This Is BAD NEWS for the U.S Dollar
The Federal Reserve is the central bank for the United States.
Its decisions affect the U.S. economy, and therefore the world.
This position makes it the most powerful force in the global economy. It is not a company or a government agency, nor is its leader an elected official.
This makes it seem highly suspicious to many people because it is subject to neither voters nor shareholders.
What do central banks do? In simplest terms, they create money out of nothing.
They create “fake money” and loan it to governments. Taxpayers pay the central bank for this fake money, via taxes paid to the government treasuries. Taxpayers cannot pay taxes in gold, silver, bitcoin, or chickens, only “fake money.” Taxes are one of the primary methods via which GRUNCH controls the people of a country with a central bank.
I’ve wondered why there has been so much controversy around Central Banks.
It’s because Central Banks control a nation’s money supply and determine the quantity of money in circulation by buying and selling debt. Hence, they have more power than governments and people.
Bonfire of Currencies
In 1971, the year Nixon took the dollar off the gold standard, and the “Bonfire of the Currencies” began. What I mean by that is that a person without knowledge and without financial education was having their wealth, their life, and their future was stolen via their money.
Which brings me to Fedspeak. Fedspeak is the language the Fed speaks to lie, cheat, and steal from the world. Mom and pop—the vast majority among us—have no idea how the Fed is lying, cheating, and stealing their money via words. For example:
- Rather than say to mom, pop, and kids, “We at the Fed are going to rip you off by printing money,” the Fedspeak says, “Quantitative Easing.” Unable to understand the words “quantitative easing,” mom, pop, and kids continue to “work hard, pay taxes, and save money” as the Fed prints trillions in new “fake money” out of thin air.
- Rather than tell mom, pop, and kids, the truth that “We at the Fed are going to loot the value of your savings by lowering the interest rates to zero,” Fedspeak lies, saying “ZIRP,” which is code for Zero Interest Rate Policy. Fedspeak is how leaders of the Federal Reserve Bank communicate to world markets.
Fedspeak is how the Fed Chairman delivers Forward Guidance, a cryptic language about the Fed’s intentions and future moves. And because so few people have even basic financial education, they blindly listen to this Fedspeak and hand their money over to criminals.
This is the “Bonfire of the Currencies”—Fedspeak for “Your hard-earned money and after-tax savings are going up in smoke.”
Prior to 1971, a saver could save for the future because the dollar held its value.
Even the Central Banks of the world saved the U.S. dollar because it was as good as gold.
Old Money Ideas
For years, Warren Buffett who is known as once of the market’s best stock-pickers has been telling investors that one of the best ways to invest is to simply buy an S&P 500 index fund and keep a little something in Treasuries to help you sleep well in down markets. He subscribes to the “Buy, Hold, Pray” philosophy when it comes to investing.
Buffett has done very well from 1971 to 2019. Today, I, and many other professional investors, are concerned about the mantra, “Invest for the long-term in a well-diversified portfolio of stocks, bonds, mutual funds, and ETFs.” What concerns us is what 2020 and beyond will hold. As the statement about paradigms goes: “When the paradigm shifts…your past success means nothing.” We believe the paradigm is about to shift.
The coming disaster will be much bigger than the 2008 crash, and yet schools continue to teach students to get out of debt and save money.
New Money Ideas
You already know why saving money is bad advice today. Why save money when the government is printing money and reducing the interest rates to zero or below?
A better plan is to focus on ways to make your money work for you. One option: put yourself on your own gold or silver standard. Rather than save fake money, I save real gold and silver and keep it somewhere safe. Every time the Fed makes its moves—related to QE and ZIRP—my gold and silver go up in value.
The secret to surviving the next few years is keeping your wealth in real money, not in the U.S. dollar. Buy things that hold their value and are exchangeable all over the world. Commodities such as gold and silver have a world market that transcends national borders, politics, religions, and races.
One of the reasons why I’m bullish on gold and silver is because the American public is still sound asleep to this asset class. Most Americans have no idea how or where to buy physical gold and silver. The outlets that sell gold and silver I have visited are already low on inventory.
If and when the American public wakes up to the reality that their dollars are not money, but a currency, the panic, and stampede will begin. Should that happen, today’s prices for gold and silver will look like bargains.
As I write, hundreds of millions of dollars are searching for a safe home, a shelter that will protect the dollar’s value from the crash. It’s unfortunate that during this period, the rich will once again become richer, and the financially naïve will again worker harder for U.S. dollars, doing their best to save as many as they can, only to wind up with fewer and fewer dollars.
Here’s a sobering thought: Never, in the history of the world, has fake, paper money, ever survived. And neither, many believe, will the U.S. dollar. In a few years, I expect there will be another global meeting and money will change. And all those dollars you’ve been saving up may be worthless.
Editor, Rich Dad Poor Dad Daily