Trump And A New Gold-Backed Dollar

Tyler Durden's picture

Submitted by Nick Giambruno via InternationalMan.com,

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.

The relationship between Saudi Arabia and the US hit historic lows in 2016. I only expect it to get worse. Trump is the first president since the petrodollar system was enacted to be openly hostile toward the Saudis.

The death of the petrodollar system is my No. 1 black swan event for 2017.

It raises the question: What will fill the void when the petrodollar inevitably dies?

When that happens—and it may be imminent—something has to replace it. I think there are only two options.

Naturally, the global elite want to centralize more power into global institutions. In this case, that means the International Monetary Fund (IMF).

The IMF issues a type of international currency called the “Special Drawing Right,” or SDR.

The SDR is nothing new. The globalists have been slowly building it up since 1969. In the near future, it could be used as the premier international currency—the role the dollar has played since the end of World War 2.

The SDR is simply a basket of other fiat currencies. The US dollar makes up 42%, the euro 31%, the Chinese renminbi 11%, the Japanese yen 8%, and the British pound 8%.

It’s a fiat currency based on other fiat currencies… a floating abstraction based on other floating abstractions.

The SDR is not based on sound economics or the interests of the common man. It’s just another cockamamie invention of the economic witch doctors in academia and government.

The SDR is dangerous. It gives the government—in this case, a global government—more power. It’s a bridge to a powerful global monetary authority, and eventually a global currency.

Most decent people would consider this a bad thing. That’s why the global elite cloud their scheme with dull and opaque names like “Special Drawing Right.”

It’s an old trick. Governments have used it for eons.

The Federal Reserve is an excellent example. After two failed central banking experiments in the 1800s, anything associated with a central bank became deeply unpopular with the American public. So, central bank advocates tried a fresh branding strategy.

Rather than call their new central bank the Third Bank of the United States (the previous two were the First and Second Banks of the United States), they gave it a vague and boring name. They called it “the Federal Reserve” and managed to hide it in plain sight from the average person.

Nearly 100 years later, most Americans don’t have the slightest clue what the Federal Reserve is, what it does, or how it has eroded their standard of living.

I think the same dynamic is at work with the IMF’s “Special Drawing Right.”

The breakdown of the petrodollar is the perfect excuse for the globalists to usher in their SDR solution.

So that’s the first option. It’s the global elites’ preferred outcome. It would be a very bad thing for personal and economic freedom. It means more fiat currency, more centralization, and less freedom for the individual.

The second option is to simply return to gold as the premier international money. Here’s how it could happen…

Trump might play along with the globalists’ schemes, but I doubt it. He’s the first president who’s openly and sincerely hostile toward globalism. He’s denounced it repeatedly.

Trump recently said, “We will no longer surrender this country, or its people, to the false song of globalism.”

In my view, there’s only one way Trump could fight the global elites and their SDR plan: return the dollar to some sort of gold backing.

Trump has said favorable things about gold in the past. So have some of his advisers.

It wouldn’t be easy. He’d face one hell of a struggle with the globalists. And winning would be far from certain.

No matter what, the death of the petrodollar, just like the end of the dollar’s link to gold, will be very good for the dollar price of gold and gold mining stocks.

When Nixon took the dollar off gold in 1971, gold skyrocketed over 2,300%. It shot from $35 per ounce to a high of $850 in 1980. Gold mining stocks did even better.

Gold is still bouncing around its lows. Gold mining stocks are still very cheap. I expect returns to be at least as great as they were during that paradigm shift in the international monetary system.

All this is why what happens after Trump’s inauguration could change everything… in sudden, unexpected ways.

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Jim Sampson's picture

WRONG

 

WRONG  

 

Wont happen.

Canadian Dirtlump's picture

I'll grow a 4th ball before the US goes on any type of gold standard. Don't ask.

MANvsMACHINE's picture

Don't ask?  About your third ball?  I was kind of curious.

Winston Churchill's picture

Its the all seeing ball mounted on his forehead.

One could truthfully call him a dickhead.

auricle's picture

Gold backed? Not anytime soon. The cabinet he has choses is derived from the existing system. In order to form a new system of gold backed currency, he would need to hire proponents for a gold backed currency. Since when does any corporation hire the exact opposite credentials(fiat money junkies) for where they want to go(honest money). Stop deluding yourself. 

VWAndy's picture

 There is no way for them to price anything in gold with things as they stand now. Everything is misspriced by vast amounts in both dirrections. From PE ratios to the value of actual labor in the other dirrection.

BaBaBouy's picture

GOLD around $45,000. should cover the Backed USD ...

