muses of the moment

May 19, 2012

Devaluing the Dollar

Filed under: Dollar Crisis, Inflation, Precious metals, The Dollar Crisis — totallygroovygirlfriday @ 1:13 am

Jesse has a very good post on a possible way the dollar will be “devalued” at some point in the future. Click here.

By using a new SDR for international trade, particularly oil and natural gas. Countries could still use national currencies internally. groovygirl’s big question is what will past and future US debt be valued in when/if this switch is made? Will gold and silver be valued in national currencies or only SDRs?

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5 Comments »

  1. Gold is money regardless of what Martin Armstrong says. It is used by the BIS to settle inter governmental balances.
    Gold is not currency.Currency is fiat monet with a gold backing vis a vis the BIS whose members have been the lenders to government for the last few centuries.
    So to answer your question gold will remain base/standard measure for all fiat money or other equivalents. The point is that Gold is real money and all else is currency. Sorry MA but you are plain wrong here.

    Comment by Guy de Simon — May 19, 2012 @ 11:44 am

  2. Hi gg-

    As always, thanks for your diligent posts. This latest one by Jesse is just another in a long line of indicators about where we are heading. My question that I will pose to you and other well known sites is : What to do with 401K and other monies tied up beyond my reach? I realize that you don’t give financial advise, but is Jesse and others saying that we may wake up one day to our balances being much less? How exactly would that happen, and is there a reference guide to go by? ( sort of like ” Surviving the crash ” for dummies book. I know there are many books out there ( Peter Schiff ) comes to mind, but what have you personally found to be the best overall prediction? I’ve already bought as much physical as I can, both in an IRA and in my possession. Also bought PHYS, PSLV, and CEF in my tax deferred retirement accounts. Thanks.

    Comment by Anonymous — May 19, 2012 @ 1:22 pm

  3. Let me give this some thought and get back to you.

    gg

    Comment by totallygroovygirlfriday — May 19, 2012 @ 4:42 pm

  4. Anon,

    It is true that groovygirl doesn’t give financial advice. It sounds as if you have a good allocation. 401ks can be limiting in investment options, but you seem to have other investments in other investment vehicles. It is possible that 401ks will be worth less, but not for sure. It depends on how desperate the situation gets. Most 401ks are held by baby boomers, who are still the largest voting block. So the likelihood of a complete wipe out is limited. However, the devaluation of the dollar or forced investment in T-bonds is a possibility. Your other investments would probably cover any losses in the 401k, if that should happen. And, I believe we would have some warning of a “forced” investment (something like, no deferred tax for 401ks if they are not invested in government bonds, T-bills, etc). They would announce that, so you would have the opportunity to liquidate (and of course, pay the tax penalty), before they would move your funds for you. Many people may take advantage of that option, if they are promised a guaranteed return. Baby boomers want security at this point in their life, not financial investments.

    GG thinks the government would force state and federal pension funds into bonds before they would demand private 401ks. So that will be a possible warning of things to come.

    Jim Sinclair and Faber would probably suggest some physical gold/silver outside the US as another optional allocation.

    gg

    Comment by totallygroovygirlfriday — May 21, 2012 @ 11:35 am

  5. Thanks gg. Not too concerned just yet but doesn’t hurt to be prepared!

    Comment by Anonymous — May 26, 2012 @ 6:55 pm


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