A Dollar Implosion?

Jim Rickards, Senior Managing Director of Market Intelligence for Omnis, appeared on CNBC to discuss what the recent developments at the G-20 mean for the US Dollar. Among the items he discusses are the UN's call for moving away from the dollar as the world's reserve currency, which comes alongside Federal Reserve Governor Kevin Warsh's Op-Ed in the Wall Street Journal, entitled The Fed's Job is Only Half Over. Warsh's piece was published as the G-20 was in session, and Rickards argues that it could not possibly have been coincidence.

Rickards discusses the idea that we, as a world economy, will likely be moving to the International Monetary Fund's Special Drawing Rights as a the reserve currency. Pay particular attention to his explanation of exactly why this is necessary. Basically it boils down to the fact that the Fed as inflated us to such a great extent, that we have no option but to go broke as a country. Pushing our inflated dollar off onto the IMF is the only possible option the Fed has to deflate the dollar quietly enough in the background to avoid completely destroying the economy. There is no heed paid to the notion that the IMF will use SDR's, backed by nothing, printed out of thin air, to run the world economy. Sound familiar?

The only other option he feels the Fed has is to further inflate the dollar by another 50% over the next 14 years. That means if you have a dollar today, it's only worth 50 cents fourteen years from now. The problem with this is that if the market gets ahead of the inflation, and people begin buying commodoties like gold, it could cause a full on collapse of the dollar.

Will we risk destroying the dollar and our economy, or will we trade our nations sovereignty for stability? I think that's a question that's easily answered. We have yet to see anybody with our government or the Federal Reserve make the hard decisions and carry them out correctly since Volcker presided over the last deflationary Fed. I doubt we'll see the hard decision made now.

Remember this video, and remember these upcoming events happening around the dollar. We are in the process of trading our country's sovereignty for the comfort of the world's banking elite.