Global Norms Around a Change - Death of the US Dollar

Our school systems do not have money in our curriculum, yet our lives depend on it. We spend most of our lives worrying about it, working for it, saving it, spending it, and even fighting, dying, or killing for it. It defines our social status and even compromises our morals. Those most concerned with trade and budget deficits are typically advocates of hard money, such as the gold community. These individuals often study monetary history, which has a recurring pattern that echoes back to the dawn of civilization. Free Markets, Free People, and Sound Money are the road to maximum prosperity. The US Dollar is about 60% of the value of all the currency on the planet, and more than half of the Dollar resides outside of the United States. Central Banks around the world use the US Dollar as the world’s reserve currency. Oil is priced in Dollars. Some countries have started opposing this by either doing long-term mutual currency-holding agreements or forming organizations like BRICS to trade without the US Dollar. Iran started selling oil for euros, and Libya created the Gold Dinar are example in contrast to pricing Oil in US$. Some countries are adopting Gold, by making legal tender currency, while others are accumulating Physical Gold in their national treasuries. Also, we have Gold repatriation, where countries and individuals are asking for their gold back, and Germany, in fact, is getting it back, also Venezuela has repatriated its gold from the Bank of England. Nails in the US Dollar Coffin 1970 - It all started with Nixon ending the Bretton Woods Agreement, and we went on to the Dollar Standard. The first Nail was in 2006 when Iraq started selling oil in Euros. The second Nail was in 2008 when the world was hit by the Global Financial Crisis and the US added $1.25 trillion to our base money, creating panic about inflation Third Nail in 2009 when Iran ended oil sales in dollars Quantitative Easing(QE) 2: adding another 600 billion dollars printed in the US. China and Russia agree on a bilateral trade agreement. Quantitative Easing(QE) 3: Adding more than $1trillion a year. Formation of BRICS BRICS, an acronym for Brazil, Russia, India, China, and South Africa, was established to represent the growing influence of emerging economies. The idea was first introduced in 2001 by economist Jim O’Neill, but the group officially formed in 2009 when Brazil, Russia, India, and China held their first summit. South Africa joined in 2010, making it BRICS. The bloc aims to promote economic cooperation, political alignment, and a multipolar global order, counterbalancing Western-dominated institutions like the IMF and World Bank. Emergence of Bitcoin Bitcoin was introduced in 2008 by an anonymous figure or group under the pseudonym Satoshi Nakamoto. It was created in response to the 2008 financial crisis, with the aim of offering a decentralized and transparent alternative to traditional currencies. Bitcoin’s underlying technology, blockchain, ensures secure, immutable transactions without the need for intermediaries. Its launch in 2009 marked the beginning of a new era for digital currencies, challenging the way we think about money and financial systems. Covid Then we got hit by the COVID-19 pandemic in late 2019, which originated in Wuhan, China. It rapidly spread across the globe, leading to widespread health crises, economic disruptions, and changes in daily life. Governments implemented lockdowns, travel restrictions, and mass vaccination campaigns to combat the virus. Beyond the human toll, COVID-19 reshaped industries, accelerated digital transformation, and highlighted global inequalities in healthcare systems. Its impact is still being felt today, as societies adapt to a post-pandemic world. QE Easing Quantitative easing (QE) is a monetary policy used by central banks to stimulate the economy during periods of low growth or financial crises. Through QE, central banks purchase government bonds and other financial assets, injecting liquidity into the economy to lower interest rates and encourage lending and investment. While QE has been effective in stabilizing economies, especially after the 2008 financial crisis and during COVID-19, it has led to asset bubbles and widened wealth inequality. It took 200 years to go from no dollars to 825 billion, and now, they’re creating $1 trillion every year. All fiat currencies have failed, and there’s no reason why the US$ won’t. This time, it’s at the biggest, which has never happened before. It’s gonna cause problems on a global scale. It’s a trust breaking down, already seeing this as different countries have started exchanging directly with each other’s currency, circumventing the dollar. You can see that with oil, people are just going to opt out of the dollar, and you get to a point where the whole world financial system collapses, and the dollar is more or less used internally in the United States. It ain’t gonna be pretty when it happens. This is not the end of the world or doomsday, but all you can do is play