Right now, we are exiting the eye of the giant financial hurricane that we entered in 2007, and going into its trailing edge. It’s going to be much more severe, different, and longer lasting than what we saw in 2008 and 2009.
In a desperate attempt to stave off a day of financial reckoning during the 2008 financial crisis, global central banks began printing trillions of new currency units. The printing continues to this day – and it’s not just the Federal Reserve that’s printing – the Fed is just the leader of the pack. The U.S., Japan, Europe, China – all major central banks – are participating in the biggest increase in global monetary units in history.
- These reckless policies have produced not just billions but trillions in mal-investment that will inevitably be liquidated.
- This will lead us to an economic disaster that will, in many ways, dwarf the Great Depression of 1929–1946.
- Paper currencies will fall apart, as they have many times throughout history. This isn’t some vague prediction about the future. It’s happening right now.
- The Canadian dollar has lost 25% of its value since 2013.
- The Australian dollar has lost 30% of its value during the same time.
- The Japanese yen and the euro have crashed in value and
- the U.S. dollar is currently just the healthiest horse on its way to the glue factory.
These are gigantic losses for major currencies. After all, we’re not talking about small volatile stocks. We’re talking about the value of money in peoples’ bank accounts. These moves show we’re in the early stages of a currency crisis.
At this point, it’s a lock cinch that the world’s premier paper currency – the U.S. dollar – will lose nearly all its value. I just don’t see any realistic way around it. Since the financial crisis began nine years ago, the U.S. government has
- created 3.5 trillion new dollars..[and]
- borrowed $9 trillion – as much as it has borrowed in the previous 232-year history of the United States.
Though politicians would like us to believe otherwise, actions have consequences. You simply cannot quadruple the money supply and double the national debt in eight years without catastrophic results.
As this unfolds, your biggest risk isn’t [going to be] the crashing stock market or the crashing bond market. Your biggest problem, and also the one most people just won’t see, is political. Your government is by far the most serious threat to your money and wellbeing.
Why do I say that? Like any organism, the prime directive of a government is to survive. When faced with a threat to its survival, a broke government will do anything it can to stay alive. President Roosevelt confiscated Americans’ gold in 1933 and, in just the last few years, we’ve seen broke governments raid private pensions and confiscate cash directly from people’s bank accounts.
As we head into a currency crisis for the record books, I think currency controls are a lock…A country debases its currency, raises taxes beyond a certain level, and makes regulations too onerous. Naturally, productive people react by getting their capital, and then themselves, out of Dodge but the government can’t have that, so it puts on currency controls that prevent people from moving assets outside the country. In effect, currency controls force people to stay with a sinking ship.
I’ll be genuinely surprised if some form of currency controls isn’t instituted within year or two. If you don’t get significant assets out of your home country now, you may soon find it costly and very difficult to do so.
I’ve written many times about the importance of internationalizing your assets, your mode of living, and your way of thinking. I suspect most readers have treated those articles as a travelogue to some distant and exotic land: interesting fodder for cocktail party chatter but basically academic and of little immediate personal relevance. I hope…[my] book Casey Research’s Handbook for Surviving the Coming Financial Crisis will shake you out of that mindset…
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