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November 14, 2004

D-Day for Dollar-Dummies
by Alex Wallenwein

The US dollar's days on the sunny beaches are over.

We are witnessing a coordinated, all-out currency-attack by the anti-dollar "Allied Forces" to drive the armies of the "Dollar-Axis" off the monetary equivalent of the beaches of Normandy.

This is a coordinated assault on "Amerika."

I spell "Amerika" with a "k" because what is being assaulted here is not the original America that was built on the political and economic structure of the country our founders have envisioned. Instead, what is being attacked is the twisted farce that well-meaning, but utterly misguided, Americans have allowed their country to become - under the leadership of an almost unbroken string of socialists-in-disguise.

Successive waves of massive amounts of foot soldiers are now being thrown at the fortifications of the current, utterly debased United States monetary regime. The irony is that these "foot soldiers" are not invading enemy troops - but are literally returning GIs ("government-issue" of the US Fed and Treasury's money-printing machines).

The attackers are trying to defeat "Amerika" by sending home Amerika's own monetary soldiers - in numbers its economy cannot possibly accommodate.

Here is what I am talking about:

On November 8, 2004, the Russian news organization ITAR-TASS reported that the Russian central bank has commenced selling US assets as part of its process of "diversifying" its currency reserves. The euro was specifically mentioned as a possible alternative to the US dollar. On the same day, as well as the day before, the British newspaper "Financial Times" reported that not only Russia, but India and China have begun selling their US assets as well.

So, let's see:

Hmmm (thinking aloud): the world's two most populous countries, including the world's most vibrant economy (China) and the world's biggest gold-consumer (India), together with Russia, the world's second largest holder of hold-over Cold War nuclear weapons, are all selling their dollar assets.

The report did not say that these countries are selling "some" of their assets. It stated quite literally that Russia was selling "its" [US] assets. See, Russia Diversifying Currency Reserves - Illarianov

What does all of that mean?

It means, quite literally, that the dollar-dudu has finally hit the fan.

It remains to be seen whether this assault will be rapidly taken to its all-out conclusion, or if some behind-the-scenes agreements have been made since this ITAR_TAAS report whereby the current US administration was forced to make unknown concessions in return for the named countries' agreement to stop (or rather slow) this assault.

If I had to guess, I'd say that continued US support of Taiwan's political independence was probably on that list of concessions. As far as India goes, I suppose US support for Musharraf's Pakistan will possibly wane since Pakistan is a great supporter of Kashmeri so-called independence fighters - a huge thorn in India's eyes. As far as Russia goes, who knows? Maybe Mr. Bush was persuaded not to launch an attack on Iran's nascent nuclear facilities if and when they reveal that they will indeed fabricate nuclear weapons in short order. (I wonder who is selling them that nuclear technology?)

But that's all speculation.

What we do know is that this report was released on Monday. Now, it is very early on Sunday morning, almost a week later. What we have witnessed this week is a continued hovering of the euro just below the "terrible $1.30" level.

The euro continues to hover there even though we have been treated to the same kind of rhetoric we got from the Trichet back in February when the euro threatened to break the $1.30 mark. Back then, the dollar rose significantly within days after the announcement. This time, it stayed put for a whole week. No further falls - but also no bounce-back.

What are we to conclude from this? Can these 'dots' be connected?

The jury is still out on that. What is certain is this: if the dollar drops like a rock from here on out, no agreement was reached. If it stabilizes or experiences a limited bounce-back, followed by continued but slow and gradual declines over time, then we probably have an agreement in place.

If the dollar strongly bounces back from here and continues on upward, we have either left the plane of reality and are operating on hallucinogens, or the US has an ace in the hole somewhere that it strategically managed to play.

What? You are asking me to speculate again??

Alright, alright. I'd guess that all of that gold belonging to foreign nations that's being held at the New York Fed has been brought up somehow. Maybe somewhere along the lines of "Hhmmhmm (that's Mr. Bush clearing his throat), excuse me, Mr. Putin and Mr. Hu, remember all of that gold you got stored on our shores? Weeell, that gold might just change ownership on our books. We already have possession of it, anyway, so uhmm, maybe you shouldn't be so hasty?"

Who knows what these guys are saying to each other behind closed doors or on secure phone lines? It doesn't really matter - because what they do ultimately doesn't matter.

Why not?

Because anything they could possibly hash out together will without a doubt have one common thread running right through it: It will sell you and me down the river in one form or another.

The only real solution is what you and I will do from here on out. If we continue to earn, spend, and save their currencies, they've quite literally got us by the balls.

