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Full Version: Trump: Gold Backed Currency/End the Fed/The Global Reset is Coming
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On August 15, 1971, President Nixon killed the last remnants of the gold standard.
Since then, the dollar has been a pure fiat currency, allowing the Fed to print as many dollars as it pleases.
Removing the US dollar’s last link to gold eliminated the main motivation for foreign countries to store large dollar reserves and to use the dollar for international trade.
At this point, demand for dollars was set to fall… along with the dollar’s purchasing power. So the US government concocted a new arrangement to give foreign countries another compelling reason to hold and use the dollar.
The new arrangement, called the petrodollar system, preserved the dollar’s special status as the world’s reserve currency.
In short, the US government made a series of agreements with Saudi Arabia between 1972 and 1974, which created the petrodollar.
The Saudis would use their dominant position in OPEC to ensure that all oil transactions would only happen in US dollars. And the US would guarantee the House of Saud’s survival.
It worked… for a while.
The petrodollar filled the void after the US severed the dollar’s last link to gold as the main prop to the dollar’s status as the world’ premier reserve currency.
So far, the petrodollar has lasted over 40 years. However, the glue is losing its stick.
I think we’re on the cusp of another paradigm shift in the international financial system, a change at least as fundamental as what happened in 1971 when Nixon severed the dollar’s last link to gold.

On the campaign trail, Trump often questioned the future of the Federal Reserve’s political independence. In line with these comments, Allison wants to abolish Federal Reserve all together and go back to the gold standard.
In fact, Allison takes that rhetoric one step further. While acting as the head of the Cato Institute, Allison published several thesis indicating that the Federal Reserve was obsolete and needed to be abolished as it restricts power from the people and allows billionaire cronies to run banks globally.
“I would get rid of the Federal Reserve because the volatility in the economy is primarily caused by the Fed,” Allison wrote in 2014 for the Cato Journal.
As an alternative, Allison argues that if we allow the market to regulate itself, it would be preferable to the Federal Reserve harming the stability of the financial system.
“When the Fed is radically changing the money supply, distorting interest rates, and over-regulating the financial sector, it makes rational economic calculation difficult,” Allison wrote. “Markets do form bubbles, but the Fed makes them worse.”

The United States never had a persistent, ongoing problem with inflation until the Federal Reserve was created in 1913.

Is Trump Really Considering a Return?
When the U.S. government first legalized private ownership of gold again in 1975, Trump was one of the more aggressive investors in the country. He bought in at around $185 an ounce and claims he eventually sold his stake at somewhere between $780 an ounce and $790 an ounce.
But that doesn't mean that Trump is done with gold. He still has quite an affinity for it – something clearly visible in his lavish lifestyle. And when asked about his views on the gold standard in a 2016 interview, he told GQ, "Bringing back the gold standard would be very hard to do, but boy, would it be wonderful. We'd have a standard on which to base our money."
Trump is far from alone in his stance. When you look at other supporters of a return to the gold standard, many of them were on the debate stages with him during the 2016 campaign cycle – including Ben Carson, Ted Cruz, and Mike Huckabee.
The American people, while mostly aligned on the topic, aren't exactly opposed, either. A 2015 Gallup poll shows that 39 percent of people approve of the gold standard, compared to just 15 percent who disapprove. (Nearly half of all respondents were undecided.)
"The appeal of the gold standard rests with those consumers who are growing weary of a ballooning federal deficit levels and nearly $20 trillion in national debt," Sean Williams writes for The Motley Fool. "With the need to have gold on hand to exchange for dollars on an as-needed basis, the Federal Reserve's ability to print money would be restrained, limiting the amount of debt that could be issued annually. Some pundits believe that the gold standard could be America's ticket to getting out of debt, or, at worst, balancing its federal budget."
Is It Even Practical?
As with most economic issues, there are pros and cons associated with a return to the gold standard. The benefit, as Williams touched on, is that it would rein in irresponsible spending by the Fed and possibly help the country get out of debt.
The biggest negative is that it would seriously constrain what the Fed can and can't do. (Many would say this is actually a positive.) While it's easy to disagree with what the Fed chooses to do at times, the ability to influence the economy through monetary policy is important.
In terms of practicality, moving to a gold standard is certainly possible. Most countries keep the majority of their foreign reserves in gold already, and whatever the U.S. decides to do – since most currencies are currently backed by the dollar – would almost certainly be accommodated by other countries.

