Bigworld, Looks like your $10 trillion estimate for the Fed's upcoming balance sheet is accurate.
The question now becomes -- at what point will confidence in the dollar be lost? As a fiat currency, the only 'backing' the dollar has is confidence. Rickards says there is an invisible confidence barrier, beyond which the world will lose confidence in the dollar. And once lost, you're looking at a dollar crisis. So is the invisible barrier for the Fed's balance sheet $10 trillion, 15 trillion, 20 trillion? We're going to find out.
The dollar was in deep trouble after the collapse of Bretton Woods in the early 1970s, but luckily it was saved by the creation of the Petrodollar system. The SDR was also created in that period, but wasn't needed. This time it will be needed, the only question is when.
It might still be a couple years away, but in light of this new reality, the logical strategy for investors is to up our allocations to gold.
