The same force that made the dollar the world’s reserve currency is working to dethrone it.
Times are changing. The old structure in the world — a system dominated by the US government, US banks, and the US dollar — is coming to an end.
At 5pm yesterday, the Aussie dollar was trading at US$0.7155. But early this morning, it dipped to $0.706. Probably because of falling commodity prices.
Jim and I are working on a new project to help you better understand how currency wars affect your portfolio.
Rickards says the US economy is fundamentally too weak support a rate increase. And the strengthening US dollar has a similar effect to a rate increase.
When the US fed raises rates, it will spell the end to this 30-year bond bull market. The hedge? Commodities.
The Aussie dollar fell sharply against the US dollar this morning. Just after 11am AEST — 9pm EDT (New York time) — it tumbled from US$0.7429 to US$0.7374.
Gold is trading around US$1,085 per ounce. That’s a five-year low, down over 40% from its all-time high in August 2011, and down over 8% this year alone.
Confidence in the US dollar will be lost. And gold will rally against the US dollar. That’s right, the US dollar will start to die in your lifetime.
I believe that the main financial crash will come from governments defaulting on their bonds. It’s quite clear from Jim’s analysis that he disagrees.