Butt First, they have to make sure they actually HAVE the GOLD that is supposed to be in Knox, Unencumbered Of Course ?...

Pinto Currency's picture

The gold standard is just another fiat currency fraud where you promise not to print more paper money than you have gold to back it

Only gold money works.

And make special drawing rights great again just doesn't sound right.

Jimmy Jimmereeno's picture

"Only gold money works"  -- 100% correct.  As I noted below to Croesus, the standard must be a gold coin standard.  Anything else is corruptible.

stacking12321's picture

in case anyone was wondering, the photo is that of Apmex Chief Executive Michael R. Hayne paying rent to donald trump for 40 wall street back in 2011

3x 32oz gold bars was the security deposit

 

more here:

https://www.aol.com/article/2011/09/15/donald-trump-accepts-gold-as-depo...

 

N2OJoe's picture

Trump just said the other day that the Dollar is too strong. Gold backing it would make it's strength yuuuuge!

Troy Ounce's picture

 

 

The gold standard will come in any case. The people will demand it after banksters looted their depostis and pensions. Not going to happen? It is a matter of time. 

If Trump "does an Obama" (now an official English word, meaning "becoming a scheming & lying cunt") civil war will be the end of the US. 

Trust needs to come back. Change to a gold standard or have civil war.

 

Singelguy's picture

It is more likely that Trump will end fractional reserve banking first. No more pulling money out of thin air. The banks will only be able to lend the capital they have and not loan out depositor's money.

Al Gophilia's picture

Weights and measures. This token contains x amount of gold. Done, indisputable.

Bumpo's picture

I say ... Take the $10,000 Trump Coin Putin made, and value it at $20,000,000,000,000 to balance the books. Then End the Fed, invest in Free Energy Tesla Towers that suck energy from the sky, and move on from there. Gold is cool, though. 

VWAndy's picture

 It never worked out like you are thinking. Gold always gets dilluted either by the ones stamping it out or the shaving of the coins in use. Every single time its been tried. Eggs are harder to tamper with than gold coins.

hoist the bs flag's picture

"Konx" don't you mean the NY Fed vault...consider that gone too.

VWAndy's picture

 Ya cant get there from here.

glenlloyd's picture

I'm wondering if it'll be a gold-foil-wrapped-chocolate-bar-backed dollar standard. I am not kidding... :)

VWAndy's picture

  It would be within a year or two either by the ones stamping them or by people shaving them.

Spike8877's picture

if the dow gets past 20k look out  for 1500 bitcoin silver doing 5, 25 a day moves. i think late feb march time frame by 2018 we can see 80,000 bitcoin 100,000 gold 150,000 dow not sure on silver i hope its at 10,000.

DownWithYogaPants's picture

Another arty on ZH written by a gold bug with fevre de ouro.   Fact is the argument against a gold standard is a pretty good one.  Please see Bill Still's "Money Masters" on youtube for the full 3 hours of monetary history of the USA for why.  It's well worth the watch for the machinations of the private central bankers detailed within.

Gold is easy to corner and there is a reason Willian Jennings Bryant was against.  FYI: WJB was a decent honest man.  One of the few ever to run for office in the USA.

Jimmy Jimmereeno's picture

The fact is that the argument for a gold coin standard is a better one than any argument that you can muster against it.  I'd suggest that you devote more than a few minutes and peruse the essays here: http://professorfekete.com/articles.asp.  Professor Fekete should be able to enlighten you.

Contrary to your naive viewpoint, gold is not easy to corner; nor are most commodities (altho gold is not a commodity it is money) which is why one rarely hears of successful corners.

MEFOBILLS's picture

Fekete is wrong on the real bills doctrine. 

Gold bugs cherry pick sections of history, but ignore the bits they don't like, or don't fit their narrative.  I consider this a form of denial, which in turn is intellectually dishonest.

There were only two gold systems in history that worked well.  

ONe was the hanseatic league.  They used the law to recall coins, because said coins would go off and hide.  Hiding is a feature of gold money.

The other was in Venice.  There they had a state bank, and any gold you had must be deposited.  From then on, your exchange was done by ledger mechanics by the bank.  In this way your gold would not wear out, or become clipped.

For foreign trade, the Venicians would pay in Gold, but would recall it right away due to their ability to make goods.  Exporting goods recalled the gold they had previously used buying foreign goods.  Withoug a strong export sector, their internal money system would have fallen apart.

The post bretton woods TRADING gold standard, which only applied to foreign goods exchange, worked ok up until Nixon's deficit spending on Veitnam.

All money is law - it is not metal.  Claiming magical properties for metal is not good science, and further does not comport with any history.

