Trend Researcher Gerald Celente joins Russia Today on July 1, 2010 to discuss the US dollar and the IMF’s proposed solution to replace the world’s sole reserve currency:
You’re seeing a global meltdown. There’s no way out of this. Everyone knows that Greece isn’t going to be able to pay of its debt. And we just saw today Spain’s bonds being downgraded once again. No, there’s a global financial currency crisis. They’re coming up with another scheme. Just as the Euro didn’t work, now the IMF is going to come to the rescue, put together a basket of currencies for everyone to draw from, and that going to work?
…
We can see a devaluation of the dollar. That’s what we’re looking for, rather than a high inflation. And we believe it is going to happen whether they call a bank holiday or not. In some way or another we’re going to see a dollar devaluation down the line.
Why replace one printing press with ten?
All fiat currencies are eventually doomed to fail, as they have always done throughout history. The Dollar, the Euro and any proposed IMF currency basket will end the same way, because the person and/or people in charge of the printing presses always lose control.
The dollar is not yet ready to completely fall apart. There is a strong indication currently that as assets around the globe are liquidated, capital is flowing back to the US dollar for, ironically, safety.
That capital, upon realizing the US is rapidly moving towards autocratic policies that restrict free trade (i.e. taxes and government regulation) and that US debt has become unserviceable, will just as quickly depart the dollar. It will be around this time that we may very well see a blanket dollar devaluation, essentially wiping out the purchasing power of anyone left holding Federal Reserve Notes.
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It’s a race to the bottom and the last one there wins.
Even gold is really not going to be worth anything.
I am proposing a new currency called the 5BW.
Beans, Bullets, Boards, Bandages and Barbed Wire.
If you cant shoot, Fornicate with it, live in it or eat it. It is probably worthless.
;>)
RED
Celente is calling for a crash this year – but that is early. Not until late 2011 will oil spike and the market crash.   Keep in mind that Obama’s tax increases will not take effect till the first of next year. Late in 11, the stimulus will be gone and unemployment will be over 10%. Either they will have a 2 trillion new stimulus or the S with H T F. Â
Stan I bet your right I think late this year early next. A lot depends on how bad the grain harvest is this year. If you hav’nt check out market Skeptics or noggers blog both a great read may be a link on this site.
Red
Comments…..Fellows, what you see happening today will drag on for the next 6 years, a slow economic death, then SHTF, it will start with a slight spark and pick up pace and rage like a wild fire, a civil war like you’ve never seen in the hisotry of humanity.
Most people don’t realize the stock market reltive to Gold already crashed and continues to do so, today it only takes 8 onces of gold to buy the stock market, in a few years it could reach 12000 and gold could hit 3000 then it will only take 4 ounces.
Celente compares the Dollar and Peso to the Euro , that is a sign of a rookie in economics, the Euro bashing will be over soon, and the snow will melt and will see where the doggie went when it comes to the Dollar. Anyone betting against the Euro is going to lose, it is the next reserve currency, and a united Europe will regain super power status, mighty Rome returns.
Comments…..Whether it happens in the later part of this year or in 2011, the fact is, they cannot continue operating like this. Obumma ran on hope and change, he’s going to need a lot of hope and prayer if he thinks he’s going to get reelected. The way the financial market is going, is no longer sustainable. We have reckless people running this country, and not only reckless but incompetent. We have a community organizer that is so dysfunctional, that I wake up every morning and wonder if today is the day. Whatever happens or whatever the plan, the words “for the common good of everyone” will be used. Bend over, it’s coming!
Personally, I would prefer ‘Mad Max’ to ‘Gulag Amerika’. But if wishes were horses then beggars would ride. I anticipate a long, slow slide into grinding poverty and totalitarianism. Maybe a hit this fall dropping us down a few pegs, followed by further hits along the way on our trip to the bottom. On the other hand, some good news! The uber-rich will be fine, indeed, they will flourish!
Good comments all… I think I would much rather prefer Mad Max to Gulag Amerika as well.
Sam, in terms of the Euro, I think you may be overestimating its staying power. While I am fairly confident that we will see a Euro rebound at some point in the next year or two or three, I don’t think it will survive past this decade.
Like the dollar, it is a doomed currency.
The break up of the EU in its current form is going to happen, in my view. Too many cultures, too many different interests. Right now, the majority of the EU expect Germany and France to drive the entire union… Everyone is on a different page. Unless this changes, they’re gone.
Comments…..Mac, I understand your view regarding the Euro, I would porbably come to the same conclusion if I was to use the data coming out of the mainstream regarding the EU economy.
