Peter Schiff : The Dollar losing Reserve Currency Status to Yuan and Gold

In his latest blog market analyst Peter Schiff wrote that : the Dollar’s Share of Global Currency Reserves at 6-Year Low; Yuan’s Share Biggest Ever . The percentage of US dollars held as currency reserves globally dropped to the lowest level in nearly six years in the second quarter of 2019 according to the latest IMF data. Meanwhile, Chinese yuan made up the biggest percentage of reserves ever. The dollar’s shrinking share of global reserves comes as countries like Russia and China move toward de-dollarization in an effort to undermine the ability of the US to weaponize the dollar as a foreign policy tool. The global gold rush on the part of central banks is part of this movement. Reserves held in dollars globally totaled $6.79 trillion in the second quarter. That represented 61.63% of allocated reserves. This compares with $6.74 trillion, or 61.86%, in the first quarter of the year. It was the lowest percentage of dollars held as a reserve currency since Q4 2013. The share of Japanese yen, euros and Chinese yuan all increased in Q2. In fact, the share of yuan held by central banks rose to 1.97%. That is the highest level since the IMF began reporting its share of central bank holdings in 2016. Many central banks are also replacing dollars with gold. Through the first half of 2019, a dozen central banks had increased their gold reserves by at least 1 ton. Central bank gold purchases this year continue a trend we saw through 2018. In total, the world’s central banks accumulated 651.5 tons of gold last year. The World Gold Council noted that 2018 marked the highest level of annual net central bank gold purchases since the suspension of dollar convertibility into gold in 1971, and the second-highest annual total on record. Russia has led the way in accumulating gold. The Central Bank of Russia has added around 106 tons of gold to its reserves this year. Meanwhile, Russia almost completely divested itself of US Treasuries last year. According to Bank of America analysts, the amount of US dollars in Russian reserves fell from 46% to 22% in 2018. Russias gold bet has been paying off. The country’s gold reserves topped $100 billion last month. The US dollar remains the dominant reserve currency, but there is a clear movement toward de-dollarization. And it’s not just countries like Russia and China moving away from dollars. Even Europe has joined the de-dollarization party. Peter Schiff has talked about central bank gold-buying and the move away from the greenback. He has noted that the US went off the gold standard in 1971, but he thinks the world is going to go back on it. The days where the dollar is the reserve currency are numbered and we’re going back to basics. You know, everything old is new again. Gold was money in the past and it will be money again in the future, and central banks that are smart enough to read that writing on the wall are increasing their gold reserves now.” The US dollar's days as the dominant global reserve currency are numbered. The widening US deficits will soon alienate foreign buyers of US Treasurys, sending yields soaring higher while causing the dollar to depreciate by as much as 30% (though at least the Fed would no longer have any trouble meeting its inflation target). For several years I have been predicting more like 50%, which would mean that about half of the American population would be rudely shocked by no longer being able to afford the life style which were they were previously used to. Although losing the status of reserve currency used to happen more slowly, these days we are looking at about exponential rates of change, which indicates that the collapse of the US Dollar as the global reserve currency could happen relatively quickly. So far, most of the issues which have been dividing Americans were due to the ruling classes driving divide and conquer strategies toward oblivion. In the bigger picture, that the banksters were able to create the public money supplies out of nothing as debts is orders of magnitude more significant than any issues related to race, religion, sex, or whatever. However, the established systems have been able to get away with massive lying by omission regarding the debt slavery systems generating debt insanity numbers. From a sublime point of view, the relatively sudden consequences of the US dollar losing its status as the global reserve currency is quite interesting to speculate about, especially regarding the degree to which the ordinary people that impacts will continue to be divided and conquered, or perhaps will recognize the deeper nature of the debt slavery systems which they were living inside for generation after generation. Monetary policies, based on being able to make the public money supplies out of nothing, are awesome to contemplate, as those are the sources of the boom bust cycles, which can whip saw deflation and inflation. However, those wild swings usually ended with hyper-inflation. If the US dollar lost its status as global reserve currency with relative alacrity, I expect that the average American will be hit with about a 50% inflation in the cost of almost everything, which will mean that a moiety of them will have their life style destroyed, if continuing to live the way that they were used to became impossible at similar rates as that the US Dollar lost its status as global reserve currency. After those kinds of stresses, one can expect various forms of regression, including that the effects of the divide and conquer preparations regarding relatively trivial issues become as suddenly significant as the underlying issues of the collapse of the affordability of life styles simultaneously manifest. Political economy based on governments enforcing frauds by private banks has been developing about exponentially increasing fraudulence, due to the about exponentially advancing technologies which have made that possible, such that the actually existing systems have become globalized electronic monkey money frauds, backed by threats of force from apes with atomic weapons. Inside that overall over context, the combined money / murder systems of the American Dollar / American Military, have made the majority of flesh and blood Americans relatively negligible factors, since, as the ruling classes became increasingly psychotic psychopaths, those ruled over became increasingly incompetent political idiots. While the US dollar losing its status as global reserve currency could have devastating consequences upon the majority of flesh and blood Americans, the actually existing systems have rendered those individuals, and thus their concerns, relatively unimportant in the bigger picture. Given that the amounts of virtual wealth created out of nothing exceeds actual physical wealth by at least a couple orders of magnitude, and that ratio is automatically getting worse faster, as that "money" made out of nothing ultimately "pays" to strip-mine a fresh planet's