TeethVillage88s's picture

Fekete is important to MMT Economics. So I think your point is important to explore.

I should read again something from Fekete. It is well known as important economics.

MEFOBILLS's picture

You are also wrong on the "cornering" of gold.

Bankers rode their credit on top of gold in a ten to one ratio.  During depressions, bank credit must be paid back as per the debt instrument.

In order to collapse the debt instrument, bankers will take gold in exchange.

In this way, they came to own the gold, patents, business, and land assets of the producing economy.

 

As usual the claims made by goldsters, don't stand up.  Reserve loops of banks in the  old days had to be filled with gold, so they desired it, and would scheme to get it.

MEFOBILLS's picture

Contrary to naive viewpoint.  

 

Pot call the Kettle black much?

 

TeethVillage88s's picture

Gott sie danke. A sane voice.

Got a problem as I catch up on sober discussion.

What is this?

Don't click on.

https://m.youtube.com/results?search_query=Antarctica%2C+The+true+face+%...

Anyone?

I think I have been infected by NSA. NSA. Don't Click if you don't have technical expertise.

I was watching a video on Megaliths on Youtube... but ended up losing youtube... message firefox does not understand address, ...

VWAndy's picture

 The only one that works in a nuts and bolts kinda way is an energies backed/valued coin. Because it has a stable real world value that can be correctly measured. This measuring with rubber bands is bunk. Gold in day to day trade can and will be cheated in the old ways like always.

 Another way to look at it.

  If the coin has a value in buying power of one pint of 100 proof.=x   Then we have a fix thing to measure from.

  Its a thing I was taught about math. No amount of correct math will solve for a bad measurement.

MEFOBILLS's picture

Energies backed coin?

 

Money's true nature is Law.  

It must flux in relation to goods and services production.  When you labor, you dont labor for energy.  You labor to make goods and services.  

Other people also labor to make goods and services.  You put your goods and services out there in the market, and you trade with others.  That is what economy is.

You transform the earth into goods and services, and you use money as an agent of the transaction.  To make the transaction equal as possible, without price rigging, then the amount of goods and services must be in volume relation to the money in supply.

Energy of the earth is used to transform said earth to goods.  To make money equal to energy is a ridiculous idea.  Energy is part of the production process, that is all.  

VWAndy's picture

 You lost me on that last paragraph. Could you explain that in a bit more detail?

Secret Weapon's picture

You have to actually own and possess the gold before you can back up your paper.  The Fed Gov is broke ass and Ft. Knox is empty.  This will not happen.  Remember kids, the bankster game is to crater the dollar and replace it with a world currency.  Time is running short.  Tick Tock.

https://socioecohistory.wordpress.com/2014/07/26/flashback-1988-get-read...

Johnny Caine's picture

Gold backed. Must be a bunch of super wealthy AssClowns on ZH. Everytime I pop into the comment section a majority group of idiots want to go from middle and upper middle class to poor as fuck. Gold sounds good, and that's about it.

MEFOBILLS's picture

Our friends who ran their exchange rate game against humanity, called gold "very good for us."  Read the protocols if you don't believe it.

Ass Clowns is right. 

If you cannot learn from history, you are doomed to repeat it.

tmosley's picture

Did you grow your third ball when Trump won?

Canadian Dirtlump's picture

Precisely. The world got a huge injection of machonium when our man won.

Handful of Dust's picture

I bet you Canadians are sorry that whoopi, sharpton, clooney, etc didn't pack their bags and head up there after all.

Croesus's picture

I would love to see it happen, but I'm not going to hold my breath.

It would fix a lot of problems, pretty much overnight, but a hot war would be what we'd wake up to.

Winston Churchill's picture

Wither all that gold residing in Ft.Knox, it would have to be a spider backed dollar.

Croesus's picture

This is true...and that dirty little "secret" officially coming to light would be the death of the Fed.

It would also potentially mean that a gold confiscation would be in the offing.

Jimmy Jimmereeno's picture

Wrong.  Gold was confiscated when the U.S. left the gold standard; it would not be confiscated upon a return - regardless of how much or how little is left in Ft. Knox.  But be sure to realize that a workable return to gold requires a "gold coin" standard and not the type of standard that was in effect in 1933.

WernerHeisenberg's picture

True, but gold buffaloes are still available

VWAndy's picture

  Dream on suckers.

Able Ape's picture

I'll raise a glass of cheer to THAT!...When something doesn't work quite right, you change it - it's what you DO!...

falak pema's picture

haha, the wet dream of goldbugs with the Duck as Midas !

VWAndy's picture

 Gold pump and dump?