My view is dependent on a different science, but let me just say this when the ruling empire collapses some body has to take over leadership, now there is no doubt the days of the US are numbered, who in your view is the most likely candidate to lead the world and what currency would replace the dollar.
Sam, Somebody does need to take over the leadership role, that is certainly true.
I have gone back and forth on this in my head for the last couple of years. Will the US survive? Can Europe takeover? How about China? Or perhaps a mixed, global conglomerate of some type?
At this point, I cannot make even an educated guess definitively, perhaps because I am not educated enough to make such a prediction or forecast.
There are so many variables out there….
My biggest concern is that we may very well see a World War III scenario, and if this is the case, then ALL BETS ARE OFF. To the victor go the spoils. This is probably the single biggest factor in what will happen in the future in terms of a reserve currency, in my opinion.
If the world avoids a world war, then for a number of reasons, I think there will be an attempt to move to an international reserve currency likely based on other currencies. Though that is doomed to fail as well, I believe they will still try this. Perhaps they include gold in the mix or some other commodities, but I think the push will be for a global currency.
I understand your point regarding the Euro.
If I look at the failure of the Fed’s dollar policy, I can see that the dollar in its current form will likely be destroyed before this is all said and done. So the dollar can’t be it, unless something very drastic happens.
In regards to China and Russia — nobody wants the commies’ currency to be the reserve.
Currently, that leaves only the Euro as a possibility, but as mentioned, I believe that currency is going to be worthless as well.
This is why my current view is that the most likely scenario is a multi-currency international reserve of some kind.
As you can see, I am still see-sawing here. This is a tough one.
Wow! Amazing! Mac’s comments and articles are just awesome and then all you guys with diverse opinions come in here and give us little slices of reality and opinion. I just want to repeat what I’ve said before: Giants Post Here!!! I certainly don’t agree with some of what is said but it is always said in earnest and with a backing of fact and honest thinking.
Sam,
I really want to know why you think the Euro is going to be worth anything? I think fiat is fiat and though it might be, as one commenter says “the last one to the bottom”, it is still fiat. Until someone pegs their currency to gold or silver, all currencies are screwed.
Tell me this: why doesn’t some country (Canada… Australia… Mexico…) simply peg their currency to gold. If they did, they’d gain instant reserve status, wouldn’t they? Or is my thinking too elementary?
-NR
Ranger,
Great question.  I wonder the same thing. Seems like who ever connects to gold would have a head start……..
They won’t go to the gold standard for one reason. Â They would no longer be able to spend willy-nilly on whatever new thing politicians wanted. Â Remember, the gold standard was abandoned during times of war (US Civil War, WWI, and lastly WWII) to allow unrestricted spending on wartime goods.
Being on the gold standard means that you actually have to have that much gold in reserve. Â No gold equals no money. Â The only way to add “new money” to the system, is to go out and pan for it (or use cyanide leaching and create another toxic disaster).
The other thing is that gold is (actually) real money. Â That means that everyone would earn gold (in whatever amount) as their earnings. Â Right now, you just get issued (phony) un-backed paper money. Â Gold (or gold-backed paper) would be used for nearly all purchases. Â This would not allow the sort of wealth concentration seen in the US (and other industrialized nations) in the last 60-70 years. Â Now, 1% of the population controls upwards of 85% of the assets in the US. Â This would not be possible with the gold standard (lack of money meaning mass starvation, among other things), and that 1% is not going to give up the money. Â You can just forget that. Â They stole it, fair and square.
The deal is Gold is in itself does not have that much value.
For instance we have a food shortage for whatever reason.
All the gold in the world may not buy more than a few pounds of food.
I am not saying to get a little gold. I keep just a bit around.
But in the end I would invest in things that will make you more self sufficient.
See my first post the 5bw or whatever you want to call it.
Red
My investments are diversified. Click my name to find out. One thing I never thought of, though, is barbed wire. Hmmmm… I’m looking into that.
Red,
Your idea about the 5BW currency sounds good. I guess my idea was not to have a gold based currency, but, simply to peg the value of your currency to gold. But, I guess you would have to have a certain amount of gold to back it with and since everyone (especially the USA) is broke, thats not gonna happen.
Johnny V,
I knew most of that. I do understand that worthless paper allows them to cheat everyone that has the money or is holding it. It is how they transfer and steal.
I would correct your grammar. They stole it unfair and crooked and they’re not giving it up, however, what they have is soon to be totally worthless.
I have an idea that soon, there will be a currency of local notes. Some cities are trying it now. Its called local script. Give me a meal from your restaurant and I’ll trade you a note for an hour of computer repair. But, what if the restaurant doesn’t have a computer? They keep the script and trade it and 2 engine tuneups for a side of beef and so on.