natural resources, at exponential rates that correspond to the about exponential increase in those kinds of public "money" supplies, it no longer is possible to fully image whatever any kind of "correction" could be comprehended in that overall context. In my view, as usually the case with Zero Hedge articles, the article above presents grossly understated assessments of the seriousness of the situation. The vast majority of people are quite able and willing to deliberately ignore or misunderstand the mathematics of exponential functions, as those arose through the prodigious progress in physical science, channeled through sociopolitical systems based on being able to enforce frauds. Pretty well nobody is fully able to imagine what it means when "financialization" (as a fancy euphemism for enforced frauds) has gone into hyper-drive. Indeed, the vast majority of people used to not know, and not want to know, about the runaway debt slavery systems which they were born into. However, as those debt slavery systems drive runaway debt insanities, the underlying issues are that since the debt controls were backed by the death controls, those combined money/murder systems are rushing toward eruptions of death insanities. Individual flesh and blood Americans have allowed, since they had no politically possible ways to actually stop, the developments whereby "their" governments enforced frauds by private banks and the big corporations which grew up around those big banks. Those individuals have been left in the dust, behind systems which made exponentially more electronic money out of nothing as debts, while the matching exponentially increasing abilities to threaten with weapons of mass destruction was able to continue to work through the inertia of social habits in order to maintain the debt insanities which had thereby been made. As far as I can tell, pretty well nobody who has been successfully making money within insane runaway money systems is able and willing to gain any better overall perspective upon the bigger picture. Rather, I would describe the apparently successful money managers like as in this Aldous Huxley quote: "They are normal not in what may be called the absolute sense of the word; they are normal only in relation to a profoundly abnormal society. Their perfect adjustment to that abnormal society is a measure of their mental sickness." Similarly from Jeddi Krishnamurti: "It's no measure of health to be well adjusted to a profoundly sick society." Natural selection pressures drove the development of human civilization to become as dishonest as humanly possible. Prodigious progress in physical science has primarily been applied to back up bigger frauds with more force. Indeed, the about exponential progress in technology has primarily manifested as about exponentially increasing financial fraudulence. However, almost nobody who was successfully adapted to making money within those insane money systems is able and willing to recognize the degree to which they were participating inside a civilization which was therefore behaving in ways which overall amounted to about exponentially increasing psychoses. The article above suggests that there may emerge some new United Nations kind of global reserve currency, after the US dollar losses that status. However, I believe that such optimism is delusional. The UN was an organization advanced by the international banksters, in order to achieve aspects of their globalization agenda. All of that continues to be based on being able to continue to enforce frauds, such that systems of legalized lies, backed by legalized violence could continue to become about exponentially more dishonest, despite that being able to back up lies with violence never stops those lies from still being fundamentally false. I have never yet read anything anywhere by anyone which engages in satisfactory deeper analysis of the ways that the combined money/murder systems have become globalized electronic money, backed by threats of force from atomic weapons, such as exemplified by the US Dollar backed by the US Military. Rather, almost everyone who has been relatively respected for having been able to make money within an insane money system tend to be too totally insane to recognize how insane they were. Hence, articles like the one above typically provide some superficially correct analysis, which understates the seriousness of the situation. The essential issue is that there was only one political system, organized crime. The excessively successful applications of the methods of organized crime through the political processes have resulted in Globalized Neolithic Civilization becoming runaway debt slavery systems, manifesting as out of control criminal insanities. However, since the biggest and best organized gangsters have made and maintained that Civilization, and their almost totally dominated that society, those who personally adapted better to making money within insane money systems are not remotely close to being in the right ball park of estimating how insane that situation actually has become! From the perspective of superficially correct analysis, I would initially expect that 50% is a better guesstimate, rather than 30%. However, that merely gets the little ball rolling, like at the start of an awesome avalanche. Somehow, most individual flesh and blood Americans continue to be able and willing to not try to understand the systems of electronic money, backed by atomic weapons, which have rapidly developed within the life time of those still alive today. Rather, many of those individuals have been behaving like increasingly incompetent political idiots inside that context, while, similarly, those individuals who personally adapted better to operating inside that overall context were thereby actually behaving in ways which were even more astronomically amplified insanities. At the present time, it appears reasonably possible to assert that the laws of nature do not change, but rather, the ways in which energy transforms are the paradoxical ways in which "nothing lasts forever." In order to attempt to approach some deeper analyses of what it means to become a global reserve currency, one should recognize that money is measurement backed by murder. Hence, the US Dollar losing its status as global reserve currency would have the related aspects of the US Military losing its dominance. However, none of those kinds of considerations make good sense anymore, after the development of an overwhelming abundance of weapons of mass destruction. For several years I have been suggesting that for the US Dollar to lose its global reserve currency status could be the trigger for subsequent catastrophic consequences, not only upon the majority of individual flesh and blood Americans, but also all around the world, inside its political economy based on runaway electronic frauds backed by runaway atomic forces, and so on and so forth ...









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