Doug Casey: How to Prepare for When Money Dies!

• The world is heading towards a global currency crisis. I do not believe that only the USD will collapse. I believe that all fiat currencies will become toilet paper via hyperinflation. The progression of this crisis will very likely be: Euro, UKP, JPY … USD. Along the path of currency debasement, the rest of the world’s fiat currencies will tank via competitive devaluation! I do not believe that the Illuminists will allow any currency even the Chinese Yuan to threaten their global currency/monetary hegemony. Got physical gold yet?
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  How to Prepare for When Money Dies !
  By: The_Gold_Report 
  If dollar-dumping turns from a trickle into a flood, look out.  Exploding prices (aka exorbitant inflation) resulting from the devaluation of  the dollar will compound the problems we saw in 2007–2009. Catastrophe will  come when everybody realizes that the dollar is an “IOU nothing.”  That’s the downside in the decade(s) ahead, according to Casey Research  Chairman Doug Casey. But an optimist at heart, in this exclusive interview with The Gold Report, Doug also identifies some reasons to be hopeful.
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  The Gold Report: You’ve  been talking about two ticking time bombs. One is the trillions of dollars  owned outside the U.S. that investors could dump if they lose confidence. And  the other is the trillions of dollars within the U.S. that were created to  paper over the crisis that started in 2007. Are these really explosive  circumstances that will bring catastrophic results? Or will it just result in a  huge, but manageable, hangover?
  Doug Casey: Both, but in sequence. One thing that’s for sure is that  although the epicenter of this crisis will be the U.S., it’s going to have  truly worldwide effects. The U.S. dollar is the de jure national currency of at  least three other countries, and the de facto national currency of about 50  others. The main U.S. export for many years has been paper dollars; in  exchange, the nice foreigners send us Mercedes cars, Sony electronics, cocaine,  coffee—and about everything you see on Walmart shelves. It has been a one-way  street for several decades, a free ride—but the party’s over.
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  Nobody knows the numbers for sure, but foreign central banks, and individuals  outside the U.S., own U.S. dollars to the tune of something like $6 or $7  trillion. Especially during the recent crisis, the Fed created trillions more  dollars to bail out the big financial institutions. At some point, foreign  dollar holders will start dumping them; they are starting to realize this is  like a game of Old Maid, with the dollar being the Old Maid card. I don’t know  what will set it off, but the markets are already very nervous about it. This  nervousness is demonstrated in gold having hit $1,900 an ounce, copper at  all-time highs, oil at $100 a barrel—the boom in commodity prices.
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  Some countries are already trying to get out of dollars, but it could become a  panic if the selling goes from a trickle to a flood. So, yes, it’s a time bomb  waiting to go off, or maybe a landmine waiting to be stepped on. If a theatre  catches fire and one person runs out, soon everybody rushes toward the door and  they all get trampled. It’s a very serious situation.
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  TGR: If panic erupts on the U.S. dollar, would products manufactured in  the U.S. become super-cheap or super-expensive?
  DC: They would become super-cheap. Everybody says that devaluing the  dollar will stimulate U.S. industry because the products will become cheaper  and foreigners will buy them. This is a huge canard everybody repeats and  nobody thinks about. Yes, it is true for a while, but if devaluation were the  key to prosperity, Zimbabwe should be the most prosperous country in the world  as it has already collapsed its currency.
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  A strong currency is essential for a strong economy. Sure, a strong currency  can hurt exporters for a while. But, a strong currency encourages manufacturers  to invest in technology, and become more efficient. It rewards savings and  results in the growth of capital that’s critical for prosperity. A strong  currency allows businessmen to buy foreign companies and technologies at  bargain prices. It results in a high standard of living for the country, and  yields social stability as a bonus. The idea that decreasing the value of  currency to stimulate exports is a short-lived, stupid and counterproductive  solution to the problem. People seem to forget that while the German currency  was rising about sixfold from its level of 1971, and the Japanese yen about  fourfold, those countries became the world’s greatest export economies. It  didn’t happen despite a strong currency, but in large measure because of it.
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  TGR: Given that the U.S. is the world’s biggest consuming nation,  wouldn’t fleeing the dollar create a big consumer vacuum in the international  community? Doesn’t the rest of the world want to keep up the high level of  exports to these U.S. consumers?
  DC: That’s exactly why the U.S. is in such trouble; it’s idiotically  focused on consumption, while only production can create prosperity. The world  doesn’t need to stimulate consumption. This is another canard, because  everybody has an infinite desire for goods and services. I know for myself, I’d  like not just a car, but 10 Ferraris, a couple of Gulfstreams and 10 houses  around the world. So, by myself, I have an infinite desire for goods and  services. Multiply that by 7 billion other people. The only way to gratify  those desires is by producing enough to trade with other people to give you  what you want. When so-called “economists” think the problem is that  we don’t have enough consumption, that shows that the profession itself is  bankrupt. It’s actually quite embarrassing.
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  …. for the full report click here!

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