Gold Standard – American Conservative Movement https://americanconservativemovement.com American exceptionalism isn't dead. It just needs to be embraced. Mon, 08 Apr 2024 19:04:09 +0000 en-US hourly 1 https://wordpress.org/?v=6.6.2 https://americanconservativemovement.com/wp-content/uploads/2022/06/cropped-America-First-Favicon-32x32.png Gold Standard – American Conservative Movement https://americanconservativemovement.com 32 32 135597105 Could Fractional-Reserve Banking Work With a Gold Standard? https://americanconservativemovement.com/could-fractional-reserve-banking-work-with-a-gold-standard/ https://americanconservativemovement.com/could-fractional-reserve-banking-work-with-a-gold-standard/#respond Mon, 08 Apr 2024 19:04:09 +0000 https://americanconservativemovement.com/?p=202558 (FEE)—I have a question from Kyle P. for Ask an Economist this week. He wants to know how banking would work under a commodity standard, and he is also interested in what sort of commodities work best as a basis for a currency. He says:

Can you explain how commodity-backed currencies, like the gold standard, work with regards to saving and lending? As I understand it, with fiat money, if A deposits $1,000 in the bank, which then lends $800 to B, there’s now $1,800, but with a gold standard there’s still only $1,000. Would A only have access to $200 + whatever B has repaid? Where would the extra money for interest paid by B to the bank and by the bank to A come from? If B skips town, is A out $800?

Also, can you explain what would make a good commodity to back a currency? Would a plutonium standard, a distilled water standard, or prime rib standard work as well as a gold standard or silver standard?

To tackle the first question, we need to highlight the differences between a currency system and a banking system. Let’s start there.

Commodity vs. Fiat Money

So does commodity money, like a gold-standard, conflict with how banks operate today? Not really. To understand why, we need to get to the fundamental difference between commodity money and fiat money—redeemability.

A commodity money is redeemable for some quantity of a physical commodity. For example, we can imagine a paper currency which could be redeemed for one ounce of silver, gold, plutonium, or prime rib. If you can, in principle, take the note to a bank or government office (depending upon the specifics of the system) and have it redeemed for gold, the currency is a gold-backed currency.

Fiat currency, on the other hand, is only redeemable in itself. In other words, if you take your currency to a bank or government office in a fiat system to redeem it, they are going to hand you back different fiat currency. If you redeem your five dollar bill, the only thing you’re promised is five slightly different colored bills with Washington’s face rather than Lincoln’s.

This is the difference between fiat and commodity systems.

So, is a commodity-based monetary system compatible with banking as we know it today? Sure. Let’s run through an example to see why.

Let’s say you deposit $1,000 worth of gold at a bank. In exchange you receive $1,000 of redeemable gold-backed notes, which you can use to purchase products. If the notes are transferred, the person who receives them can redeem them for their portion of the gold. The bank has the gold it would be required to give for redemption.

In some historical government money systems, the government offers the right to gold redemption rather than the private bank, but there’s no reason we couldn’t imagine banks or private gold redemption businesses taking this on. For our purposes, we’ll just assume that the banks store gold for redemption and allow customers to save their notes. This system is maybe overly simple compared to reality, but it makes our example a bit easier.

You decide that instead of spending your gold notes, you’d prefer to save them, and you deposit the notes in the bank as well.

Someone comes along and borrows notes from the bank. The bank gives the borrower $800 worth of gold-backed currency from the $1,000 you deposited in the bank. So now, your bank account balance is $1,000 (recorded on the bank’s ledger), and the borrower has $800 in physical cash. This sort of banking system where the bank only keeps a fraction of the money deposited and lends out the rest is known as fractional reserve banking.

At this point, you may have noticed the problem that Kyle noticed. The bank essentially created new money when it loaned your money out to someone else. There is now $1,800 worth of promises to redeem currency in gold out there, but the amount of gold hasn’t changed. There’s still only $1,000 worth of gold. So is this an issue?

Well, it’s only an issue for the bank if everyone decides to redeem their currency for gold at the exact same time. In that case, the bank would be unable to meet its obligations, and it would go under unless something changed.

You might take this possibility as evidence that commodity-backed money is incompatible with fractional reserve banking. There’s two reasons why this isn’t necessarily the case.

First of all, this potential problem is not unique to commodity money. If banks hold fractional reserves in a fiat money system the same issue still applies. If every depositor runs to the bank and demands their fiat money, a bank will be unable to fulfill that obligation if they only kept a fraction of the fiat and lent out the rest.

