Excellent Video on the Dollar Dilemma

Though it's not frequent, occasionally Bubblevision comes out with an interesting interview. This one comes highly recommended.

The key points that we find interesting and generally agree with:

• The Fed watches gold, and attempts to control it, because it's the best indicator of what they're doing to the dollar. Gold is a good buy. (Stay tuned to this blog for a technical buy signal to pick up another batch of gold or gold stocks.)
  
• The dollar is losing its status as the reserve currency. It is actually not possible to manage the currency for the country and for the world if those two entities have conflicting needs. A weakened dollar is actually good for US manufacturing over time, but it's bad for the American standard of living.
  
• The liabilities are unfundable. The dollar must be inflated to lower the cost of paying back the debt. Inflation is a required outcome. The goal is simply a controlled devaluation of the dollar. All talk of "strong dollar"is just that--talk.
  
• 4% inflation for 17 years sounds about right...if they can keep it that low. There is a huge risk when a country has to intentionally devalue its currency. We believe that there will ultimately be an uncontrolled fall in the dollar.
  
• The Strategic Drawing Rights (SDRs), which are an attempt to create an international unit of exchange to replace the dollar based on a basket of currencies, are simply a money printing exercise. There's nothing backing them--yet. Gold may yet end up being the currency of international exchange...
  
• There is a huge geopolitical and national security risk associated with devaluing the dollar. It is, however, inevitable that the risk must be undertaken. (Try reading the book "The Fourth Turning" by Strauss and Howe, available from our Amazon bookstore at the bottom of the blog.)