One of the most groundbreaking research themes we’ve been uncovering is the fact that the Federal Reserve might not even work on behalf of the American people anymore.
I want you to consider, perhaps for the first time in your life, that the dollar isn’t even a U.S. currency anymore.
Go back to 1944, when the “winner” of WW2, the country, which became the manufacturing powerhouse of the world, decided to peg its currency to gold, while agreeing to make it the reserve currency for the international community for trade settlement.
The U.S. has boomed so dramatically in the 20th century mainly becuase of the war in Europe.
The second it took on that role is the moment that it shifted the need for USD credit worldwide. The Federal Reserve, along with the politicians in Washington, put themselves in an impossible situation, where other countries now needed dollars, but to obtain them, the Treasury Department had to issue new bonds, and tax revenue had to be used to buy or mine gold, in return.
You see, to keep the accounting intact, where every $35 equals one ounce of gold, there has to be a monthly or at least an annual purchase of gold bars, or the currency loses purchasing power, by definition.
This is the course of events that happened, where dollars were issued, but no gold was acquired, and by 1965, European countries, especially France, who recovered from the war by that point, were pressuring the U.S. to audit their holdings and release the data in public.
A world reserve currency system, where one country backs their coin by a tangible asset, whereas the rest of them agree to use the dollar, is faulty from the start.
When other countries print too much debt of their own and buy dollars with it, they are also manipulating currency, and they can do it deliberately.
“Currency Wars” between nations, as today’s experts are calling them, have been waging battles since 1944
The wealthy investors buy timberland, farmland, gold, and silver and invest in brand-name corporations, which grow faster than inflation and pass on costs to the consumers, thus they are able to remain extremely profitable through thick and thin.
The average person is going about this process in the wrong way by relying on his salary to compensate for inflation, in contrast with the financially educated.
What I want you to realize in mind, and act upon in reality, is the fact that the USD needs to be managed by the Federal Reserve, not only in a way, which is favorable for domestic interest, but for foreign ones, as well, otherwise the house of cards can topple faster than you think.
This process of satisfying foreign holders of Federal debt has allowed globalization to spring up, as the most dominant financial phenomenon of the 20th century, but now it is hurting the same country, which initiated the process (USA), so Washington is faced with the challenge of dealing with the backfire.
Outsourcing, for many years, has allowed multinational corporations, which employ hundreds of thousands of Americans, and whose shares are held by millions of Americans, via their trading accounts and retirement plans, to prosper.
At the same time, though, they’ve severely damaged low-level and mid-level workers by relocating factories to other countries, without helping the displaced employees to find gainful employment.
The U.S. has compensated for this loss of manufacturing profits by boasting the biggest and most advanced technological capitals we have (Silicon Valley, Seattle and others), by having a major military employer (Armed Forces, Military Industrial Complex), and by growing the size of government, now the world’s largest employer (Defense Ministry has more employees than Walmart).
These are facts, which have had resounding ramifications on a day-to-day sequence, but mostly over the course of the business cycles, the recent generations, or the lifetimes of Baby Boomers and now that of Millennials.
The reason the Federal Reserve and the banking system, in general, have so much power and are so extremely dangerous, therefore, is that they are in charge of credit issuance, which directly impacts the pricing of all goods and services, worldwide.
One wrong move and the Turkish Lira could collapse, ruining the lives of tens of millions of people in a heartbeat. Another policy mistake and the biggest foreclosure epidemic in history can spur out of control in a 30-day period, as we’ve seen in 2008.
The Federal Reserve sets the interest rates environment for the entire planet. That’s an incredibly important mandate, and it is the leading central bank in the world.
We’re going to see it making many more mistakes in the coming years. If it happens on your watch, when you are about to retire and need your equity most, it will be tragic.
Build a diversified portfolio, then; one which keeps you safe from policy mistakes because FED chairmen come and go, but their decisions last well after they’re gone.
Best Regards,
Lior Gantz
President, WealthResearchGroup.com)
