Here’s a truth I believe. Gold is money. Always has been always will be. . Gold is real money … real wealth. It has stood the test of time, like no other asset in the world. The US dollar is fiat paper with absolutely nothing behind it. The rest of the world now realizes the emperor has no clothes. As a result, foreign governments are getting out of the dollar as fast as they can without causing a global economic crisis or a war. Is this playing into the hands of the FED. In spite of all its protestations to the contrary, the U.S. Government really wants a lower dollar. True it prefers its decline to be gradual and orderly, but it is doing absolutely nothing to stop its slide.
Of course, if the Fed wanted to defend the dollar they could halt their mass printing of dollars, and they could raise interest rates. And Bernanke could win the 800 meter race at the next Olympics at Rio. The fact of the matter is the dollar has become the GM of currencies.
But let’s be rational – how in God’s name is the US going to pay off trillions in debt? By raising taxes? Impossible. Do you realize that if the government taxed at 100% all of the income from every single citizen our debt would still increase by trillions. They could renege on the debt like Argentina – unthinkable. But there is a way – they’ll try to minimize the importance of the debt with a cheaper devalued dollar. They will take the dollar down at least 30% from where it is today. Count on it! That means your purchasing power will erode approximately 50% in the next 2-3 year time span.