Personally, i think the global reset is coming and soon we will have a one world currency.
How do they plan to make the shift from the current fiat paper system to their “new world order” economy?
First and foremost, they will seek a controlled demolition of the dollar as the world reserve currency. They have accomplished this in the past with other reserve currencies, such as the Pound Sterling, which was carefully diminished over a period of two decades just after WWII through the use of treasury bond dumps by France and the US, as well as the forced removal of the sterling as the petro-currency. This was done to make way for the US dollar as a replacement after the Bretton Woods agreement in 1944.
The dollar did not achieve true world reserve status, though, until after the gold standard was completely abandoned by Nixon in the early 1970's, at which point a deal was struck with Saudi Arabia making the dollar the petro-currency. Once the dollar was no longer anchored to gold and the world's energy market was made dependent on it, the fate of the US economy was sealed.
Unlike Britain and the sterling, the US economy is hyper-dependent on the dollar's world reserve status. While Britain suffered declining conditions for decades after the loss, including inflation and high interest rates, the US will experience far more acute pain. A complete lack of adequate manufacturing capability within US borders has turned our nation into a consumer based society rather than a society of producers. Meaning, we are dependent on the demand for our currency as a reserve in order to enjoy affordable goods from outside sources (i.e. other manufacturing based countries).
Add to this lack of production ability the fact that for the past decade the Federal Reserve has been pumping trillions of dollars into financial markets around the globe. This means trillions of dollar held overseas only on the promise that those dollars will be accepted by major exporters as a universal store of value. If faith in that promise is lost, those trillions could come flooding back into the US through various channels, and the buying power of the currency would crumble.
There is a delusion within the American mainstream that even if such an event were to occur, the transition could be handled with ease. It's fantastical, I know, but never underestimate the cognitive dissonance of people blinded by bias.
The rebuilding of a production base within the US to offset the crisis of losing the world reserve currency would take many years; perhaps decades. And this is in the best case scenario. With a plummeting currency and extreme price inflation, the cost of establishing new production on a large scale would be immense. While local labor might become cheap (in comparison with inflation), all other elements of the economy would become very expensive.
In the worst case scenario there would be complete societal breakdown likely followed by an attempted totalitarian response by government. In which case, forget any domestically funded economic recovery. Any future recovery would have to be funded and managed from outside the US. And here is where we see the globalist plan taking shape.
The banking elites have hinted in the past how they might try to “reset” the global economy. As I've mentioned in many articles, the globalist run magazine The Economist in 1988 discussed the removal of the dollar to make way for a global currency, a currency which would be introduced to the masses by 2018. This introduction did in fact take place as The Economist declared it would. Blockchain and digital currency systems, the intended foundation of the next globalist monetary structure, received unprecedented coverage the past two years. They are now a part of the public consciousness.
Here is how I believe the process will unfold:
The 2008 crash in credit and housing markets led to unprecedented stimulus by central banks, with the Federal Reserve leading the pack as the greatest source of inflation. This program of bailouts and QE stimulus conjured an even bigger bubble, which many alternative analysts have dubbed “the everything bubble”.
The growing “everything bubble” encompasses not just stock markets or housing, but auto markets, credit markets, bond markets, and the dollar itself. All of these elements are now tied directly to Fed policy. The US economy is not only addicted to stimulus measures and near-zero interest rates; it will die without them.
The Fed knows this well. Chairman Jerome Powell hinted at the crisis that would evolve if the Fed ever cut off stimulus, unwound its balance sheet and hiked rates in the October 2012 Fed minutes.
Without constant and ever expanding stimulus measures, the false economy will implode. We are already seeing the effects as the Fed cuts tens-of-billions per month in assets from its balance sheet and hikes interest rates to their “neutral rate of inflation”. Auto markets, housing markets, and credit markets are in reversal, and stocks are witnessing the most instability since the 2008 crash. All of this was triggered by the Fed simply exerting incremental rate hikes and balance sheet cuts.
It is also important to note that almost every US stock market rally the past several months has taken place while the Fed's balance sheet cuts were frozen. For example, for the past two-and-a-half weeks the Fed's assets have only dropped by around $8 billion; this is basically a flatline in the balance sheet. It should not be surprising given this pause in cuts (in tandem with convenient stimulus measures by China) that stocks spiked through early to mid-January.
That said, Fed tightening will start again, either by rate hikes, asset cuts, or both at the same time. The Fed's purpose is to create a crisis. The Fed's goal is to cause a crash. The Fed is a suicide bomber that does not care what happens to the US system.
But what about the dollar, specifically?
The Fed's tightening policies do not only translate to crisis for US stocks or other markets. I see three primary ways in which the dollar can be dethroned as the world reserve.
1) Emerging economies have become addicted to Fed liquidity over the past ten years. Without continued access to the Fed's easy money, nations like China and India are beginning to seek out alternatives to the dollar as a world reserve. Contrary to the popular belief that these countries would “never” be able to decouple from the US, the process has already begun. And, it is the Fed that has actually created the necessity for emerging markets to seek out other sources of liquidity besides the dollar.
2) Donald Trump's trade war is yet another cover event for the loss of reserve status. I would note that the primary rationale for tariffs was to balance the trade deficit. The trade deficit with China has done the opposite and is continually expanding each month. This suggests much higher tariffs on China would be required to reduce the imbalance.
It must also be understood that the trade deficit with China has long been part of a larger agreement. China is one of the largest buyers of US debt in the world and has continued to utilize the dollar as the world reserve currency. If the trade war continues through this year, it is only a matter of time before China, already seeking dollar alternatives as the Fed tightens liquidity, will start using its US treasury and dollar holdings as leverage against us.
Bilateral agreements between multiple nations that cut out the dollar are being established regularly today. If China, the largest exporter/importer in the world, stops accepting the dollar as the world reserve, or if they start accepting other currencies in competition, then numerous other nations will follow their lead.
3) Finally, if the war of words between Trump and the Fed becomes something more, then this could be used by the establishment to undermine faith in US credit. If Trump seeks to shut down the Fed entirely, the globalists are handed yet another perfect distraction for the death of the dollar. I can see the headlines now - The “reset” could then be painted as a “rescue” of the global economy after the “destructive actions of populists” who “bumbled into fiscal destruction” because they were blinded by an “obsession with sovereignty” in a world that “requires centralization to survive”.
The specifics of the shift to a global currency are less clear, but again, we have hints from the globalists. The Economist suggests that the US economy will have to be taken down a few pegs, and that the IMF would step in as the arbiter of forex markets through its SDR basket system. This plan was echoed recently by globalist Mohamed El-Erian in an article he wrote titled “New Life For The SDR?”. El-Erian also suggests that a global currency would help to combat the “rise of populism”.