the hand you’re dealt. We probably go to a new monetary system, as this one has too much energy built into this one, which has to be released and come crashing down somehow. This can become the greatest opportunity of your lifetime or the greatest curse. People don’t realize that this wealth transfer affects everybody, whether you want to participate or not. If you are holding paper assets (fiat currencies), you bet in one direction, whereas, if you’re holding gold or physical assets or Bitcoin, you’re betting on the opposite side. What Happens When the US $ Fails? Multiple Reserve Currencies: The problem with this is that there’s no anchor in this system. We used to have this system in place in 1920 with sterling and Dollar, where both were anchored to gold. And also, in the post-Bretton Woods world, since 1944, where we had one reserve currency (USD), which was anchored to gold till 1971. Since then, the dollar has been detached from gold, but all other currencies are still attached to the dollar. We never had a world with multiple reserve currencies with no anchor, but I am not sure it will be that stable. Special Drawing Rights: SDR is a basket of currencies sponsored by the IMF, which, at least for the time being, is also printed money. IMF prints money and ships it off to members where, in turn, the Bank reserves go up similar to how the Fed creates USD. Gold: The third choice is some variation of the gold standard, which has been considered stable money for around 5000 years. Chaos: Nobody does anything, there’s a lot of wishful thinking, a lot of denial and delay, and loss of faith in paper currencies as hard assets, and we have a sequential collapse of fiat currencies around the world, at which point, governments will have to react with emergency measures that can include coercion, confiscation, and various sorts of paper asset freezing; could be a lot of things in this scenario. I personally favor gold and physical and digital assets, but I fear we may get chaos. Every 30-40 years, the world has a new monetary system, while governments and central banks have screwed us more and more. These same people have these systems over and over and each time they cheat the people more and enrich the banks more. It’s a system that transfers wealth at greater speeds. This one is going to fall apart too just like the others, but there’s a difference this time; we have the Internet, people are connected all over the world, information is spreading, and people are getting educated. With the Gold Standard, there’s supposed to be a certain amount of Gold in the vaults for each unit of currency; i.e., a 1:1 ratio, and then a central entity that controls the printing of receipts, eventually decides to deceive its people and starts printing more. If we go back to the Gold-backed standard, we’re going to get scammed again. We don’t need Gold Standard, we need gold and silver as money. Gold Always Account for Expanding Currency Supply From 1900 until the establishment of the Federal Reserve, the amount of currency supply in circulation and gold were the same. Then, the USA established the Federal Reserve and inflated for World War I, making us have more currency in circulation than enough gold to back it. There were some bank runs in the 1930’s. President Roosevelt unpegged the dollar from gold, making gold’s value grow from $20 an ounce to $35 an ounce. And when it did, the value of gold held at the US treasure rose to meet the value of currency in circulation at the time. During World War I and World War II, the US had a lot of Gold inflows for lots of consumer goods and services (117%) which made the United States the Superpower that we know of today. It’s all financial. Then the US jumped into the war around 1944 and inflates currency supply beyond the gold backing. 1959, countries started figuring it out and started cashing out their Dollars for Gold, which, under the Bretton Woods Agreement, could be freely exchanged at the New York Fed by Central Banks (Not Individuals). Hence, Gold started flowing out, and the US lost around 50% of their gold reserves from 1959 to 1971, while, in the meantime, the US printed more currency. If this had continued till it got down to Zero, and if there’d be 1 more dollar that laid claim to gold, the entire world monetary system would have come crashing down. So, as a solution, President Nixon, took the US off of the Bretton Woods System, the last vestiges of the gold standard, in August 15th of 1971. To make the matter more complicated, the world was introduced to credit cards. When you charge something on a credit card, you create currency. The banks didn’t actually loan you anything; they invented numbers and then they have the gall to charge you interest if you don’t pay those numbers back on time😅. The merchant you’re paying for your goods and services can’t tell the difference between “credit dollars” you created or the “cash dollars” that you pay them with. It all looks the same to that merchant’s checking account and those dollars that you created stay in circulation