In other words, this risk associated with fractional reserve banking is not specific to a commodity or fiat system. The risk of too many customers trying to secure funds exists in both systems. The type of money (commodity or fiat) is a separate question from the type of banking system (fractional or full reserves).

Second of all, as long as the bank keeps enough gold on hand to meet the actual redemption requests, then there is no issue for the bank. It’s possible in theory for a bank to not hold enough gold, just like it’s possible for all businesses to fail to meet their obligations if things go sufficiently wrong, but there is incentive to avoid this result.

To answer some specifics, Kyle’s original inquiry included several questions based on a hypothetical scenario. Let’s consider each.

“…if A deposits $1,000 in the bank, which then lends $800 to B, there’s now $1,800, but with a gold standard there’s still only $1,000.”

In both a gold and fiat standard, the depositor has an account balance that reflects the bank’s obligation to give them $1000. In both standards, the borrower has notes worth $800. If the depositor requested all their currency notes back, the bank would be unable to issue them unless the bank had deposits from other customers, because $800 of A’s deposits is in the hands of B. This is an issue, but it isn’t an issue unique to the commodity system.

“Would A only have access to $200 + whatever B has repaid?”

How much money A has access to depends on the situation. Does the bank have other customers with partial deposits? If not, the bank might have a problem if A wants more than $200. Again, this is true in both the fiat and gold-backed system.

“Where would the extra money for interest paid by B to the bank and by the bank to A come from?”

The interest money paid by B would come from the wealth created by B in the process of paying back the loan. For example, if B started a business and the business sold a product to a customer in exchange for the customer’s gold-backed currency, that’s the money B would use.

“If B skips town, is A out $800?”

Again, that depends on the particulars. A bank could buy deposit insurance or sell bank assets if it wanted to eat the cost of the failed loan (assuming there is no way to cancel those redeemable notes). We could also imagine a bank that tells customers they’re on the hook if borrowers skip town, though I have a tough time imagining many customers would be interested in that arrangement.

You might be tempted to think the theft of the redeemable notes doesn’t hurt the bank because the bank didn’t lose any of the $1,000 in gold. The problem is, when B skips town and spends the notes, the person who accepted the notes has the option of redeeming them. In other words, when the notes are stolen the gold is as good as gone too (again barring some fancy note-canceling technology).

What Makes for Good Commodity Money?

So now we know the difference between commodity money and fiat money. Commodity money should be redeemable for something. But can it be redeemable for anything? We could imagine the commodity that backs a money being anything at all, but in reality certain features of commodities make them better or worse for money.

The economist Carl Menger (1840-1921) provides one of the seminal accounts on how money developed. Menger highlights how the system of barter suffers from several shortfalls including the very important double coincidence of wants (which you can read about here).

As a result of this and other issues, people in barter economies will tend to discover goods which are universally accepted. These universally accepted goods then evolve into being a medium of exchange for most transactions.

So what sorts of qualities do these medium-of-exchange goods have? I don’t claim that this is an exhaustive list, but these goods tend to be: universally enjoyed, portable, durable, divisible, fungible, and recognizable. There’s one final quality that’s hard to put into a single word. Sometimes people say “scarcity”, but I think this is a bad label because it confuses some concepts. I think there are two concepts that this gets at. First, the supply of the good should not be able to grow too quickly. Second, the good should have a high value per unit of weight/space (value density).

Let’s think of some examples to see why some commodities succeed while others fall short. Let’s take copper, for example. Copper has all the first six qualities listed above, however, copper is pretty heavy relative to its value. Copper hovers for around $4 per pound. That means if you wanted to buy a $400,000 house in a copper standard, you’re going to have to somehow transfer ownership of 100,000 pounds of copper. That’s not exactly impossible, but that doesn’t make it ideal. Not only that, the copper supply is so large it lends itself to rapid supply expansion. You’d probably need a rarer and more valuable metal to pair with copper for a working system.

Kyle mentioned a standard with a pretty similar problem to copper—a distilled water standard. Water is similar to copper in a lot of ways as it relates to our qualities. It’s universally enjoyed, portable, durable, divisible, homogeneous, and recognizable. Technically proving it’s distilled maybe makes it a little less recognizable or homogeneous, but the main problem with water (like copper) is it’s pretty cheap per pound (between $1-$4 in stores near me).

