The International Monetary System Is About To Collapse… Here’s What Comes Next

“It is possible to have more than one reserve currency.”

These are the recent words of Jerome Powell, the chairman of the Federal Reserve.

It was a stunning admission from the person with the most control over the US dollar, the world’s reserve currency.

Reading between the lines, Powell’s remarks are a strong hint that the current U.S. dollar-based international monetary system is on its way…and soon.

Even the elites who run this 50+ year old system can no longer accept the farce of maintaining it.

This finding is not surprising; it’s the logical result once you put the pieces together to see the big picture. However, what is noticeable is the change in tone. For the first time, the financial establishment speaks thus openly. This tells me that a big change could be imminent.

Although the elites would prefer to continue to exploit the current system, they realize that it is broken and there is a need to close the gap with a new system that they hope to control.

No one knows what the next international monetary system will look like, not even the elites. However, they know what they want it to look like and work hard to shape that outcome.

Here is the bottom line.

The current monetary paradigm is coming to an end and we will enter a new one as the elites attempt to “reset” the system.

We could see…

  • A supranational digital currency replaces the US dollar
  • The end of paper money
  • The birth of an Orwellian surveillance system that monitors and controls every penny you earn, save and spend

This is the outcome desired by the elites.

Unfortunately, the elements of such a system are already being put in place. The idea is to prepare it, so that they can try to implement it when the current monetary system collapses, which could happen much sooner than most think.

The era of Fiat currency

August 15, 1971.

It marked one of the most significant events in US history, on par with the stock market crash of 1929, the assassination of JFK, and the 9/11 attacks.

Yet most people don’t know…

It’s been over 50 years since that fateful day forever changed America and the world. Here is what happened.

It has been rightly said that “he who holds the gold makes the rules”.

After World War II, the United States had by far the largest gold reserves in the world. In addition to winning the war, this allowed the United States to rebuild the global monetary system around the dollar.

The new system, created at the Bretton Woods Conference in 1944, tied the currencies of virtually every country in the world to the US dollar through a fixed exchange rate. He also pegged the US dollar to gold at a fixed rate of $35 an ounce.

The dollar was said to be “as good as gold”.

The Bretton Woods system made the US dollar the world’s premier reserve currency. He forced other countries to store dollars for international trade or to trade with the US government for gold.

However, he was doomed.

Rampant spending on war and welfare caused the US government to print more dollars than it could repay with gold at the promised price.

By the late 1960s, the number of dollars in circulation had increased dramatically relative to the amount of gold backing them. This encouraged foreign countries to exchange their dollars for gold, depleting the United States’ gold supply at an alarming rate.

As a result, the United States’ gold supply fell by more than half, from 574 million troy ounces at the end of World War II to around 261 million troy ounces in 1971.

The situation prompted the US government to take a drastic decision. It could either do nothing and see its gold holdings evaporate, which would mean losing enormous financial and geopolitical power. Or he could default on his promise to redeem the dollar for gold.

On Sunday evening, August 15, 1971, President Nixon interrupted scheduled television programs and made a surprise announcement to the nation and the world.

Nixon said he was temporarily suspending convertibility of the dollar into gold.

The most obvious lie was Nixon’s assertion that the suspension would only be “temporary.” It is still in place today.

Another blatant lie was that his decision was necessary to protect Americans from international speculators. Instead, printing money to fund runaway government spending was the real problem.

Finally, Nixon said removing the link to gold would stabilize the dollar. However, even according to the government’s rigged inflation statistics, which underestimate reality, the US dollar has lost more than 86% of its purchasing power since 1971.

The truth is that Nixon failed in his obligation to redeem the dollar for gold at $35 an ounce. Since then, the dollar has been a pure fiat currency without any backing.

The Oxford English Dictionary defines fiat currency as “inconvertible paper money made legal tender by government decree”.

August 15, 1971 marked the official start of the fiat era. The world adopted a fiat currency standard for the first time in human history.

This gave the US government unfathomable power.

Having the U.S. dollar as the world’s primary reserve currency – with no gold backing – allowed Washington to print fake money out of thin air and export it to the rest of the world for real goods and services – a privileged racketeering that no other country has.

Without gold to contain it, the Fed could print as many dollars as it wanted. And that’s exactly what happened.

The following chart shows the explosion of the US money supply since the dawn of the fiat age in 1971.

1971 was a huge change in money and finance.

Indeed, prior to the adoption of a fiat currency standard, gold was mankind’s most durable form of currency – for over 2,500 years – due to unique characteristics that make it suitable for storing and exchange value.

Gold is durable, divisible, consistent, practical, rare and, above all, the “hardest” of all physical commodities.

In other words, gold is the physical commodity that is “the most difficult to produce” (compared to existing stocks) and, therefore, the most resistant to inflation.

Gold is indestructible and its stores have accumulated over thousands of years. This is one of the main reasons why the annual growth of new gold supply, typically 1-2% per year, is insignificant.

In other words, no one can arbitrarily inflate the offer. This makes gold an excellent store of value and gives the yellow metal its superior monetary properties.

People from all over the world value gold. Its value does not depend on any government or counterparty. Gold has always been an inherently international and politically neutral asset. This is why different civilizations around the world have used gold as currency for millennia.

Yet most people don’t understand this.

They might say that the paper dollars in their wallets and the digital dollars in their bank accounts are silver, not gold. But that’s only been the case since 1971, a drop in the ocean in historical terms.

However, everything is about to change, and soon. This is because the fiat system is self-destructing at an alarming rate. After more than 50 years, it has passed the end of its lifespan, like a spoiled milk carton.

The current monetary system is on its way out. Even the central bankers who run the system can see it. So they’re preparing for what’s next by trying to “reset” the system.

I suspect it could all come crashing down soon…and it won’t be pretty for most people.

Editor’s Note: The economic trajectory is troubling. Unfortunately, there is little an individual can do to change the course of these moving trends.

The best you can and should do is stay informed so you can protect yourself in the best way possible, and even take advantage of the situation.

That’s precisely why bestselling author Doug Casey and his colleagues just released an urgent new PDF report that explains what could happen next and what you can do about it.

Click here to download it now.

Comments are closed.