The Tactical Intelligence News Brief – October 6, 2009

by Erich

What Happened

inflation
The Independent, a well-known UK newspaper, today broke a story indicating that the Arab states will be dumping the dollar over the next 9 years. Their goal is by 2018 they will be pricing oil no longer in dollars but moving to currencies such as the Japanese yen and the Chinese yuan, the euro as well as gold. The Independent claims that the Arabs have held secret meetings with China, Russia, France, and Japan about this. It seems that everyone involved (which also includes Brazil and India) is completely for it.

What this Means

If this really happens and the Chinese and Gulf Arabs get their way in that oil is no longer priced in dollars then you can kiss our currency goodbye. The world will soon follow suite and dump as much dollars as possible.

How Does it Effect You?

Well first of all — before I go into the affects — I don’t feel the dollar is going to make it the entire 9 years. You can’t deficit spend $1 trillion on a health care plan and hundreds of billions of bailout money and expect the world to have confidence in our dollar. The dollar is doomed to fail, that is the nature of all fiat currencies.

But as far as how it effects you is, I believe, two-fold:

  1. Gold Price is Going Up: Since converting currencies from the dollar to other options will be difficult for the Arabs to do right away it looks like the only recourse is to get rid of their dollar reserves and buy gold. This in combination with China urging its citizens to buy gold will drive the price of gold up.
  2. Hyperinflation is Coming: If the world markets drop the dollar on a global scale, all our money will come flooding back in and we’ll see some major hyperinflation. I’m talking huge. Zimbabwe, Argentina, Wiemar-Republic-Germany huge.

The fact is, this is eventually going to happen. If you haven’t started yet, it’s time to get out of dollar-based assets and see about trading a good chunk of your savings for some precious metals like gold or silver. In the near future I’ll be covering quite a bit about how to get yourself financially prepared for the coming hard times but in the meantime, see about getting your hands on some physical gold and silver bullion. One of my main sources is through APMEX (American Precious Metal Exchange). They provide great service and have been 100% reliable.

Resources

Here are links to the Independent article (one covered by Business Week):

Business Week: Oil Not Priced in Dollars by 2018?
The Independent: The Demise of the Dollar

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