When the DOLLAR DIES, What Will REPLACE It?

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It is pretty evident that the US dollar is headed for the dustbin of history. Notwithstanding the fact that it is currently It is pretty evident that the US dollar is headed for the dustbin of history.

 

Notwithstanding the fact that it is currently experiencing a ‘dead cat bounce’ of strength from other economies’ perception that we defied the laws of economics and emerged from the “money printing experiment’ of QE 1 – 3 unscathed, the dollar has no fundamental strength behind it. 

The US is in debt $18 Trillion dollars, and that is pretty much the only thing that is backing up the dollar. 

Now that we are all on board that at some point in the not-so-distant future the dollar will crash and burn, then what are we to expect to replace it?

 

LK in Hong Kong, in an article on Bullionstar.com says, “ We know it has been the purpose and hope of its creators that when the whistle on fiat currencies blows, people can be convinced to accept this [the SDR] as having value, just because it appears to be issued and controlled by a cross-national group of men in suits. 

But what is the SDR? It is still a basket of the same fiat currencies. So, we already see that this might only be the dream of hopeful men in suits and probably won’t work when it is most needed.”

When the dollar crashes, there will no doubt be a big push for a gold-backed currency. After all, the dollar used to be backed by gold, and that worked out pretty well.

The problem is that the US does not have it’s stated gold reserves of 8,000 tonnes, as it has leased, sold and pilfered most of the gold away. Official reports peg the New York Fed’s most recent holdings “is now under 6000 tons, or 5,989.5 to be precise”  for the first time in the 21st century.according to Zerohedge. 

Considering the Fed won’t allow an audit of their gold, and other reports that there is hardly any gold left, one has to ask, “Just what are they hiding?” I suspect the fact that they do not have the gold they claim to have – not even the 6,000 tons.

Dr. Paul Craig Roberts says, “There is no reason for partial delivery [to Germany] if you have the gold.  There is no reason to sell all these naked shorts if you have the real gold you can dump on the market.” 

Dr. Jim Willie believes there is only about 700 tons of gold left in New York.

Whereas China has been furiously buying gold over the last few years. Shown in the chart below is a conservative estimate of Chinese gold holdings. Dr. Jim Willie has said that China could posses over 20,000 tons. 

“Chinese Premier Li Keqiang has asked the head of the International Monetary Fund to include China’s yuan currency in its special drawing rights (SDR) basket. “… while the official IMF meeting to determine whether the Special Drawing Right should be extended to include China’s currency will take place in October, the informal board meeting will take place in a few weeks in May.
 

As such, don’t be surprised to wake up one morning to headlines blasting that Chinese gold holdings have gone up by 2x, 3x, 5x or (more x) since 2009, a long-overdue update which will catalyze the next major leg higher in the precious metal,“ states Zerohedge.
 

GOLD: COULD IT BE ADDED TO THE SDR?
 

 

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