So whats the answer then ?    Whats the longest any “currency” has lasted ?  Seems that gold/silver will have to have a play in what ever the answer is.
I agree totally, if SHTF then all the gold you own might not buy a bag of beans.  A lot of interesting things still need to be played out. Wild times ahead ………
Comments….. Before I go into details of my theory, I have three question which any of you can answer.
1. Define money
2. Why is gold real money
3. Why was it take out of circulation
Whats the answer? That varies with the times. But, for the times ahead, I would be sure I have enough food to eat for a year and guns to protect it. If I had big excesses of value (cash) I would convert most of it to 80% gold and 20% silver bullion after you store enough food. Stay away from coins. WTSHTF everything will be seen as bullion.
I keep hearing people say, “Gold and silver won’t be worth anything once TSHTF.” I agree 100% with that statement! That is why you need to heavily invest in the other stuff. However! If you have large excesses of cash, you should convert them to gold and silver. Why? Eventually they will be worth something. If you keep the value based in US Dollars they will be notepaper. Immediately WTSHTF gold and silver won’t be worth anything. Its simple supply and demand. There will be lots of demand for food and little for gold. When things get straightened out, that will change. …and it will get straightened out. It might be 10 years. It might be 100, who knows, but, your gold will be worth a lot of money again, eventually.
I think what the people that are saying, “Gold will be worthless…” mean is that you shouldn’t depend on it to buy you security during a SHTF situation. Immediately after TSHTF, a pound of gold might be traded for a pound of rice.
The smart investor will have a huge stock of rice and readily trade rice for gold. Once the SHTF scenario starts correcting itself, the gold will become valuable again and you just made a killing.
5BW will be much better in the short term immediately after TSHTF. (Redgypsy’s term…) My term is the 3F principal: Food, Fuel, Firearms. If you have enough of all three, you’re set for a while which will hopefully give you time to become self sufficient or for the system to correct itself. Just remember: Food and Fuel both go bad over time.
1. Â Money is the accepted unit of exchange within a society. Â It facilitates transactions more easily than the “barter economy”. Â Example, if I have a pig, and you want it, but you have only two tires, and I need 4, I don’t have to cut the pig in half. Â You just give me as many “dollars” as it would take to cover the purchase price of the pig. Â Money is a construction of convienience.
2. Â Gold is real money for several reasons. Â It is in relative scarcity, and obtaining more of it is very difficult, which means that the market will never be flooded with it. Â Furthermore, gold is impossible to counterfeit. Â Lastly, every civilization on Earth recognizes the value of gold.
3. Â The gold standard was abandoned to facilitate borrowing by the government. Â They needed to spend money they didn’t have. Â Since every dollar was guaranteed redeemable for a quantity of gold from the federal government, the only way out was to de-couple the currency from gold. Â In other words, there would be more currency in circulation than could be backed by gold, however, the people were told that “our currency is backed by the “full faith and credit” of the United States Government”.
We could go back to the gold standard, but that would mean shrinking our economy down to the equivalent of 147.3 million ounces of gold. Â Of course, then our creditors might come looking for their money.
It’s interesting to note than when Jimmy Carter left office in 1980, the United States was the worlds biggest creditor. Â We had lent money out to everyone, and everyone owed us. Â When George Bush left office in 2008, not only were we no longer the worlds biggest creditor, we had become the worlds biggest debtor. Â We have borrowed from everyone, and we owe everyone. Â Going back to the gold standard is no longer a realistic option for the USA.
Comments…..Jonny v. I’m impressed , Â you got one answer right. As for the first question you answered what money is used for but not what money is.
1. Money is the true measure of labor(Adam Smith), so in order for me to trade my two tires for one pig, that would mean it takes the same amount of  work to raise the pig as it does to make two tires.
2. Gold is real money because it stores the labor it takes to retrieve it in a convenient currency, so if takes as much work to mine one ounce of  gold as it takes to raise one pig and produce two tires then a ounce of gold will buy either of these two things , that ounce of gold will always have the same purchasing power, price won’t go up or down not now or thousand years from now, and I don’t have to carry two tires in my back pocket in order to buy a pig. But lets just say things change and  it takes twice as much to mine the ounce of gold as it does to raise one pig, then my ounce of gold buys two pigs. Therefore money is the measure of labor stored in a convenient ounce of gold.
