ombow: Any fiat currency not backed by gold is essentially backed by nothing. Combining multiple fiat currencies into a basket would not be enough to stabilize the world economic system. The SDR weighting will be based on verifiable quantities of gold backing. Which is why nations like China, Russia, and others have been stockpiling Gold by the ton. Currencies backed by gold will have greater weighting in the SDR basket if that is what the IMF and the largest trading nations come up with. And I'm not even sure if that will be the final answer. But what I do know is that the era of Dollar Dominance that we have enjoyed since the end of WW II is coming to a close. This virus crisi was the match that lit the fuse to debt bomb that is going to bring the Dollar to its knees eventually. The Fed's balance sheet is up over $5 Trillion for the first time in history. And they are just getting started. They are going to create money out of thin air to buy corporate bonds, bond ETFs, US Treasuries, corporate stock, bail out states, counties and cities, provide extended unemployment to tens of millions affected by this crash, bail out small businesses, mail checks to every citizen making less than $96 K, and who knows what else. That's at least another $5 Trillion right there. In this week alone the Fed has unleashed as much QE as they did in 7 MONTHS during their QE 3 period. Watch the DXY, the US Dollar Index. It briefly rose to over 103 and has been slowly eroding ever since. It's back down to 99.26.
So convinced am I that the Dollar is heading to worthlessness that I am cashing in a $100 K Life Insurance policy for the current cash value of @ $50 K. I'll put the entire amount in the Euro Pacific Gold Fund so I can segregate those funds to be able to track them over time. But unless I'm way off base that $50 K today will eventually be worth way more than $100 K denominated in US Dollars. Furthermore, the insurance company (Equitable) might not even be around by the time I die. Insurance companies hold portfolios made up largely of blue chip equities and Government bonds. The yield on government bonds is essentially zero. And equities are only in the third inning of the great Crash of 2020-2023. Equities will eventually drop at least 80% from the highs of late February. So insurance companies and most pension plans will be rendered essentially bankrupt. they won't have enough assets to pay claims in the future. And they will be hard pressed to cash flow the difference by raising premiums because people won't have any money. Collectively people have relatively short memories. Very few people alive today remember the crash of 1929 and the aftermath of the Great Depression. My parents lived through it and told me stories. I've read about it extensively. The American's of today, actually the citizens of most of the world, have no idea how bad things are going to get. Once the Dollar collapses our standard of living is going to drop drastically. We spent tomorrow's money over the past decades by racking up unpayable debts. We forgot that debts are not assets but rather they are liabilities. We consumed above our means for decades. And there is going to be a price to pay for that. Contrary to what our clueless politicians think there is no Money Tree or Money Fairy to pay for it all. I don't welcome the prospect. But I can do math. Reality is in the process of biting us good and hard right in the ass.