until somebody saves them up and pay’s down their credit card debt. Then we get to the 2008 financial crisis, we did bailouts and all the Quantitative Easing (QEs). Soon, they announced QE3, which is the 85 billion a month that they’re creating and adding into economy. These are just numbers in computers for US dollar, so considering cases for the future: If we have deflation (i.e., reduced paper money), maybe gold will peak at $3000/ounce. If we have big inflation, and Dow goes to 30000, maybe gold will be $60,000/ounce. If we have hyperinflation, the Dow would be 30 trillion, and gold would be $60trillion/ounce. In any case, gold will buy you atleast 10x more paper assets that it does today. At the end of the day, the fundamental drivers of gold, it’s not so much that gold’s in a bull market, it’s more that the dollar is in a bear market. People ask, how high can gold go, and the answer here is how low can the dollar go. Dollar can go to ‘zero’, and in theory, gold can go to infinity. In the real world, if something else happens, it’s likely the dollar will fall off the stage. There’ll be a time when you won’t count gold in dollars anymore because the dollar won’t count. People won’t want dollars. There is so much opportunity in crisis; it is absolutely extraordinary. That’s not me saying it; that’s just history. In terms of crisis, huge fortunes were made. It’s a time when human beings create and develop newest technologies, new science, and new medicines. As long as you can remain calm, get educated, be resourceful, you’ll be good. Challenge for most people is that in crisis, they go into crisis mode, which means they go into scarcity, they go into lack, they go into blame, and none of those emotions are resourceful for helping you solve whatever challenge is in front of you. There were more millionaires created during the Great Depression than any other period in history. Summary We have learned the follwing hidden secrets of money: There is a global loss of confidence in U.S. Dollar that is accelerating rapidly. The change to a new monetary system is inevitable and most likely to be chaotic. Gold Standards do not work over long period of time, but gold itself does. The public contributes to the massive amounts of currency creation by using credit cards and signing loans. Gold has already accounted for the expansion of the US Dollar twice in the last century and may likely do so again. Reference for this article: Hidden Secrets of Money Episode 3 - Mike Maloney Our school systems do not have money in our curriculum, yet our lives depend on it. We spend most of our lives worrying about it, working for it, saving it, spending it, and even fighting, dying, or killing for it. It defines our social status and even compromises our morals. Those most concerned with trade and budget deficits are typically advocates of hard money, such as the gold community. These individuals often study monetary history, which has a recurring pattern that echoes back to the dawn of civilization. Free Markets, Free People, and Sound Money are the road to maximum prosperity. Free Markets, Free People, and Sound Money are the road to maximum prosperity. The US Dollar is about 60% of the value of all the currency on the planet, and more than half of the Dollar resides outside of the United States. Central Banks around the world use the US Dollar as the world’s reserve currency. Oil is priced in Dollars. Central Banks around the world use the US Dollar as the world’s reserve currency. Oil is priced in Dollars. Some countries have started opposing this by either doing long-term mutual currency-holding agreements or forming organizations like BRICS to trade without the US Dollar. Iran started selling oil for euros, and Libya created the Gold Dinar are example in contrast to pricing Oil in US$. Some countries are adopting Gold, by making legal tender currency, while others are accumulating Physical Gold in their national treasuries. Also, we have Gold repatriation, where countries and individuals are asking for their gold back, and Germany, in fact, is getting it back, also Venezuela has repatriated its gold from the Bank of England. Nails in the US Dollar Coffin 1970 - It all started with Nixon ending the Bretton Woods Agreement, and we went on to the Dollar Standard. The first Nail was in 2006 when Iraq started selling oil in Euros. The second Nail was in 2008 when the world was hit by the Global Financial Crisis and the US added $1.25 trillion to our base money, creating panic about inflation Third Nail in 2009 when Iran ended oil sales in dollars Quantitative Easing(QE) 2: adding another 600 billion dollars printed in the US. China and Russia agree on a bilateral trade agreement. Quantitative Easing(QE) 3: Adding more than $1trillion a year. The first Nail was in 2006 when Iraq started selling oil in Euros. The second Nail was in 2008 when the world was hit by the Global Financial Crisis and the US added $1.25 trillion to our base money, creating panic about inflation Third Nail in 2009 when Iran ended oil sales in dollars