But if we come to our senses and start implementing and using a private, non-state-sponsored parallel bullion currency, one that can be traded internationally as well as domestically without any exchange risk whatsoever, one that can never be debauched or inflated by government officials of whatever pretended persuasion, then you and I stand a chance. Then, the real America stands a chance!

(By the way, the real America is not some piece of real-estate on the northern part of the American continent. The real America is located in the minds and hearts of all freedom-loving crazy individualists the world over. Whether this piece of real estate called "the United States" can be saved is also up to us, though - not up to the politicians).

Such a currency is the only thing that can insulate individuals and privately run businesses from the follies and the power-lust of our elected, and sometimes un-elected, leaders (or those who got elected only because there was no real alternative available.)

I have written about this issue before, in Why the Gold Standard is HISTORY. There was some interest, but the discussion never really got going. But now, the playing-around time is over!

The landing boats have been launched. The returning dollar-troops are on their way back to these shores. The country isn't ready for them - can never be ready for them. It's roosting time, and the chickens are on their way home!

To get the discussion going for real, I have created a web page reserved for that purpose. The URL is http://www.a1-guide-to-gold-investments.com/gold-currency.html. You can also find it on Google when you type in "gold currency". It's among the first five search results on that keyword.

I invite anyone who wants to contribute to this topic to frame a well-written argument and send it in. If it's quality stuff, I will post it, uncut and unedited.

If you know of an article on this topic that's already been posted online, send me the link. I will try to get permission from the author to post it.

This is a chance for the gold community to graduate from "talking a lot" to actually doing something. Once the concept is worked out, I have the name of at least one well-heeled private investors who is willing to contribute by funding the necessary infrastructure.

This is no longer a "matter of opinion." It's a matter of self-defense now - it's a matter of do-or-die.

If our esteemed government should opt to try and suppress the movement, there are plenty of individuals in other countries who will be glad to pick up the loose ends and tie them up - outside the jurisdiction of the most gold-adverse government that has ever existed in the free world.

Below is a list of the ideas that I support. They aren't my ideas. I just support them because they make sense. This new currency should be:

1. Non-state sponsored, i.e., private.

2. Non-state produced and circulated.

3. Not money-unit-denominated, but denominated in weight only (i.e., one ounce, ten grams, or whatever, in gold or silver, maybe even copper.)

4. No paper-claims should be made out against it and traded in its stead. Transactional convenience is established by already existing online currencies which can interface with it without any friction whatsoever. (That means you don't have to carry a huge sack of coins to go shopping.)

5. The currency must be produced by private, non-state-operated or controlled mints at minimal cost, but with a sufficient cost to make its production economical. Private mints can freely compete against each other for the enormous amount of business that will be generated by eventual world-wide demand. The more the merrier.

A viable distribution mechanism is already in place. It only requires slight alteration. All the technological prerequisites for making this currency functional exist. The only thing lacking at this point is demand - but demand will grow as the dollar-system inevitably crumbles. The euro, the ruble, the yuan, even the gold-dinar, will have nothing on this new currency.

Nobody will be able to "claim" or monopolize this new currency. No nation, no religion, no political party, no corporation. It will truly be a currency of the people. But there is some decent money to be made on the implementation and infrastructure-side of the equation, and that's how it should be. Those with the vision, the means, the planning, and the willingness to do the hard work should be rewarded - and they will be.

But the reward will not come from a government commission awarding some "medal" or a stupid certificate. The reward will not be the erection of an ugly statue somewhere in a public place. The recipient of this reward will not be guaranteed a secure future through the "good-old-boy" network - but he will be rewarded by pure, unadulterated profit from the venture - earned the old-fashioned way: the hard way.

If you think this is a worthwhile endeavor, please join us by visiting and book-marking this page: http://www.a1-guide-to-gold-investments.com/gold-currency.html. (You can also find it on Google when you type "gold currency" into the search window. It's among the first five search results on that keyword.)

You can contribute your ideas. You can offer logistical support - or you can just "hang out" and watch what happens by reading the growing number of enlightening and well-thought-out contributions of the various thinkers who will be involved.

In either case, you win - and the world might just be a more tolerable place for it. Who knows? The Internet must be good for something?

Alex Wallenwein
Editor, Publisher
The Euro vs Dollar Monitor

Just like driving your car, investing only makes sense if you can see where you are going. The Euro vs Dollar Monitor is your golden windshield wiper that removes the media's greasy film of financial misinformation from your investment outlook. Don't drive your investment vehicle without it!

Copyright © 2003-2008 Alex Wallenwein

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