The most dangerous time since the Civil War

[Galen]

(01-14-2018, 06:22 PM)pbrower2a Wrote:

(01-12-2018, 04:38 PM)Galen Wrote:

(01-12-2018, 10:14 AM)Kinser79 Wrote: Yes.  Both Galen and I have mentioned numerous times that the petrodollar can, will and eventually must end.

I would also add that it means the end of Pax Americana because it will no longer be possible to print or borrow enough money to cover the Federal Governments obligations.  It remains to be seen if there will be a formal default since there wasn't one in 1971 even though that is effectively what Nixon did in terms of the Bretton-Woods agreement.  Gary North refers to the upcoming event as the Great Default.

Resumption of the gold standard would imply a hyper-deflation. One would need a "new dollar" to reflect the current $1339.50 per ounce value of gold. That would require almost a 20-to-one revaluation to have a dollar 'worth' what it was in 1970 at the value of gold at the official exchange rate. That would make a mess of banking.

Gold fluctuates wildly in value, often reflecting political instability (people in political orders at risk of overthrow  tend to invest in gold) and stability (people selling gold after the revolutions). Supply spikes are always possible.

Prices always fluctuate during political instability.  So what?

Banking is already a mess which is hardly news.  The current price in gold reflects the steady devaluation of the dollar since 1971.  Nixon didn't want to fix the Federal Government budget then and now we have an even bigger problem than he had.  In the end all fiat currencies revert to their intrinsic value which is zero and the dollar is well on its way.