If the Dollar Collapses, Where Will Your Wealth and Investments Be?

When the dollar collapses, the best place for your money is with you, in the form of gold and silver coins.

A Far More Serious Problem Is Upon Us – The Falling DollarMore lethal to our economy than the 9-11 attacks, which were orchestrated by our government to create an excuse to go into Iraq to grab the oil, has been the falling dollar. That process started about the middle of 2002, and it will continue until the dollar collapses completely. Why? Because the government and the Fed have determined to fail it. Again, Thomas Jefferson said it best years ago, “If you can control the currency of a nation, you can control its people.” The government along with its mouthpiece, the media, has convinced the public that there is nothing wrong with the economy, that we have turned the corner and are headed into a recovery. But the steady decline of our currency until the dollar collapses is a planned event, and things are going south, not north. The unfortunate part is that the public will not wake up until a day after it is too late.

That reminds me of the story of the frog in the pan of water on the stove. As the heat is turned up gradually to the boiling point under the pan, the frog will not make any effort to jump out of the pan to save his life. He will actually boil to his death and not do a thing about it. Unfortunately, that is the condition of the general public in this country. Even though the dollar collapses and signs of disaster are all around us, most people refuse to open their eyes, see what is taking place, and do something about it.

The Fed Plans to Fail the DollarNow that sounds rather absolute doesn’t it? Listen to a true story. In May or June, 2005, I was talking to one of my main gold coin suppliers in New York City. He told me that one evening while he was taking the subway home from work, a very well-dressed, distinguished-looking gentleman sat down next to him. They struck up a conversation about the economy and the falling dollar. The smartly-dressed man started expounding about the Fed’s global economic policies, interest rates, the stock market, currency exchange rates, the rising euro, and the falling dollar. This supplier friend was taken back by the man’s vast knowledge of so many things.

The man went on to explain that the Federal Reserve has a 12 member board, and that six of the 12 members have determined to drop the dollar another 20% to 30% as soon as possible. At that point in time the dollar had lost over 50% of its value.

Furthermore, he explained that if the dollar were to continue to fall at its current rate, within a year and a half to two years we could have a crises when the dollar collapses and it would become completely worthless. The man didn’t give his name, but identified himself as an analyst who worked for the Federal Reserve Bank in New York City. Since that time in June, 2006, the dollar has lost another 10% of its value. So, at this writing, the dollar is worth only 40 cents on the 2002 dollar. What does that mean in practical terms? If you had $100,000 in the bank or in your IRA or in T-bills or in a CD, that $100,000 is only worth $40,000 today in actual purchasing power. And how long before it is worth nothing? Just wait and see, or do something now to turn the process around. But we will deal with that a little while later.

A Falling Dollar Benefits Big Corporations and Reduces the Trade DeficitWhy is the Fed standing by and watching the demise of the dollar? Why is it that every time Bush is asked about the falling dollar he changes the subject? Let’s look at a couple articles, one from the Wall Street Journal, and the other from the Financial Times. In the May 13-14, 2006, Wall Street Journal, the headline reads, “U.S. Quietly Hopes Dollar’s Drop Eases Trade Gap.” The article explains that “the White House is quietly acquiescing in the dollar’s recent slide in hopes of narrowing the U.S. trade deficit.” So Bush is watching as the dollar collapses.

Key quotes in the article reveal a rather bold look at the government’s intent, “But backing currency depreciation can be tricky. The dollar’s slow slide could become a steep plunge if markets turn against it—particularly if investors fear that U.S. officials are trying to engineer a drop.” And another quote, “A falling currency also adds to inflationary pressure at home, a fear this is increasingly rattling financial markets.” Farther on in the article the government’s intent becomes more evident, “Treasury Secretary John Snow and other members of President Bush’s economic team see continued dollar weakness . . . as the best hope for curbing the trade deficit.” And one last quote that sums it up, “If we’re going to get our trade deficit down to manageable proportions, it’s hard to see how that could happen without a very substantial depreciation of the dollar.” Well, there it is – just as the man on the subway said. -- the government is collapsing the dollar.

Who benefits from a falling dollar? -- huge corporations. How? A weak dollar makes their products more saleable oversees. And because the government is in bed with the big corporations, they both stand on the sidelines and watch the collapse of the dollar. The real looser, however, in this whole equation is the middle class. As the dollar erodes away and loses value, the wealth of the middle class is eroded away silently, and nobody pays any attention. It is like that frog in the boiling water.

As the Dollar Falls the Euro RisesAs the dollar continues to fall everywhere in the world, the euro is rising as the premier world currency. In fact, the American news media will never tell us this, but our dollar has been rejected in every country in the world. Every country, even Third World countries demand that we turn our dollars into euros and pay our bills. This process of converting dollars to euros has been going on around the world for over a year. That is one of the biggest reasons gold has been climbing so fast. There is no confidence in the dollar anymore. Nations like Brazil, Russia, India, and China (the BRIC Nations), have been buying gold with worthless dollars and taking physical possession of the metal. That is why gold climbed to over $700 an oz. in such a short time.