Today, a tectonic shift in the global monetary system seems inevitable. The good news is that we will know exactly when the dollar collapse is imminent. Last time, it was also evident long before the actual closing of the “gold window”. Nixon has ended the Bretton Woods system on August 15, 1971, but the paradigm has shifted in the late sixties.
FATCA itself indicates the cancer stages. The US is deep in the stage where it increases regulations, taxes, and police-state measures. It is entering the next stage — capital controls. However, there is still an opportunity for you to avoid getting coffined in alive by the desperate government. Once official capital controls are implemented, your wealth is trapped. There is no question that you want to be hedged before the day arrives. Your escape plan does not include you leaving your home country — implement bitcoin, physical gold, and international diversification (offshore banking).
Troublesome State of Things
The US has long passed the stage when the fiscal disease was new. By now, the country is clearly in trouble for the entire decade. The government’s stats are phony. There’s a mountain of rules, laws, and regulations to track and control every dollar you earn and spend. Not only in the US, in many prominent countries as well, the people who control the banking system are also the same people who pull the strings in governments.
The cashless system is pictured as a natural one. No wonder. Banks have been delving into negative interest rates for quite a while now. In plain English it means “charging you to keep your money in the bank”. And of course, banks can still loan it out for their profit. You lose money by having it on deposit! Some state governments are proposing the registering and tracking of precious metals transactions.
What seems to be most terrifying to the moment are the daily stories of the out-of-control police behavior.
Next Stages of Crisis
Full-scale capital control is coming next. After that — wealth confiscation measures. The desperate government grabs as much capital as it can get away with. This includes an official currency devaluation, measures against precious metals, and so-called haircuts of wealth held in electronic form like bank and brokerage accounts (already happened in EU countries this decade!).
Next comes the nationalisation of retirement savings. This usually starts as the government’s “help to manage the money”. As terrible as it sounds, next comes the price and wage controls which, of course, cause shortages in food, energy, and other necessities. Next comes the control of people. Desperate governments always put restrictions on the movement of its citizens. This is especially true for citizens who have accumulated wealth. Next comes the war. It is needed to distract the populace. Desperate governments tend to bolster blind nationalism.
The Trigger to Watch for
In 1972 – 1974 the US government coordinated the creation of the petrodollar system with Saudi Arabia. Saudi Arabia was a choice because of the vast oil reserves and the royal family corruption.
In essence, the agreement was that the US guarantees the survival of the Saudi, while Saudi Arabia makes sure all OPEC transactions would be conducted only in US dollars and invests heavily in US Treasury securities. The need to use dollars to transact in oil is essential for the current monetary system. It is the most compelling reason for foreign countries to keep dollars in their reserves.
Of course, this oil-based demand for USD is artificial, since the US is just a middleman in a transaction that has nothing to do with a US product or service. When oil-producing countries start to demand gold, or its equivalent, for their oil rather than dollars or euros, it is all over. Watch the faltering strategic regional position of Saudi Arabia. Watch the rise of Iran. Watch the BRICS countries providing alternative monetary arrangements.
Again, watch the Saudis. They are furious. They suppose the US is not holding up its part of the petrodollar deal. By now, the US should have controlled Syria and attacked Iran. Watch for US officials to start talking on the need to transform the monarchy in Saudi Arabia into a “democracy.”