Quantitative Easing(QE) 2: adding another 600 billion dollars printed in the US. China and Russia agree on a bilateral trade agreement. Quantitative Easing(QE) 3: Adding more than $1trillion a year. Formation of BRICS BRICS, an acronym for Brazil, Russia, India, China, and South Africa, was established to represent the growing influence of emerging economies. The idea was first introduced in 2001 by economist Jim O’Neill, but the group officially formed in 2009 when Brazil, Russia, India, and China held their first summit. South Africa joined in 2010, making it BRICS. The bloc aims to promote economic cooperation, political alignment, and a multipolar global order, counterbalancing Western-dominated institutions like the IMF and World Bank. Emergence of Bitcoin Bitcoin was introduced in 2008 by an anonymous figure or group under the pseudonym Satoshi Nakamoto. It was created in response to the 2008 financial crisis, with the aim of offering a decentralized and transparent alternative to traditional currencies. Bitcoin’s underlying technology, blockchain, ensures secure, immutable transactions without the need for intermediaries. Its launch in 2009 marked the beginning of a new era for digital currencies, challenging the way we think about money and financial systems. Covid Then we got hit by the COVID-19 pandemic in late 2019, which originated in Wuhan, China. It rapidly spread across the globe, leading to widespread health crises, economic disruptions, and changes in daily life. Governments implemented lockdowns, travel restrictions, and mass vaccination campaigns to combat the virus. Beyond the human toll, COVID-19 reshaped industries, accelerated digital transformation, and highlighted global inequalities in healthcare systems. Its impact is still being felt today, as societies adapt to a post-pandemic world. QE Easing Quantitative easing (QE) is a monetary policy used by central banks to stimulate the economy during periods of low growth or financial crises. Through QE, central banks purchase government bonds and other financial assets, injecting liquidity into the economy to lower interest rates and encourage lending and investment. While QE has been effective in stabilizing economies, especially after the 2008 financial crisis and during COVID-19, it has led to asset bubbles and widened wealth inequality. It took 200 years to go from no dollars to 825 billion, and now, they’re creating $1 trillion every year. It took 200 years to go from no dollars to 825 billion, and now, they’re creating $1 trillion every year. All fiat currencies have failed, and there’s no reason why the US$ won’t. This time, it’s at the biggest, which has never happened before. It’s gonna cause problems on a global scale. It’s a trust breaking down, already seeing this as different countries have started exchanging directly with each other’s currency, circumventing the dollar. You can see that with oil, people are just going to opt out of the dollar, and you get to a point where the whole world financial system collapses, and the dollar is more or less used internally in the United States. It ain’t gonna be pretty when it happens. This is not the end of the world or doomsday, but all you can do is play the hand you’re dealt. We probably go to a new monetary system, as this one has too much energy built into this one, which has to be released and come crashing down somehow. This can become the greatest opportunity of your lifetime or the greatest curse. People don’t realize that this wealth transfer affects everybody, whether you want to participate or not. If you are holding paper assets (fiat currencies), you bet in one direction, whereas, if you’re holding gold or physical assets or Bitcoin, you’re betting on the opposite side. What Happens When the US $ Fails? Multiple Reserve Currencies: The problem with this is that there’s no anchor in this system. We used to have this system in place in 1920 with sterling and Dollar, where both were anchored to gold. And also, in the post-Bretton Woods world, since 1944, where we had one reserve currency (USD), which was anchored to gold till 1971. Since then, the dollar has been detached from gold, but all other currencies are still attached to the dollar. We never had a world with multiple reserve currencies with no anchor, but I am not sure it will be that stable. Special Drawing Rights: SDR is a basket of currencies sponsored by the IMF, which, at least for the time being, is also printed money. IMF prints money and ships it off to members where, in turn, the Bank reserves go up similar to how the Fed creates USD. Gold: The third choice is some variation of the gold standard, which has been considered stable money for around 5000 years. Chaos: Nobody does anything, there’s a lot of wishful thinking, a lot of denial and delay, and loss of faith in paper currencies as hard assets, and we have a sequential collapse of fiat currencies around the world, at which point, governments will have to react with emergency measures that can include coercion, confiscation, and various sorts of paper