This is big.
It’s a direct blow to the USD’s hegemony as supreme ruler of the currency market.
It has broad ramifications for each of us because it’s China’s new gateway to the world.
The true meaning of it will only be fully revealed to us 4-5 years down the line, but we can already begin to understand its possible impact – the end of the USD reserve currency status.
That is what’s at stake here.
With 7 out of every 10 currency units in the banking system being dollars, and with 50% of the currency outside the U.S. banking system, America has been able to dodge runaway inflation, though any other nation would be Sodom & Gomorrah by now, given the size of the debt and the cost to finance it.
For the global commerce network to operate independently of the USD would mean that less of it is needed, which means reserve accounts throughout the world can begin emptying their balances from what are now excess dollars.
The U.S. banking system cannot afford to experience a tidal wave of currency coming back to the system in the form of bonds or cash.
It would devastate the already fragile system.
The way Portfolio Wealth Global analyzes this, countries will not want to take the dollar down together. They have a lot to lose from placing stones in front of the Trump administration.
Instead, we see an environment, in which governments SHOVE THEIR NOSES much more than they do now. The private sector will endure elevated fiscal intervention.
In the U.S., this means renegotiating trade agreements, blocking big mergers, such as the Broadcom/Qualcomm one, and firing key staff members constantly until only the people loyal to the agenda remain in office.
It’s not good. It doesn’t smell good, and it won’t end well.
The Federal Government should have taken the pill in 1971 when it had the chance. It’s too late now.
You can’t turn back the clock on the lost purchasing power of the dollar, nor can you bring back the middle-class from the dead.
The wealth gap between demographics in the U.S. are the worst I’ve ever seen in 22 years, and the next crisis will require the president to take drastic measures to keep the political divide at bay.
You see, the last thing the world wants is for America, which stands as its beacon of light, to lose its symbolism.
Mark my words – there is no scenario, in which the U.S. shows weakness and the Chinese/Russian block doesn’t immediately attack and muscle-in, be it by armed conflict or by economic warfare.
That’s the reason gold is already at $1,340 and will probably hit $1,400 this year.
Personally, I think the Chinese are too smart to instigate a real war, and they know they’re holding the cards.
Their economy is robust; their middle-class is growing by the second, their ability to forge alliances is increased with each passing moment, and this is all signaling one thing: America isn’t the sole superpower.
America’s dirty laundry is visible for all to see.
There is no room for indifference or for freezing in your place right now.
As an individual, you should (1) stay engaged and remain focused, and (2) think about your financial preferences.
Save and conserve. Educate yourself. I’m currently spending four full hours a day reading. This activity will empower you.
Howard Marks, who is one of the world’s most successful investors, wrote “The Most Important Thing Illuminated,” and that’s the book I’ve been reading for the past two weeks.
Nourish your intellect with knowledge, specialized data, which you can act on.
It’s time to press forward. I’ll be in a 10-hour marathon starting tonight, as the Chinese Petro-Yuan could ignite 3 specific commodities to become strategic, and I want to take action immediately.
Expect a full update tomorrow.