The prime rib standard is an interesting proposal because it helps us see some problems. The glaring issue is that prime rib is not very durable. Banks would have to have a lot of freezer space to support that commodity standard.

Admittedly, the list of qualities is not a perfect predictor of what flies as money. We can find historical exceptions to the qualities on the list. But it seems consistent that high-value metals like gold and silver rise to the top on average.

Ask an Economist! Do you have a question about economics? If you’ve ever been confused about economics or economic policy, from inflation to economic growth and everything in between, please send a question to professor Peter Jacobsen at [email protected]. Dr. Jacobsen will read through questions and yours may be selected to be answered in an article or even a FEE video.

Additional Reading:

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Lew Rockwell: Bring Back Gold! https://americanconservativemovement.com/lew-rockwell-bring-back-gold/ https://americanconservativemovement.com/lew-rockwell-bring-back-gold/#respond Mon, 01 Apr 2024 09:22:20 +0000 https://americanconservativemovement.com/?p=202360 (Lew Rockwell)—In these days of rampant inflation, it’s imperative that we return to the gold standard—and the real thing too. By this I mean the classical gold standard, not the so-called “gold exchange” standard, and with no fractional reserve banking, just as the great Murray Rothbard wanted. In what follows, I’ll discuss some of the economic issues below, but it’s important to realize that it’s a moral issue as well.

I spoke about the difference between the classical gold standard and the fake gold standard. This might seem a technical issue, but it’s one of vital importance. Joe Salerno, the leading contemporary Austrian School authority on monetary economics and Academic Vice President of the Mises Institute, explains:

“The historical embodiment of monetary freedom is the gold standard. The era of its greatest flourishing was not coincidentally the 19th century, the century in which classical liberal ideology reigned, a century of unprecedented material progress and peaceful relations between nations. Unfortunately, the monetary freedom represented by the gold standard, along with many other freedoms of the classical liberal era, was brought to a calamitous end by World War I.

Also, and not so coincidentally, this was the “War to Make the World Safe for Mass Democracy,” a political system which we have all learned by now is the great enemy of freedom in all its social and economic manifestations.

Now, it is true that the gold standard did not disappear overnight, but limped along in weakened form into the early 1930s. But this was not the pre-1914 classical gold standard, in which the actions of private citizens operating on free markets ultimately controlled the supply and value of money and governments had very little influence.

Under this monetary system, if people in one nation demanded more money to carry out more transactions or because they were more uncertain of the future, they would export more goods and financial assets to the rest of the world, while importing less. As a result, additional gold would flow in through a surplus in the balance of payments increasing the nation’s money supply.

Sometimes, private banks tried to inflate the money supply by issuing additional bank notes and deposits, called “fiduciary media,” promising to pay gold but unbacked by gold reserves. They lent these notes and deposits to either businesses or the government. However, as soon as the borrowers spent these additional fractional-reserve notes and deposits, domestic incomes and prices would begin to rise.

As a result, foreigners would reduce their purchases of the nation’s exports, and domestic residents would increase their spending on the relatively cheap foreign imports. Gold would flow out of the coffers of the nation’s banks to finance the resulting trade deficit, as the excess paper notes and checks were returned to their issuers for redemption in gold.

To check this outflow of gold reserves, which made their depositors very nervous, the banks would contract the supply of fiduciary media bringing about a monetary deflation and an ensuing depression.

Temporarily chastened by the experience, banks would refrain from again expanding credit for a while. If the Treasury tried to issue convertible notes only partially backed by gold, as it occasionally did, it too would face these consequences and be forced to restrain its note issue within narrow bounds.

Thus, governments and commercial banks under the gold standard did not have much influence over the money supply in the long run. The only sizable inflations that occurred during the 19th century did so during wartime when almost all belligerent nations would “go off the gold standard.” They did so in order to conceal the staggering costs of war from their citizens by printing money rather than raising taxes to pay for it.

For example, Great Britain experienced a substantial inflation at the beginning of the 19th century during the period of the Napoleonic Wars, when it had suspended the convertibility of the British pound into gold. Likewise, the United States and the Confederate States of America both suffered a devastating hyperinflation during the War for Southern Independence, because both sides issued inconvertible Treasury notes to finance budget deficits. It is because politicians and their privileged banks were unable to tamper with and inflate a gold money that prices in the United States and in Great Britain at the close of the 19th century were roughly the same as they were at the beginning of the century.