asset freezing; could be a lot of things in this scenario. Multiple Reserve Currencies: The problem with this is that there’s no anchor in this system. We used to have this system in place in 1920 with sterling and Dollar, where both were anchored to gold. And also, in the post-Bretton Woods world, since 1944, where we had one reserve currency (USD), which was anchored to gold till 1971. Since then, the dollar has been detached from gold, but all other currencies are still attached to the dollar. We never had a world with multiple reserve currencies with no anchor, but I am not sure it will be that stable. Multiple Reserve Currencies : The problem with this is that there’s no anchor in this system. We used to have this system in place in 1920 with sterling and Dollar, where both were anchored to gold. And also, in the post-Bretton Woods world, since 1944, where we had one reserve currency (USD), which was anchored to gold till 1971. Since then, the dollar has been detached from gold, but all other currencies are still attached to the dollar. We never had a world with multiple reserve currencies with no anchor, but I am not sure it will be that stable. Multiple Reserve Currencies Special Drawing Rights: SDR is a basket of currencies sponsored by the IMF, which, at least for the time being, is also printed money. IMF prints money and ships it off to members where, in turn, the Bank reserves go up similar to how the Fed creates USD. Special Drawing Rights: SDR is a basket of currencies sponsored by the IMF, which, at least for the time being, is also printed money. IMF prints money and ships it off to members where, in turn, the Bank reserves go up similar to how the Fed creates USD. Special Drawing Rights: Gold: The third choice is some variation of the gold standard, which has been considered stable money for around 5000 years. Gold: The third choice is some variation of the gold standard, which has been considered stable money for around 5000 years. Gold: Chaos: Nobody does anything, there’s a lot of wishful thinking, a lot of denial and delay, and loss of faith in paper currencies as hard assets, and we have a sequential collapse of fiat currencies around the world, at which point, governments will have to react with emergency measures that can include coercion, confiscation, and various sorts of paper asset freezing; could be a lot of things in this scenario. Chaos : Nobody does anything, there’s a lot of wishful thinking, a lot of denial and delay, and loss of faith in paper currencies as hard assets, and we have a sequential collapse of fiat currencies around the world, at which point, governments will have to react with emergency measures that can include coercion, confiscation, and various sorts of paper asset freezing; could be a lot of things in this scenario. Chaos I personally favor gold and physical and digital assets, but I fear we may get chaos. I personally favor gold and physical and digital assets, but I fear we may get chaos. Every 30-40 years, the world has a new monetary system, while governments and central banks have screwed us more and more. These same people have these systems over and over and each time they cheat the people more and enrich the banks more. It’s a system that transfers wealth at greater speeds. This one is going to fall apart too just like the others, but there’s a difference this time; we have the Internet, people are connected all over the world, information is spreading, and people are getting educated. With the Gold Standard, there’s supposed to be a certain amount of Gold in the vaults for each unit of currency; i.e., a 1:1 ratio, and then a central entity that controls the printing of receipts, eventually decides to deceive its people and starts printing more. If we go back to the Gold-backed standard, we’re going to get scammed again. We don’t need Gold Standard, we need gold and silver as money. Gold Always Account for Expanding Currency Supply From 1900 until the establishment of the Federal Reserve, the amount of currency supply in circulation and gold were the same. Then, the USA established the Federal Reserve and inflated for World War I, making us have more currency in circulation than enough gold to back it. There were some bank runs in the 1930’s. President Roosevelt unpegged the dollar from gold, making gold’s value grow from $20 an ounce to $35 an ounce. And when it did, the value of gold held at the US treasure rose to meet the value of currency in circulation at the time. During World War I and World War II, the US had a lot of Gold inflows for lots of consumer goods and services (117%) which made the United States the Superpower that we know of today. It’s all financial. It’s all financial. Then the US jumped into the war around 1944 and inflates currency supply beyond the gold backing. 