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Protecting Yourself Against the U.S. Dollar Collapse

September 28, 2004

Though I have been preaching for over three years that the U.S. dollar will slide due to excessive budget overruns and trade deficits, two main stream banks are predicting very rapid declines for the dollar over the next 12-24 months.

In January of 2003, the U.S. dollar would have bought $1.57 Canadian. Today the greenback will buy you just over $1.27 CDN. However the TD Bank is projecting that the U.S. dollar will be worth just $1.20 CDN within 24 months and the National Bank of Canada is projecting the USD will buy just $1.18 in just 12 months time.

This means that readers of the Growth Stock Report will stand to get a double whammy benefit as our resource stock picks are all traded in Canadian dollars.

And though the banks didn't say it, this also implies that the price of gold should go up.

The ultimate battle here is the value the market place gives to our fiat money system versus the free market value given to gold. The evidence which suggests that the so-called free market in gold has been manipulated by outside forces aligned with the global bankers isn't surprising for students of global banking practices.

I remember reading a quote from the founder of the Ford Motor Company, Henry Ford, who stated that the citizens of this country would start a revolution immediately if they really knew how the banking system works.

Over the years, other notable Americans have stated warnings about allowing private banking institutions to govern our money system under the guise of a government institution.

"Some people think the Federal Reserve Banks are US government institutions. They are not... they are private credit monopolies which prey upon the people of the U.S. for the benefit of themselves and their foreign and domestic swindlers, and rich and predatory money lenders. The sack of the United States by the Fed is the greatest crime in history. Every effort has been made by the Fed to conceal its powers, but the truth is the Fed has usurped the government. It controls everything here and it controls all our foreign relations. It makes and breaks governments at will."

Congressman Charles McFadden, Chairman, House Banking and Currency Committee, June 10, 1932

"The few who can understand the system (Federal Reserve) will either be so interested in its profits, or so dependent on its favors, that there will be no opposition from that class, while on the other hand, the great body of the people, mentally incapable of comprehending the tremendous advantages that capital derives from the system, will bear its burdens without complaint and perhaps without even suspecting that the system is inimical to their interests."

John Sherman

John Sherman was a protégé of the Rothschild banking family, in a letter sent in 1863 to New York Bankers, Morton, and Gould, in support of the then proposed National Banking Act.

"I see in the near future a crisis approaching. It unnerves me and causes me to tremble for the safety of my country... the Money Power of the country will endeavor to prolong its reign"' by working upon the prejudices of the people, until the wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war."

Abraham Lincoln

From a letter written to William Elkin just after the passage of the National Banking Act of 1863 and less than five months before he was assassinated.

The Central Banks and their fiat money system have a HUGE vested interest in keeping their control of the money system. Is it any wonder why the price of gold has been manipulated as many gold gurus have revealed?

By allowing the privately held Federal Reserve to control our monetary system, our purchasing power has been significantly eroded. Since the Fed took control in 1913, the purchasing power of the dollar in terms of buying goods and services has dropped by 94%. In other words, today's dollar could only buy 6 cents worth of goods in 1913.

Is it any wonder that hard assets have sky rocketed in value?

My parent's home was built just before World War II for $14,000. Today it's valued at over $500,000. And you know the story with gold, copper, oil and other commodities. We are in the midst of a major long-term upswing in the price of hard assets and a continuing erosion of paper money.

However we are also saddled with the major problem of debt repayment. Even though future dollars will be worth less, the taxpayers are on the hook to pay back the multi-billion dollar debts which most economists say can never be paid off.

It's an interesting situation and one which history has showed, always ends in failure.

Robert Reich

Former Clinton advisor, Robert Reich stated that he sees the U.S. dollar heading for a downfall but for reasons beyond just debt alone. Reich believed that U.S. foreign policy is alienating traditional allies and the already slumping dollar will head for a collapse.

Reich stated at a global business forum last week that the U.S. dollar is fast reaching a point at which foreign investors will abandon it and send it into a freefall.

The U.S. requires a daily infusion of $1.2 billion in foreign investment just to keep the greenback decline under control, he said.

Reich, who was also an informal advisor to John Kerry was also concerned that Asian banks may soon consider the U.S. dollar a bad investment and pointed out that many global investors are already doing business in Euros, not U.S. dollars.

"If you embark on a unilateral foreign policy and the rest of the world is upset with you that has a boomerang effect on your global businesses. So not only does fiscal policy matter, but your foreign policy cannot be completely divorced from your national economic policy."

The bottom line is that the U.S. dollar is going down. It will either go down in an orderly fashion as it has been or it could collapse as Reich has pointed out.

As I pointed out previously, the best thing that could happen is that the status quo is maintained with foreign purchases of U.S. debt. Without that, the fall of the U.S. dollar will be very swift indeed.

It's hard to say exactly how this faith based, fabricated money system will eventually change the state of the nation over the long term. I'm not optimistic, but I can tell you one thing for sure. The U.S. dollar will be going down over the short term and gold will move up.

Be prepared.

Owning some positions in gold assets is mandatory in this perilous environment.


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