Within weeks of the outbreak of World War I, all belligerent nations departed from the gold standard. Needless to say by the war’s end the paper fiat currencies of all these nations were in the throes of inflations of varying degrees of severity, with the German hyperinflation that culminated in 1923 being the worst. To put their currencies back in order and to restore the public’s confidence in them, one country after another reinstituted the gold standard during the 1920s.

Unfortunately, the new gold standard of the 1920s was fundamentally different from the classical gold standard. For one thing, under this latter version, gold coin was not used in daily transactions. In Great Britain, for example, the Bank of England would only redeem pounds in large and expensive bars of gold bullion. But gold bullion was mainly useful for financing international trade transactions.

Other countries such as Germany and the smaller countries of Central and Eastern Europe used gold-convertible foreign currencies such as the US dollar or the pound sterling as reserves for their own domestic currencies. This was called the gold-exchange standard.

While the US dollar was technically redeemable in honest-to-goodness gold coin, banks no longer held reserves in gold coin but in Federal Reserve notes. All gold reserves were centralized, by law, in the hands of the Fed and banks were encouraged to use Fed notes to cash checks and pay for checking and savings deposit withdrawals. This meant that very little gold coin circulated among the public in the 1920s, and residents of all nations came increasingly to view the paper IOUs of their central banks as the ultimate embodiment of the dollar, franc, pound, etc.

This state of affairs gave governments and their central banks much greater leeway for manipulating their national money supplies. The Bank of England, for example, could expand the amount of paper claims to gold pounds through the banking system without fearing a run on its gold reserves for two reasons.

Foreign countries on the gold exchange standard would be willing to pile up the paper pounds that flowed out of Great Britain through its balance of payments deficit and not demand immediate conversion into gold. In fact by issuing their own currency to tourists and exporters in exchange for the increasing quantities of inflated paper pounds, foreign central banks were in effect inflating their own money supplies in lock-step with the Bank of England. This drove up prices in their own countries to the inflated level attained by British prices and put an end to the British deficits.

In effect, this system enabled countries such as Great Britain and the United States to export monetary inflation abroad and to run “a deficit without tears” — that is, a balance-of-payments deficit that does not involve a loss of gold.

But even if gold reserves were to drain out of the vaults of the Bank of England or the Fed to foreign nations, British and US citizens would be disinclined, either by law or by custom, to put further pressure on their respective central banks to stop inflating by threatening bank runs to rid themselves of their depreciating notes and retrieve their rightful property left with the banks for safekeeping.

Unfortunately, contemporary economists and economic historians do not grasp the fundamental difference between the hard-money classical gold standard of the 19th century and the inflationary phony gold standard of the 1920s.” See here.

Many people think that even if 100% reserve banking is desirable as an ideal, it would never work in practice. How could banks stay in business if they couldn’t lend their checking deposits? Doesn’t the supply of money need to expand as the economy grows? Murray Rothbard demolishes these objections with characteristic force:

“Certain standard objections have been raised against 100 percent banking and against 100 percent gold currency in particular. One generally accepted argument against any form of 100 percent banking I find particularly and strikingly curious: that under 100 percent reserves, banks would not be able to continue profitably in business. I see no reason why banks should not be able to charge their customers for their services, as do all other useful businesses. This argument points to the supposedly enormous benefits of banking; if these benefits were really so powerful, then surely the consumers would be willing to pay a service charge for them, just as they pay for traveler’s checks now. If they were not willing to pay the costs of the banking business as they pay the costs of all other industries useful to them, then that would demonstrate the advantages of banking to have been highly overrated. At any rate, there is no reason why banking should not take its chance in the free market with every other industry.

The major objection against 100 percent gold is that this would allegedly leave the economy with an inadequate money supply. Some economists advocate a secular increase of the supply of money in accordance with some criterion: population growth, growth of volume of trade, and the like; others wish the money supply to be adjusted to provide a stable and fixed price level. In both cases, of course, the adjusting and manipulating could only be done by government. These economists have not fully absorbed the great monetary lesson of classical economics: that the supply of money essentially does not matter. Money performs its function by being a medium of exchange; any change in its supply, therefore, will simply adjust itself in the purchasing power of the money unit, that is, in the amount of other goods that money will be able to buy. An increase in the supply of money means merely that more units of money are doing the social work of exchange and therefore that the purchasing power of each unit will decline. Because of this adjustment, money, in contrast to all other useful commodities employed in production or consumption, does not confer a social benefit when its supply increases. The only reason that increased gold mining is useful, in fact, is that the large supply of gold will satisfy more of the non–monetary uses of the gold commodity.

