 Protecting
Yourself Against the U.S. Dollar Collapse
Bill Ridley
OnlineInvestorsNews Volume M9-11, October, 2004
www.jameswinston.com
September 29, 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, 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.
Former Clinton advisor, Robert
Reich stated last week that he sees the U.S. dollar heading for
a downfall but for reasons beyond just debt alone. Reich believes
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 is also an informal
advisor to John Kerry is 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 two weeks
ago, 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.
Sept 29, 2004
Bill Ridley
Contact
Website: www.jameswinston.com/
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