These are grand times to be dollar vigilantes.
The whole premise of being a dollar vigilante is the acknowledgement that the entire global financial system is an artificial and oppressive system that is nearing the end of its road (and purchasing hard assets and internationalizing our assets to protect ourselves).
What then is better than having a multi-billion dollar global banking behemoth, like UBS, say these words:
"The Euro should not exist... Under the current structure and with the current membership, the Euro does not work. Either the current structure will have to change, or the current membership will have to change...Why consider break-up at all? Break-up occurs because the Euro does not work. Member states would be economically better off if they had never joined. European monetary union was generally mis-sold to the population of the Europe."
We couldn't have said it better ourselves! The only point UBS is missing is that not only should the euro not exist, but it soon will not exist... not in any recognizable form anyway. But UBS points out that if the euro were to fail there could be social unrest and civil wars. Therefore, they say, it must continue to exist.
It's like a man falling from a skyscraper saying that when he hits the ground its really going to hurt and he is going to die... so, therefore, he must not hit the ground. Good luck with that one.
Meanwhile, in Switzerland, where UBS is based, the Swiss Government finally couldn't take it anymore and they effectively devalued the Swiss Franc. The Swiss National Bank warned that it would no longer allow one Swiss franc to be worth more than €0.83 - equivalent to SFr1.20 to the euro.
In effect, they are pegging the value of the Swiss franc to the euro. Yes, the euro which as we just discussed, is on the verge of complete collapse. Talk about hitching your wagon...
Isn't living in this fiat currency world fun? We live in a time where democracies are the scourge of the planet and, at the same time, currencies are tied to nothing and completely at the mercy of politicians who constantly devalue their currency in a misguided effort to get an export advantage and to take advantage of the hidden tax of inflation to keep their social programs and wars going until they can get out of office.
Is it any wonder gold is bumping up near $2,000/oz?
After all, where else are people going to go to hide from the coming fiat currency collapse? The euro is on it's death bed. The Swiss National Bank just announced that the Swiss franc will go down with the euro if need be. The US Government is already beyond bankrupt and the Federal Reserve has been Quantitatively Easing the dollar into worthlessness and they are both just hoping the euro goes first so they can blame the whole train wreck on them.
All of these central banks and governments have the same two options. Allow their currencies or governments to collapse. Or, inflate their currencies a little while longer and hope to get out of office soon before the whole thing comes crashing down in a smoking pile.
Politicians always choose the easiest way out. The easiest way out is inflation...
Anyone smell QE3?
If so, at this stage in the game, more inflation will almost certainly lead to hyperinflation and the complete collapse of the fiat currencies and the great majority of the economies of the western world.
And, UBS is correct. These type of things usually lead to massive social unrest and civil wars.
The Dollar Vigilante doesn't have one of those fancy Homeland Security color coded warning systems, but if we did, it'd be set to high alert. Be on the lookout for any suspicious activity by politicians and central bankers and prepare now via ownership of hard assets (gold, silver, real estate - preferably outside of the western world and agriculture/farmland) and internationalize your financial and personal life so you have options as the collapse continues.