Why Your Gold IRA Might Depend On The IMF! (Part 2)

February 27, 2017

gold and markets

This is the second of our two-part article about a crucial upcoming IMF meeting and what it might mean for the dollar in your pocket, and your retirement plans… Part One is here.

So, what lies behind this desperate urge to alter the voting structure of the IMF committee?

Russia, and more particularly, China, have for a while now, been leading the rest of their BRICS partners on something of a mission. They no longer feel that the US dollar should be the reserve currency because of this ongoing trade imbalance.

As we mentioned, America now accounts for only 25% of the world’s net worth. By contrast, the BRICS economies have increased their share considerably, and this slice is triple the size it was back in the 90s. This makes it nearly equal to the US, and larger than the whole EU (European Union) economy.

Because of this, the BRICS economies may well achieve 16 or 17% of the voting rights, in the upcoming round of negotiations in Washington DC in just a couple of weeks’ time.

This will give them, collectively, the power of veto over the United States vote.

These two pie charts show graphically the problem which confronts the US. China and Russia are wanting to replace the dollar as the world’s reserve currency with something they describe as a “world currency.”

Russia feels it to be unfair that an underpowered, and lethargic, United States should be able to call the tune, and to suit its own interests, when no longer seen as a key player, according to the quota system of the IMF voting rights rules.

Proposing a “world currency,” as an answer, is the BRICS countries counter to this conundrum.

China has already made big inroads into reserve currency territory - the Chinese renminbi (RMB) was included in the SDR (the new Special Drawing Right (SDR) valuation basket) as its fifth currency last October. By joining the US dollar, the euro, the Japanese yen, and the pound sterling, the Chinese asserted their new strength by becoming part of the weighting.

The IMF stated. “The Renminbi’s inclusion reflects the progress made in reforming China’s monetary, foreign exchange, and financial systems, and acknowledges the advances made in liberalizing and improving the infrastructure of its financial markets.”

Using this recent position as its springboard, China is looking to influence the decision to create just one new global currency, to replace the disparate, and disjointed currencies of the current system - in the same way that the euro replaced many European currencies.

Nobody knows what form this proposed world currency will take, but there is a real danger it may well be .an “electronic currency.” This would mean every single transaction conducted would be not only traceable, but vulnerable to cyber hacking, theft, and political or governmental interference too.

All For One And One For All

The real frightener is the withdrawal of the dollar, as a physical reserve currency - this would mean no hiding place for any form of “real” money anywhere - paper or coin, in the form of fiat currency. Money backed by the inherent value of precious metals could still be used in such a situation.

All existing fiat dollars will be swapped for the new “world money” - and this means the dollar would lose its value and become weak in all of the world forex markets. Imports, into the United States would need to be paid for with world money too.

Everything would become more expensive, and the national debt, already dangerously close to $20 trillion, will soar even further.

As with all these massive figures it is quite difficult to get a handle on the kind of money being talked of here, so this chart may shed some light on the sheer size of the problem engulfing the United States.

What this chart clearly shows is the US national debt is now more than all the world’s physical currency, physical gold, above ground silver and crypto currencies - together!

Imagine, for a moment, the effect of adding the ”world currency nightmare” to the equation.

In the end, all world governments are in serious trouble with national debt, and are looking to plug the holes with any means they can find. Quantitative easing, and printing of money, is one solution to this which has been tried, and seems to have fallen out of favor.

These are some of the major reasons, right now, we feel physical possession of gold and silver, in bullion or coin form, is the only way you will be able to protect the value of the dollar in your pocket.

You should seriously consider putting some your investment pool into some kind of precious metal holding - whether you own this gold or silver as a cash holding - or, whether you hold it as a gold or silver IRA (Individual Retirement Account) within your retirement portfolio.

This last sort of account lets you put pre-tax income into investments which can then grow tax-deferred. No dividend income or capital gains is taxed until withdrawal. 100% of any earnings can be contributed, up to a set amount. Traditional IRA contributions could be tax-deductible if the tax-filing status, taxpayer's income and other factors are acceptable to the IRS.

If you have been thinking of starting a gold IRA, silver IRA or a 401(k) rollover, this Gold IRA Guide is essential.

It explains the workings and details of gold and silver IRAs - and how you can use them to hedge against the effects of inflation and other financial risks to your wealth.

Whatever you decide to do, we urge you to consider taking action very soon. The clock is ticking for the advent of some form of world currency - the implications for the dollar are clear.

Springtime, in Washington DC, this year, maybe even more tense than we thought … it seems if Russia and China have their way, and the BRICS gain their voting rights, the dollar won’t always rule.

ALSO READ: Why Your Gold IRA Might Depend On The IMF! (Part 1)


Charles Thorngren is the CEO of Noble Gold Investments. He has more than two decades of experience in financial investments - especially precious metals. Noble Gold prides itself on its personal approach to advising clients on gold and silver IRAs. To discover more visit their website or get your free investor's guide here.

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