3.Gold was taken out of circulation by the people who lend the government (parasites), in order to tax the shit out of the people to pay the interest, why the government would give up the right to mint it’s own currency is beyond me, but again there is never a shortage of traitors willing to sell out their people. Not only do they lend the government but the people as well, the same people print money out of thin air and lend it to you in order to buy a house, boat, expensive car etc, things you can’t afford in order to charge you interest so you’re labor equals zero so you will always have nothing, they call that slavery no? In some of the third world countries I visited they don’t understand the concept of a mortgage, young people live stay living with their parents while they are building their home, sometimes it take up to ten years, but they build what they can afford, and get married and move in when it’s done. They consider their homes sacred no one can lay a hand on it, not the bank or government, they will die fighting for it, but if it’s not paid for by hard sweat it’s easy to let go of it and move into a tent. The elite say we should remove gold away from circulation because there is not enough of it around to fulfill the wants of the people, I always walk around whispering under my breath “I shall not want”. ” Want and distractions are the worst kind of evils” (Plato).
So if money is the measure of labor, and we use that labor to mine gold, then we take that stored labor and spend it on whatever we like, tires, pigs, houses, cars, etc but if there is no gold around we can still exchange our sweat by trading two tires for one pig.But in order to expend this labor we must stay healthy, therefore true wealth is your health, and a sound mind only exists in a sound body.
For that reason the Euro will survive, it’s mostly backed by gold, Fort knox was emptied a long time ago, from 1981 till 1991 Canada’s gold reserves were all shipped to Europe, there is enough gold in that country’s vault to run it for two days when SHTF. England gave up it’s gold reserves in 1999 at $255 dollars a ounce. The worlds gold is concentrated in Europe, the elite believe that their king shall rise from there not realizing that Europe is destined to destroy them. Just like Pharaoh he raised Moses under his own roof not realizing he’s destined by the almighty to kick his ass.
@NetRanger: Â Good looking photos, but was wondering, what’s the point of the rolls of dollar coins? Â I get the other stuff. Â Thanks.
1. Define money
2. Why is gold real money
3. Why was it take out of circulation
Those are discussed in some detail and at length here:
http://www.grabtheapple.com/forum/the-economic-crisis/how-to-protect-your-savings-from-the-collapse/
I posted a number of SHTF links on that website, thought I’d do it the other way.
Yeah, NetRanger I see you’ve got your stack of silver. I’ve needed the cash lately and unfortunately have sold off about 70 or 80 troz in the last couple of months.I’m not out yet, but it still kinda blows. I hope to at least rebuild some of it in the near future.
I would argue that gold and silver are simply a standardized barter system.Sure you can call it “money” or “real money”. To me its just another word. Sounds nice. Gold, silver, copper, and nickel are all convenient commodities to use as a sort of universal barter substance.But ultimately your still bartering one substance for another. Don’t get me wrong it makes transactions much more equitable and allows for greater divisibility of one’s wealth.
What I’ve always thought about a “gold-standard” was that it was simply another form of fiat and that there was really nothing to stop the holders of the so called gold reserves from cooking the books. Without actually physically transacting in the metal, there is no way that such a system could truly be honest and transparent (simply another confidence game).Good day.
Comments…..I have been reading this for sometime now and want to thank so many of you for helping me prepare. A little off track but I just wanted to know if anyone had heard about the the DA in Jackson Co WI. I’m glad to see that their is at least one good person in government.
http://www.co.jackson.wi.us/html/district%20attorney/Documents/McDonald%20vs.%20City%20of%20Chicago.pdf
Hermes,
I think you have the key! Gold and silver are concentrated and more permanent methods of transferring value. Certainly it is NON-fiat in that you can’t, at will, increase the amount you have without effort. In other words, the scarcity of gold is not the only thing that makes it valuable, it is also the amount of work it takes to acquire it. But, you are correct, essentially, it is just standardized barter.
Dishonesty has not borders and nothing is immune to it. Gold, Silver, Lumber, Labor, Firearms, Oil. Its all subject to the holders or users scrutiny and honesty. Certainly “money” is standardized barter material.
I still hold that if you
Can’t eat it.
Shoot with it.
Build with it.
Or Fornicate with it.
It is in some form a fiat currency.
*****
As a direct descendant of a Holocaust survivor (My Father/Grandmother. My Grandfather did not survive. The Nazi’s did not just kill Jews.)Â I can assure when SHFT Gold won’t count for much.
If you don’t believe me read the this passage then look it up and read the whole story.
2 Kings 6:25
25 There was a great famine in the city; the siege lasted so long that a donkey’s head sold for eighty shekels of silver, and a quarter of a cab of seed pods for five shekels.
