- James Turk: Dollar Will Eventually Go Over the Cliff!
by Greg Hunter’s USAWatchdog.com
Gold expert James Turk says the U.S. dollar is not going to stay strong. Turk contends, “Canada, one of the closest allies of America, just announced a Chinese trade arrangement to deal in Chinese yuan with Canadian dollars. That bypasses the U.S. dollar. So, the outlook for the U.S. dollar is not good, despite this temporary strength that we are seeing now. It’s not good and, to me, the writing is on the wall for the dollar.”
Turk goes on to say, “What the U.S. government will do, though, is everything in its power to protect the dollar’s position, and that means more capital controls. There are already capital controls in place. It’s almost impossible for a U.S. citizen to come over here in Europe and open a bank account. They just don’t want to deal with U.S. citizens anymore. Another type of capital control is that $16 trillion sitting outside the United States cannot come back and be spent in the United States. If that were to happen, all those dollars overseas would fall to a steep discount to the domestic dollar because they would not have the same usefulness if they can’t be spent in the United States.” But wouldn’t that be a default that would crush the U.S. dollar? Turk explains, “It wouldn’t crush the domestic dollar. It would crush the international dollar relative to the domestic dollar. The domestic dollar will be inflated away in any case over the longer run. The immediate impact would be on dollars outside the U.S. and, yes, that is a default.”
How long can this go on? Turk takes us back 100 years to the start of the Federal Reserve and says, “What the government is supposed to do is maintain stability and purchasing power of the dollar. Today, the dollar purchases one penny of what a dollar in 1913 purchased. That’s how bad the inflation has been. That big picture thinking is important because we’ve had inflation and debasement of the dollar for 100 years. People say it’s been 100 years. Why couldn’t it go another 100 years? Well, if you look at the Roman Empire, for example, it debased the denarius for 100 years until the denarius fell off the end of the table. Just because that trend has been in place, it is not going to continue forever. The key here is the amount of debt we have in the system and the amount of money the politicians are spending. The reason why we have not had hyperinflation is the U.S. government has managed to keep its debts lower than they should be because the interest rates are zero. . . . We’re walking on a tight rope here, and it could go either way. To me, we are looking at more currency debasement here . . .”