There is therefore never any need for a larger supply of money (aside from the non-monetary uses of gold or silver). An increased supply of money can only benefit one set of people at the expense of another set, and, as we have seen, that is precisely what happens when government or the banks inflate the money supply. And that is precisely what my proposed reform is designed to eliminate. There can, incidentally, never be an actual monetary “shortage,” since the very fact that the market has established and continues to use gold or silver as a monetary commodity shows that enough of it exists to be useful as a medium of exchange.

The number of people, the volume of trade, and all other alleged criteria are therefore merely arbitrary and irrelevant with respect to the supply of money. And as for the ideal of the stable price level, apart from the grave flaws of deciding on a proper index, there are two points that are generally overlooked. In the first place, the very ideal of a stable price level is open to challenge. Hoarding, as we have indicated, is always attacked; and yet it is the freely expressed and desired action on the market. People often wish to increase the real value of their cash balances, or to raise the purchasing power of each dollar. There are many reasons why they might wish to do so. Why should they not have this right, as they have other rights on the free market? And yet only by their “hoarding” taking effect through lower prices can they bring about this result. Only by demanding more cash balances and thus lowering prices can the dollars assume a higher real value. I see no reason why government manipulators should be able to deprive the consuming public of this right.

Second, if people really had an overwhelming desire for a stable price level, they would negotiate all their contracts in some agreed-upon price index. The fact that such a voluntary “tabular standard” has rarely been adopted is an apt enough commentary on those stable-price-level enthusiasts who would impose their ambitions by government coercion.

Money, it is often said, should function as a yardstick, and therefore its value should be stabilized and fixed. Not its value, however, but its weight should be eternally fixed, as are all other weights. Its value, like all other values, should be left to the judgment, estimation and ultimate decision of every individual consumer.” See here.

If we want a true gold standard, can we get back to it? Of course we can. The inflationary monetary policy we have today is the key to the financial elites control over us. Without it brain-dead Biden and his gang of neocon controllers couldn’t function. We must prevail, and we can prevail. As I said in 2002,

“The power to create money is the most ominous power ever bestowed on any human being. This power is rightly criminalized when it is exercised by private individuals, and even today, everyone knows why counterfeiting is wrong and knavish. Far fewer are aware of the role of the federal government, the Fed, and the fiat dollar in making possible the largest counterfeiting operation in human history, which is called the world dollar standard. Fewer still understand the connection between this officially sanctioned criminality and the business cycle, the rise and collapse of the stock market, and the continued erosion of the value of the dollar.

In fact, I would venture to guess that a sizeable percentage of even educated adults would be astounded to discover that the Federal Reserve does more than manage the nation’s money accounts, that, in fact, its main activity consists in actually creating money that distorts production and creates inflation and the business cycle. In fact, I would go further to suggest that many educated adults believe that gold continues to serve as the ultimate backing of our monetary system, and would be astonished to discover that our money is backed by nothing but more of itself.

We have our work cut out for us, to be sure, mainly at the educational level. We must continue to state the obvious at every opportunity, that the fiat system is exactly what it is, a system of paper money backed by nothing of real value. We must continue to point out that because of this, our economic system is not depression proof, but rather highly vulnerable to complete meltdown. We must continue to draw attention to the only long-term solution: a complete separation of money and state based on the commodity that the market has always chosen as money, namely, gold.

This takes us back to our original question: is the gold standard history? Is it so preposterously unrealistic to advocate it that we might as well move to on other things? It won’t surprise you that my answer is no. If there is one thing that a long-term view of politics teaches, it is that only the long-term really matters.

There will come a time when the current money and banking system, living off credit created by a fiat money system, will be stretched beyond the limit. When it happens, attitudes will turn on a dime. No advocate of the gold standard looks forward to the crisis nor to the human suffering that will come with it. We do, however, look forward to the reassertion of economic law in the field of money and banking. When it becomes incredibly obvious that something drastic must replace the current system, new attention will be paid to the voices that have long cast aspersions on the current system and called for a restoration of sound money.

Must a crisis lead to monetary reforms that we will like? Not necessarily, and, for that matter, a crisis is not a necessary precursor to radical reform. As Mises himself used to emphasize, political history has no predetermined course. Everything depends on the ideas that people hold about fundamental issues of human freedom and the place of government. Under the right conditions, I have no doubt that a gold standard can be completely restored, no matter how unfavorable the current environment appears towards its restoration.

