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Nobel Prize winner predicts the death of the dollar
By Contrarian Profits; August 31, 2009

Say goodbye to the US dollar as the world’s reserve currency. Writing in the Washington Post, Nobel Prize-winning economist Joseph Stiglitz says America's massive deficit means a new global reserve system is approaching.

The domino effect is straightforward: Higher deficits spark market concerns over future inflation; concerns of inflation contribute to a weaker dollar; and both come together to undermine the greenback's role as a reliable store of value around the world.

[Money supply from 1946-2009 has been increased 5938% to $8,235,900,000,000. In that time, the US has seen ... an explosion of the welfare state and the complete annihilation of the buying power of the US dollar.]

...Of course, a new global currency won’t happen right away. It will take global policy makers months -- maybe even years -- to wean the world off the greenback. But Stiglitz says its coming...

USAGOLD Comment: Judging from the gathering evidence of articles such as the following item, it seems that China sees the road ahead and is wasting no time...

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Chinese sovereign wealth fund dumping dollars for strategic investments like gold
By Lawrence Williams, Mineweb; September 2, 2009

Probably the most interesting of the recent reports of what is happening with Chinese sovereign wealth fund investment outside China has come from Paul Mylchreest's Thunder Road Report where an ex-U.S. intelligence service member is quoted. He reports that he has a friend who is in the Chinese Sovereign Wealth fund sector who says (hearsay I know and it wouldn't stand up in court) indicated that the wealth fund analysts were working all hours of the day and night trying to put investment deals together - particularly in the oil and precious metals sectors. The conclusion is that China recognises that the U.S. dollar is going to tank and it wants to convert as much of its trillions of dollars of holdings into strategic assets as possible before the collapse really takes hold.

The trouble is there is too much money available chasing too few assets - and too little time available - or such is the conclusion. As a result the Chinese government seems to be doing its utmost in trying to persuade the Chinese public to buy gold and silver by relaxing the restrictions - it's now easier to buy precious metals in China than in the U.S. - and by pushing gold and silver investment on state-owned television. If this continues the likelihood is that China will permanently overtake India as the world's biggest buyer of gold and silver, while the country's store of wealth will help shield it against further western economic collapse.

...Paul Mylchreest comments that in Latin America, where he has been living for 25 years, for the first time he can remember, locals are now preferring their own currency to U.S. dollars. He goes on to finish with this comment: "If a fellow with no education, a poor diet, and inadequate medical treatment living at 3,500 metres above sea level can figure out that the US dollar is undesirable as a store of wealth, how much longer do you think it can last as the world's reserve currency."

USAGOLD Comment: Let's wrap things up with the latest price prediction -- something you can really sink your teeth into...

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"Paper money eventually returns to its intrinsic value ZERO"
By Egon von Greyerz, Matterhorn Asset Management; August 27, 2009

The autumn of 2009 will be full of shocking surprises in the banking sector, in financial markets and in the world economy. There will also be shocking falls in stockmarkets, in the dollar and in bond markets...

Never before have governments in the world expanded deficits and credit to the extent that we are seeing now...

The major beneficiary of the dollar fall will be gold (and silver). Gold has all the advantages that the dollar has not...

With world debt probably increasing by as much as $7.5 trillion in 2009, there will be at least 100 times more paper money created than new gold produced.

A wealth preservation portfolio should contain the following elements: Physical gold stored outside the banking system. Gold is likely to reach $1,400-$1,600 in 2009 and much higher in the next few years.

USAGOLD Comment: Company founder and president Michael J. Kosares appraised the preceding article as follows: "This is as good an “on-the-ground” analysis as I have seen over the past several months."

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Also, thanks to Ed Stein for his latest contribution to USAGOLD: "Cash for Clunkers"

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