August 15, 1971.
It marked one of the most significant events in US history… yet, most people know nothing about it.
On Sunday night on August 15, 1971, President Richard Nixon interrupted the regularly scheduled TV programming to make a surprise announcement to the nation—and the world. He claimed the US government would temporarily suspend the dollar’s convertibility into gold.
When performing a monetary “rug pull,” governments need to take the public by surprise. If the public knew such measures were coming, they would protect themselves, and the government wouldn’t get the results they want.
That’s why governments tend to do these kinds of things when people would least suspect it, like Sunday evening or the beginning of a long weekend.
The bottom line is, Nixon killed the last remnants of the gold standard. He defaulted on the obligation to redeem the dollar for gold at $35 an ounce. Since then, the dollar has been a pure fiat currency with no backing.
The Oxford English Dictionary defines fiat money as “inconvertible paper money made legal tender by a government decree.”
August 15, 1971, was the official start of the age of fiat.
For the first time in human history, the world went on a fiat currency standard.
It allowed the US government to print as many dollars as it wants. And—without the discipline of the gold standard to hold it in check—it does precisely that.
The following chart shows the explosion in the US money supply since the dawn of the fiat age.
1971 was an enormous change in money and finance.
Before 1971, gold had been mankind’s most enduring form of money—for over 2,500 years.
That’s because gold has a set of unique characteristics that make it suitable as money. It’s durable, divisible, consistent, convenient, scarce, and most important, it’s the one commodity that is most resistant to inflation.
People in every country of the world value gold. Its worth doesn’t depend on any government or any counterparty at all. So it has always been a politically neutral asset.
For these reasons, different civilizations around the world have used gold as money for millennia.
Yet, most people don’t understand this.
They might say the paper dollars in their wallets and the digital dollars in their bank accounts are money because that’s what the government, academia, and the mainstream media tell them. But that’s only been the case since 1971, a drop in the bucket by historical terms.
However, that’s all about to change—and soon.
That’s because the fiat system is self-destructing at an alarming rate. After more than 50 years, it is reaching the end of its shelf-life.
We can trace the fiat era’s accelerating downfall to the wake of the 2008 financial crisis.
That’s when Former Fed chair Bernanke promised Congress that his extreme money-printing programs—which the media euphemistically called QE—were supposed to be temporary emergency measures.
Bernanke insisted QE did not amount to the central bank financing the government’s budget with money printing because the Fed would eventually normalize its policies.
The exact opposite turned out to be true.
QE turned out to not be a “temporary” or “emergency” measure but a permanent policy—much like Nixon’s “temporary” suspension of the gold standard.
Today, the federal government couldn’t even dream of financing its multi-trillion-dollar budget deficits without the Fed’s printing presses.
Here’s the ugly truth the government, the mainstream media, and academia don’t want you to know…
The Fed and other central banks only exist to steal money from you through inflation and redirect it to the politically connected. That is their primary purpose… and it always has been.
In short, you can forever forget about the Fed “normalizing” monetary policy, just like you can forever forget about the US government reinstating convertibility to gold at $35/ounce.
We, therefore, have permanent QE to finance growing multitrillion-dollar deficits… which is Modern Monetary Theory (MMT).
MMT is the same economic quackery that’s brought misery to Argentina, Venezuela, Zimbabwe, and countless other places.
Contrary to its name, MMT is neither new nor “modern.” Instead, it’s an old economic poison in a shiny new bottle. And adding the word “theory” to something doesn’t make it scientific or credible.
Instead, let’s be clear and specific with our words and call MMT what it really is—the Classic Counterfeiting Swindle.
Not only is this crackpot policy already adopted in the US, but it’s about to go into hyperbolic in the months ahead.
It all happened faster than anyone could have imagined. There was no debate or discussion, and voters didn’t get to weigh in. Instead, the government just implemented MMT.
Here’s how hedge fund legend Paul Tudor Jones describes it:
“The depth and magnitude of the economic drop-off took Modern Monetary Theory – or the direct monetization of massive fiscal spending – from the theoretical to practice without any debate. It has happened globally with such speed that even a market veteran, like myself, was left speechless.”
Here’s the bottom line.
With the adoption of MMT, it’s unlikely the Fed will be able to maintain the farce of “independence” for much longer—notwithstanding any token moves to tighten.
As central banks discredit themselves—and their fiat currency—beyond repair by embracing MMT, it’s going to usher in a new monetary era.
The Great Monetary Reset
The current monetary system is on its way out. Even the central bankers themselves can see that… and they are preparing for what comes next.
Central bankers would prefer to double down on the fiat system. That includes introducing central bank digital currencies (CBDCs) and the International Monetary Fund’s Special Drawing Rights (SDR) as the world’s new reserve asset.
Let’s take a look at CBDCs first.
Despite all the hype, CBDCs are nothing but the same fiat currency scam with a new label on it—and zero privacy. They will make it even easier for the government to inflate the currency, and that’s precisely what I would expect them to do if they impose CBDCs on us.
The bottom line with CBDCs is this. They aren’t going to save the failing fiat system.
If paper fiat currency is not viable as money, CBDCs are even less viable as they enable the government to engage in even more currency debasement.
Would a CBDC have saved the Zimbabwe dollar, the Venezuelan bolivar, the Argentine peso, or the Lebanese lira?
I don’t think so. And a CBDC won’t save the US dollar or the euro either.
But that doesn’t mean governments won’t try to implement CBDCs out of desperation… with immensely destructive consequences for many people.
Then there’s the IMF, the quintessential globalist institution that acts as a global central bank. Faceless and unaccountable bureaucrats at the IMF create the SDR out of thin air.
The SDR is simply a basket of other leading fiat currencies. The US dollar currently makes up 42%, the euro 31%, the Chinese yuan 11%, the Japanese yen 8%, and the British pound 8%.
In other words, the SDR is a fiat currency based on other fiat currencies.
The SDR is not based on sound economics or the common man’s interests. It’s just another ridiculous invention of the economic witch doctors at the levers of global power.
I don’t think these gimmicks—the SDR and CBDCs—are workable. On the contrary, they have even worse flaws than the current failing fiat system. Nonetheless, central bankers are pushing hard for them.
The old system is on its way out.
That leaves us with two possibilities.
- The central bankers pull of their CBDC and SDR scam. That’s what the Great Monetary Reset is all about.
- The world goes toward a monetary system based on free-market alternatives, such as gold.
It remains to be seen whether central bankers will breathe additional life into the fiat system. I hope they won’t. Nevertheless, it will be one of the most important stories of the decade, and I’ll be covering it closely in the months ahead.
No matter what happens, I think one thing is sure.
As the Great Monetary Reset unfolds, we are looking at the biggest wealth transfer in history… and those holding US dollars and other fiat currencies will be on the losing end.
All of the value stored in US dollars, euros, and other fiat currencies will be siphoned out and transferred somewhere else…
The key is to position yourself on the receiving end of this wealth transfer. That way, you can not only avoid disaster but set yourself up for enormous gains.
I just released an urgent dispatch that contains all the details on how it could all go down soon… and how you can position yourself properly. Click here to see it now.
