Has Doug Casey convinced the government to bring back the gold standard?
Over the past two weeks, Doug has been working on a special project. He’s spent a lot of time with high-ranking government officials, trying to persuade them to back the currency with gold. Believe it or not, the government is taking Doug’s ideas seriously…
Unfortunately, we’re not talking about the U.S. government. As you may know, America gave up on the gold standard in 1971. Prior to that, folks could exchange their U.S. dollars for a fixed amount of gold. This kept the government honest and prevented it from printing too much money.
Today, U.S. dollars are merely paper, backed by nothing. Or, as Doug says, the dollar is an “I.O.U. nothing.”
• Not a single country uses the gold standard today. But that could soon change…
Last week, Doug went to the African country of Zimbabwe with Nick Giambruno, editor of Crisis Investing. They met with high-ranking government officials and local business leaders to discuss a return to the gold standard.
Less than a decade ago, Zimbabwe had one of the worst currency crises in history. The crisis began like most financial crises do. The government borrowed too much money. Government officials thought they could pay off the debt by printing money. This made the situation much worse.
Inflation reached 624% in 2004, according to some estimates. By 2007, the country had “hyperinflation”, meaning prices rose more than 50% each month.
By November 2008, inflation peaked at 79,600,000,000% a month, according to the Cato Institute. Prices doubled every 24.7 hours. The only time inflation has been higher was in Hungary in 1946.
The government printed 100 trillion dollar notes…the price for a loaf of bread reached 35 million dollars…and “starving billionaires” protested in the streets.
• Zimbabwe’s financial system collapsed…
Stocks stopped trading on the country’s stock exchange. In 2009, the country eliminated the Zimbabwe dollar. It now uses other foreign currencies like the U.S. dollar and South African rand.
Zimbabwe is still in shambles. The economy is barely growing. Unemployment is staggeringly high. Food and water shortages are common.
• Doug says a “gold reserve bank” could help restore confidence in Zimbabwe’s banking system…
The Herald, the country’s main newspaper, reported last week.
Mr. Casey, who is also an investor and international business consultant, said setting up or converting the Reserve Bank of Zimbabwe into a gold bank could be necessary to raise capital.
“If you set up a gold bank in this country, all the people (Zimbabweans) become shareholders and it will be possible to raise maybe as little as a $100 million on the world market and that will capitalize the bank,” said Mr. Casey.
The Herald continues.
“People could deposit their euros and dollars into the gold bank and the bank will buy gold and convert the currency into gold. This is how the gold bank is built. As more and more people deposit their savings into the bank it is transferred and converted into gold and when it grows it can be converted into notes or coins and it will be growing,” he said.
Doug and Nick (pictured on the right) made front page news in Zimbabwe’s The Herald:
• Nick says the idea was “very well received”…
He thinks there’s a good chance the government will implement a gold bank. This would make Zimbabwe the only country in the world with a gold-backed currency.
Unfortunately, that’s all we can say right now. Talks between Doug and Zimbabwe’s government are ongoing. But Doug and Nick will reveal more about their trip in the next issue of Crisis Investing later this month.
Nick will also tell readers how to easily invest in Zimbabwe. He’s found a Zimbabwean precious metals miner with “explosive upside potential.” You can learn more by taking a risk-free trial to Crisis Investing.
• The U.S. government ended the gold standard in 1971…
The gold standard held the government in check. Unlike paper currencies, gold cannot be created out of thin air.
Today, there’s no limit to how much the government can spend. The money supply is almost thirteen times higher today than it was in 1971. As a result, the dollar has lost 85% of its value since 1971.
Plus, the government is $19 trillion in debt and counting. To pay off this debt, every American would need to pitch in $58,403. That’s almost $5,000 more than an average household makes in a year.
• The U.S. is using the same failed policies as Zimbabwe…
The U.S. government created $3.5 trillion out thin air after the 2008 financial crisis to “stimulate’ the economy. But the U.S. economy is growing at its slowest pace since World War II.
Instead of admitting that printing money has failed to stimulate the economy, the government is threatening to “double down.” Recently, Federal Reserve Chair Janet Yellen hinted that she will order the Fed to print more money if the economy slows.
Reckless money printing has destroyed dozens of currencies throughout history. It destroyed Yugoslavia’s currency in the 1990s…Hungary’s in the 1940s…and Germany’s in the 1920s.
If the Fed keeps using these same failed policies, it’s only a matter of time until it destroys the dollar.
This is a very real threat to every American. It’s never been more important to own physical gold. As we often remind you, gold is money. It has preserved wealth for thousands of years. Unlike paper money, the government cannot destroy the value of gold by creating more of it.
If you don’t own gold, buy some today. If you do own gold, buy more.
• Gold is coming off its best quarter since 1986…
It’s now up 18% this year. We believe we’re in the early innings of a huge gold bull market. Doug Casey recently explained why gold is entering a “true mania” that could see gold prices triple in the coming years.
• And gold stocks could surge by 500% or more…
Gold miners are leveraged to the price of gold. A small jump in the price of gold can cause a big jump in gold mining stocks. For example, this year’s 18% rise in gold prices caused the Market Vectors Gold Miners ETF (GDX), which tracks large gold miners, to surge 63%.
During the 2000-2003 rally, the average gold stock rose 602%. The best gold stocks rose more than 1,000%.
• Buying gold stocks is the single best speculation you can make today…
Opportunities like this only come around every decade or so. And the buying window won’t stay open long.
Even after their recent rally, gold stocks are still cheap. GDX is still trading 66% below its 2011 high. And as we explained here, gold stocks are still historically cheap compared to the price of gold.
Right now is the ideal time to take a position in gold stocks. Because we don’t expect this opportunity to last long, we’re offering a special deal on International Speculator, our advisory dedicated to gold stocks with huge upside. For a limited time, you can get International Speculator for $500 off the regular price.
When you sign up, you’ll also get instant access to our new special report, 9 Essential Gold Stocks to Buy Right Now. This report reveals nine stocks that could surge 10x or higher in the coming years.
Chart of the Day
The dollar’s value has plunged since 1971…
Today’s chart shows the value of the U.S. dollar since we went off the gold standard in 1971. As you can see, the dollar has lost nearly all of its value. A dollar from 1971 would only be worth $0.15 today.
As long as the government continues to recklessly borrow and print money, the dollar will keep losing value. We urge you to own gold to protect your wealth from these reckless government actions.
Delray Beach, Florida
April 12, 2016
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