According to financial expert Jim Rickards, the Federal Reserve Bank’s leverage is currently 80 to 1, a truly insolvent condition. For each dollar they have, there are 80 dollars of liability. He expects the dollar to drop 80 to 90 percent in value. On a relative basis, gold will appear to go up in value. Silver is expected to do the same.
Jim is adamant that the collapse of the dollar is coming. This is not the end of the world, just the U.S. Dollar.
The Fed is not transparent so there is no way to predict how severe their situation really is. The top five banks who were at risk in 2008 are now bigger and riskier than they were then. There are less community banks now than there were in 2008 thus the system’s risk is more concentrated. In addition, other major countries such as Russia, are threatening to dump the dollar as their standard payment medium. You can see why Obama is so vocal about Putin. I believe it is really about protecting the dollar’s reserve status. Obama is charged with keeping the party going as long as possible.
All the major central banks have the same problem. Their rationalization is that they can simply print more money. The problem is that as they print more money, inflation heats up to a potentially “hyper” state. Gold keeps everyone honest because you can’t just go create more to accommodate your policy. $8,000 to $10,000 gold is not an unreasonable expectation. It isn’t that gold’s value is up, the value of the dollar will go down further. It is all about protecting purchasing power.
How long do we have before the dollar collapses in value? What will precipitate the destruction the dollar? The reality is that we have an unstable complex system. Only Our Heavenly Father knows the one event that will trigger the domino effect of financial destruction. Sixty year financial veteran Richard Russell says:
“In the investment world, of course, peace of mind is a particularly rare commodity. The rise in the stock market since its 2009 low has now exceeded five years. Common sense tells us that the longer an advance continues, the nearer it is to its conclusion. In the low area of 2009, fear was the dominant emotion. As the advance pushes into its sixth year, fear has given way to boldness and greed. On this thesis alone, I have elected to move out of common stocks. After long consideration, I have concluded that the area I prefer to be in is pure wealth.
By pure wealth, I mean physical silver and gold. That’s my best advice for subscribers today. “ To subscribe to his newsletter: https://ww2.dowtheoryletters.com/ServicesOnline.nsf/Subscription+Form?OpenForm
The system is now so unstable that the collapse can occur at any time. There is no need to be afraid of this event. Simply prepare as best you can. Maintain extra food supply and rotate it. Buy gold and/or silver as you can afford it. Keep enough cash available in case there is a bank holiday. Stay liquid. Revenue producing agri-land is always a good investment if you have sufficient liquidity otherwise. Minimal monthly obligations will also provide for weathering the coming financial event. Most of all, be Spiritually prepared. Those who hear Our Heavenly Father will be guided through these times in peace. Others will be looking to you since their world has collapsed. They will need assurance that they will survive and you will be able to direct their attention to Our Heavenly Father, their Creator.