. It is going to be hard but the gains would be great. The USA would be rebuilding a foundation for another generation. A generation free of debt and the debt-based banking system. Remember the USA would be repaying her debts in devalued Dollars so with time it would be in the USA’s interest.
    There are a few steps that need to be taken:
    1. The government needs to start planning for mass-transportation systems. Lots of trains and economic ways of bringing food items from farms to cities.
    2. Law and order. Poverty would cause crime to spike (experienced this in a developing country). Thus the government would have to organize self defense units and community watches that would help the armed forces to maintain law and order.
    3. Government run collectives. Zimbabwe used this method to survive its crumbing economy. Small farms producing almost everything that would grow. Remember with the droughts so many towns would become too expensive for farming.
    I can go on but have stuff to do. Its not going to be easy but it can be done with careful planning.

  13. The pain would be great but guess what, most of America lived in poverty for the last few hundred years. There were no refrigerators or airconditioners. People will adapt. It may be hard, lots of Mexicans would go back to Mexico, others would also leave but the USA would get better if it starts planning now. The government would need to create think-tanks in every major city. A rebuild mentality would have to be pushed. Racism and race based advantages would have to be erased. People are stronger than they appear. With time, a real strong economy based on hard-work and innovation would replace the chaos in the US. It may not be as good as what the US had in the 1980s but it would be a good life, free from terrorists and international pressures. People adapt. They always do. Look at Africa; are Africans not adapting? What does that tell you about human nature?The need to survive would propel the US above what most economists expect. The US will do good and in a decade, it would become strong although in a multi-polar world which is not such a bad thing.

  14. Someone needs to take a look at economic history. You’d assume from the pablum being slung that the U.S., and every other country in the world, never had an economic crisis when gold was the medium of exchange. Any of you hucksters want to make that claim? Go ahead, I dare you. It isn’t the medium of exchange that affects the course of history, it’s idiotic politicians and short-sighted economic policies. Gold is a metal, and not as useful, rare, or valuable than a lot of other more precious metals whose prices will likewise rise and fall. But affecting the foundations of an economy? No where, no time, no way. That’s pure gold-huckster talk.

  15. Yeah, let me re-phrase that, I’ve been hearing that from gold HUCKSTERS for forty years already. I’d never say that anything couldn’t happen, but likely? About as likely as Godzilla walking up out of the sea and stomping Manhattan.

  16. “The US will start rebuilding factories.” That’s correct!! but it will likely be like WWII: bomb, bullet and gun factories to raze the Eurozone, Japan and Korea again. What’s different this time is that Kiev (Chernobyl) is already a nuclear waste zone. Chernobyl’s vast nuclear cloud blew mostly across Russia and China. The CB’s have already written those two off. Hopefully, the CB’s irrational exuberance with Greenspan’s ‘creative destruction’ can be limited but they do seem to be tipping WS as to what the next trendy industries will be.

  17. Continue to keep your eyes wide shut .. I’m sure the Romans didn’t think their day was to ever come. To say it cannot happen to the US is just plain stupid !!

  18. I’ve been hearing that gold-salesman pitch for how long now? Forty years? Still waiting for that sky to fall, and expect forty years from now I’ll still be waiting.

  19. your forgetting one key ingredient, for the prices to get to high for foreign goods so that factories return to the USA, would require the American people accepting the standard of living similar to those people with whom theyre directly competing. cheap labor else where is available because the worker drones elsewhere have a significantly lower standard of living, than do americans.

  20. Nah, not really, we didnt really just have a near collapse of the monetary system which required massive money printing, and bailouts to save it. the interest rates have not been artificially suppressed for six plus years……but those alarmists will insist this is exactly what happened

  21. I think that the loss of the world currency is going to hurt us much more than the masses realize. There will be no more exporting our inflation. I shudder to think the disparities that will follow. This could have been avoided so easily had greed and human weaknesses not infected our leaders to such an overwhelming degree. I can think of several hard working old farmers that could have led our country in slow, steady, earned financial stability using the principles put forth in the constitution and common sense just as our founding fathers (mostly farmers) shared. The world is run by very successful “business men” that are greedy, corrupt, and self absorbed, what do you expect to happen?

  22. So the strategy is to buy gold and pay commissions and fees to the gold dealer bandits. Wait for the dollar to implode in ten years and then sell the gold to who? The Chinese in China? Get a grip! Now that makes perfect sense to you!

  23. The US will survive the coming collapse. It would go on because the US is not houses, cars or expensive items. The US is made up of one important element; the people. When foreign goods get too expensive guess what will happen, the US will start rebuilding factories. The factories will crank out products after products priced in American Dollars. The products may not be of today’s quality but within 10 years America will regain its lost glory. People would go back to school to learn new skills and jobs will be abundant. It is a cycle although this cycle would revolve around the US Dollar ceasing to be the global reserve currency. The only good thing that would come out of it is, it would curb military adventures. No one would order American soldiers into battle without set goals and objectives, since it would be too expensive and the military industrial complex would have been refitted so as to produce consumer goods for the local American market. Let the rest of the world deal with their own crisis the best way they can. The USA has schools and educated people who would be put to work.

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