What is essential for us today is to continue the research, the writing, the advocacy for sound money, for a dollar that is as good as gold, for a monetary system that is separate from the state. It is a beautiful vision indeed, one in which the people and not the government and its connected interest groups maintain control of their money and its safe keeping.

What has been true for hundreds of years remains true today. The clearest path to the restoration of economic health is the free market undergirded by a sound monetary system. The clearest path toward economic destruction is for us to stop working toward what is right and true.” See here.

Let’s do everything we can to end the Fed and restore the real gold standard!

About the Author

Llewellyn H. Rockwell, Jr. [send him mail], former editorial assistant to Ludwig von Mises and congressional chief of staff to Ron Paul, is founder and chairman of the Mises Institute, executor for the estate of Murray N. Rothbard, and editor of LewRockwell.com. He is the author of Against the State and Against the Left. Follow him on Facebook and Twitter.

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Former Treasury Official: If U.S. Dollar Loses Global Reserve Currency Status, There Will Be a Complete Economic IMPLOSION https://americanconservativemovement.com/former-treasury-official-if-u-s-dollar-loses-global-reserve-currency-status-there-will-be-a-complete-economic-implosion/ https://americanconservativemovement.com/former-treasury-official-if-u-s-dollar-loses-global-reserve-currency-status-there-will-be-a-complete-economic-implosion/#comments Sun, 02 Apr 2023 00:12:54 +0000 https://americanconservativemovement.com/?p=191411 The way things are currently headed, the United States dollar, a fiat currency endlessly printed by the private Federal Reserve banking cartel, is eventually going to lose its status as the world reserve currency. Once that happens, it will be game over for the current global economic order.

Former Assistant Secretary for Public Affairs at the U.S. Department of the Treasury Monica Crowley warned this week that the consequences of the U.S. dollar losing its world reserve currency status will be “catastrophic” for the powers that be.

“That would mean the end of the U.S. dollar,” she stated, adding that “there would be a complete implosion of the global economic system” if that happened – and it appears as though it is going to happen in a matter of time.

(Related: According to Russian Federation President Vladimir Putin, the BRICS countries, which include Brazil, Russia, India, China, and South Africa, are all working together right now to produce and unveil a new global reserve currency that is not controlled by corrupt Western powers like the U.S. dollar is.)

After being de-pegged from gold by Nixon, the U.S. dollar has been losing value and trust as the world’s reserve currency

Crowley appeared on Fox News to warn about the emerging economies elsewhere throughout the world that are ditching the dollar and moving towards other currencies such as the Chinese yuan. The U.S. dollar has already lost its status as the world’s dominant currency, she admitted.

“It’s really hard to overstate exactly how catastrophic the abandonment of the U.S. dollar would be as the world’s global reserve currency,” she added.

Ever since the conclusion of World War II, the dollar has been considered a safe haven currency. At the time, it was still backed by gold, but was taken off the gold standard by Republican President Richard Nixon about 50 years ago.

Ever since the time Nixon de-pegged the dollar from gold, the only thing backing the Monopoly money is the perceived “strength and economic power” of the U.S., which has waned dramatically since the time of WWII.

Another worry is that the rest of the world will stop trading oil using dollars, hence why it is referred to as the petrodollar.

“If that were to end,” Crowley said, “that would mean the end of the U.S. dollar.”

To have the U.S. dollar as the world’s reserve currency all this time “has been a real privilege,” Crowley went on to state, adding that “we’ve abused the privilege by wholly reckless monetary and fiscal policy for so many years, certainly over the last couple of years, which has really devalued the dollar.”

“On top of that,” she added, “now you do have this perfect storm of Biden’s weakness, his war on American domestic energy production, the Ukraine war … Because of all of these things, we’ve got America’s enemies, led by China, forming a new economic bloc.”

The only thing that would need to happen at this point to dethrone the United States and its fiat dollars from the pinnacle of global finance is for Saudi Arabia, as one example, to open up the oil trade to other currencies – and the Saudis have already indicated that they are open to doing this.

“If that were to happen, there would be a complete implosion of the global economic system, but certainly the American economic system,” Crowley warned. “And if that were to happen, you’d be looking at sky-high inflation just raging, Weimar Republic kind of inflation. If you think inflation is bad right now, just wait.”

The latest news about the impending failure of Western civilization can be found at Collapse.news.

Sources for this article include:

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