1959, countries started figuring it out and started cashing out their Dollars for Gold, which, under the Bretton Woods Agreement, could be freely exchanged at the New York Fed by Central Banks (Not Individuals). Hence, Gold started flowing out, and the US lost around 50% of their gold reserves from 1959 to 1971, while, in the meantime, the US printed more currency. If this had continued till it got down to Zero, and if there’d be 1 more dollar that laid claim to gold, the entire world monetary system would have come crashing down. So, as a solution, President Nixon, took the US off of the Bretton Woods System, the last vestiges of the gold standard, in August 15th of 1971. To make the matter more complicated, the world was introduced to credit cards. When you charge something on a credit card, you create currency. The banks didn’t actually loan you anything; they invented numbers and then they have the gall to charge you interest if you don’t pay those numbers back on time😅. The merchant you’re paying for your goods and services can’t tell the difference between “credit dollars” you created or the “cash dollars” that you pay them with. It all looks the same to that merchant’s checking account and those dollars that you created stay in circulation until somebody saves them up and pay’s down their credit card debt. Then we get to the 2008 financial crisis, we did bailouts and all the Quantitative Easing (QEs). Soon, they announced QE3, which is the 85 billion a month that they’re creating and adding into economy. These are just numbers in computers for US dollar, so considering cases for the future: If we have deflation (i.e., reduced paper money), maybe gold will peak at $3000/ounce. If we have big inflation, and Dow goes to 30000, maybe gold will be $60,000/ounce. If we have hyperinflation, the Dow would be 30 trillion, and gold would be $60trillion/ounce. If we have deflation (i.e., reduced paper money), maybe gold will peak at $3000/ounce. If we have deflation (i.e., reduced paper money), maybe gold will peak at $3000/ounce. If we have big inflation, and Dow goes to 30000, maybe gold will be $60,000/ounce. If we have big inflation, and Dow goes to 30000, maybe gold will be $60,000/ounce. If we have hyperinflation, the Dow would be 30 trillion, and gold would be $60trillion/ounce. If we have hyperinflation, the Dow would be 30 trillion, and gold would be $60trillion/ounce. In any case, gold will buy you atleast 10x more paper assets that it does today. At the end of the day, the fundamental drivers of gold, it’s not so much that gold’s in a bull market, it’s more that the dollar is in a bear market. People ask, how high can gold go, and the answer here is how low can the dollar go. Dollar can go to ‘zero’, and in theory, gold can go to infinity. In the real world, if something else happens, it’s likely the dollar will fall off the stage. There’ll be a time when you won’t count gold in dollars anymore because the dollar won’t count. People won’t want dollars. There is so much opportunity in crisis; it is absolutely extraordinary. That’s not me saying it; that’s just history. In terms of crisis, huge fortunes were made. It’s a time when human beings create and develop newest technologies, new science, and new medicines. As long as you can remain calm, get educated, be resourceful, you’ll be good. Challenge for most people is that in crisis, they go into crisis mode, which means they go into scarcity, they go into lack, they go into blame, and none of those emotions are resourceful for helping you solve whatever challenge is in front of you. There were more millionaires created during the Great Depression than any other period in history. Summary We have learned the follwing hidden secrets of money: There is a global loss of confidence in U.S. Dollar that is accelerating rapidly. The change to a new monetary system is inevitable and most likely to be chaotic. Gold Standards do not work over long period of time, but gold itself does. The public contributes to the massive amounts of currency creation by using credit cards and signing loans. Gold has already accounted for the expansion of the US Dollar twice in the last century and may likely do so again. There is a global loss of confidence in U.S. Dollar that is accelerating rapidly. There is a global loss of confidence in U.S. Dollar that is accelerating rapidly. The change to a new monetary system is inevitable and most likely to be chaotic. The change to a new monetary system is inevitable and most likely to be chaotic. Gold Standards do not work over long period of time, but gold itself does. Gold Standards do not work over long period of time, but gold itself does. The public contributes to the massive amounts of currency creation by using credit cards and signing loans. The public contributes to the massive amounts of currency creation by using credit cards and signing loans. Gold has already accounted for the expansion of the US Dollar twice in the last century and may likely do so again. Gold has already accounted for the expansion of the US Dollar twice in the last century and may likely do so again. Reference for this article: Hidden Secrets of Money Episode 3 - Mike Maloney Reference for this article: Hidden Secrets of Money Episode 3 - Mike Maloney Hidden Secrets of Money Episode 3 - Mike Maloney