May god bless each of us
RED
Comments…..I have an idea that soon, there will be a currency of local notes. Some cities are trying it now. Its called local script. Give me a meal from your restaurant and I’ll trade you a note for an hour of computer repair. But, what if the restaurant doesn’t have a computer? They keep the script and trade it and 2 engine tuneups for a side of beef and so on.
!!!!!!!!!!!!!!!!!
I didn’t know that’s what it’s called–I call it bartering and trading and predicted last year, if this depression continues, we will be doing just that!
Comments…..Dont worry about currencies or so-called money of Central banks. The issue is credit. Credit is belief. A form of faith that a person has the desire or intent to keep their promise to pay as agreed. This promise is based upon such factors as truth in dealing and honesty in representations and confidence in corporations and courts and government. When the courts and government and corporations are percieved as hateful or absurd belief ie credit breaks down. Any body watching the mortgage foreclosure financial shock wave of collapsing belief? How soon before the absurd and hateful cohort of banks and government and corporations actually take weapons against the people to try and protect their status.
Sam, what exactly puts Europe in better economic shape than the US? (More business = no, less government = no, less debt = no Spain? Greece?) Why the optimism?Â
Great comments guys!  I am thinking that we should be considering 2 scenarios – Bad and Worse.  Depression level and even WWIII would definitely be BAD.  WORSE would be dissolution of the states, riots, anarchy, etc.  Under the BAD scenario gold, silver, any commodity would be of value as would food.  Food would be obtainable and medicine.  I think the big ticket item is medicine.  Just think of what a medicated society we are – how may folks depend on “their pills”, etc.
One final thought: Â “What you can’t buy with gold and silver, you can buy with lead”……..
Comments….. The United Nations will step into the vacume and take control. As long as the US is strong ,the UN can not move foreward with their goal of world control and population control. ( Read Agenda 21). But if the world is reeling from the destabilized economy and the US is broke from wars, mismanagment and rampant spending, we won’t be able to stop them. Look at the banner for the US Navy: “Americas Global Navy” When did we change from the US Navy? Look at what our school children are being taught: being a global citizen is more important than being a national citizen. Look at the Patriot Act that removes the rights of any US citizen accused of a “ possible” terrorist act. No call, no hearing, no arrest warrent needed and you are gone. If we need an act like that why is the southwestern border WIDE open to the world? Look at the repeal of Posse Comitatus Act that prevented US military from engaging US citizens on US soil. Why is that gone? Look at the law that allows Canadian soliders to be called to the US (2005). Look at the directive for the Reserves and National Guard that has them answering to the United Nations. The list goes on and on. And you could argue that most of it appears normal or is for perfectly normal reasons. But you can’t explain why the Posse Comitatus Act was repealed. Out troops should never go against the citizens. That would be a violation of the Constitution. Â
The list of reasons why I say this is much longer but you get the idea. It looks like the government is being set up with laws that allow it to fight the citizens. Why would this be allowed?Â
And who controls the UN Security Council? They have been primarily mideastern in the past. How are they looking right now? Do you want a middle eastern controlled UN running the US? The entire world is struggling with this economic situation but who is still stable and powerful? Who has the money? That is where you should look and it is not the US, Europe or Russia right now. China? Maybe if the try to capture the energy they need. But I say look at the middle east. Their politics and religion dictate world dominion. And they have the money and the oil.
Truly an excellent, informative thread! Thank you one and all, and a special thanks to Sam. It got me thinking.  In my case, unfortunately, due to my wife fighting cancer, so far successfully, I no longer have the large funds to secure precious metals. Living in a small town in a rural area of Central California makes food our medium of exchange. Instead I have collected items of intrinsic value, things I could use if TSHTF, three vehicles paid for, firearms, ammunition, a years worth of food, hundreds of gallons of water, camping gear, first aid kits, water filters, generators and fuel, heaters and propane, firewood, medications of all sorts, literally enough to start a small store.  Which may be in my future, who knows?
Comments…..Kent H, thanks for your comments.When I read it I wondered how you knew exactly what I have been doing to get prepared:) You did remind me I needed to get more firewood. I have been relying on propane tanks for heat and hot water. I do have a small woodstove and some oak trees but have a few cords cut and stacked ahead of time would be better. The most gasoline I have stored is about 100 gallons.With generator and 4WD vehicle that is not enough.
I had  a drum of diesel for my tractor but I sold the tractor.So I tried burning diesel in my “kerosene” wick lantern and it burns fine! Easy choice since kerosene is $42 per 5 gal can and diesel is $4.30 a gallon. For my next project I plan to build a cheap passive solar water heater and outdoor shower. It gets hot here for most of the year so I think I can save money by using
coils of black drip irrigation hose instead of expensive copper pipe.
Lots to do before TSHTF.