If the Masses Lose Confidence in the Currency…

At a recent  meeting of the American Economic Association a vote was held about whether or not the United States should back its currency with gold. Not surprisingly, 100% of mainstream economists educated by our most prestigious universities were against such a measure.
From the top down, there is a cult-like belief that our paper monetary system is absolute and infallible.
Yet, as we have seen throughout history, and especially in the last decade, currencies backed by nothing are always debased, eventually being worth even less than the paper they’re printed on.
If you’re one of those contrarians who happens to believe, like investment guru Jay Taylor, that market manipulation is rampant and the only reason why our ‘best and brightest’ continue to promote the legitimacy of paper currencies is to maintain a perception of stability in a crumbling monetary system, then the following interview from the Sound Money Campaign is a must watch.
Taylor discusses his thoughts on the importance of hard assets, the meaning of real value, investment strategies, and international diversification to avoid a government whose aim is to punish those who will survive and thrive when things turn sour.
Moreover, Taylor delves into the real reason for why the Federal Reserve and leading mainstream economists continue to push policies that led to the financial meltdown of 2008 and why those policies will eventually lead to something much, much worse :

I think more than that is the talk that comes out of the Fed and the establishment… I think that, in part, is to keep people believing in the integrity of a system that doesn’t have much else going for it other than  talk.
Because the debasing of currency is relentless.
The Federal Reserve is expanding its balance sheets, it’s creating money out of nothing, it’s devaluing the savings of individuals through the debasement of the currency and through zero interest policies.
They’re just trying to keep people off balance so they don’t bet in one direction in favor of inflation hedges.
They want to keep people believing [inflation] is not going to be a problem. they need to do that in order to keep people believing in the dollar, which they create out of nothing.
So, it’s a giant con game.
In the end, Pinocchio’s nose will be exposed and [free] markets win out.

(Watch the interview at Youtube)

Those of us who considers ourselves ‘gold bugs’ have lost confidence in the currency a long time ago. We keep using it because we have to, because that’s what we have to  use to buy and sell things on a day to day basis.

If the masses lose confidence in the currency – and this is why I think the Fed is fighting so hard with these mind games that they play to keep people off base and keep them believing in the legitimacy of the paper monetary system – if people lose confidence in the monetary system in mass I think gold and silver will hold up as a currency.
When that happens, look out, because it will be an unprecedented event and one that promises to shake the confidence of every financial, economic and political institution in the world.
What we’re talking about here is the collapse of the world’s reserve currency – the full faith and credit of the United States of America.
Imagine not being able to complete seemingly normal transaction like buying food, gas or paying a mortgage because the dollar is no longer a viable mechanism of exchange. Likewise, consider the international implications when the US government itself can no longer borrow money from foreign banks or confidence has deteriorated to such an extent that the dollar is no longer accepted as payment for the billions of dollars in goods we import daily. It’s a situation that would make it nearly impossible for us, as a nation, to acquire essential commodities to keep our country running.
Given that scenario, one begins to understand why Western banks and governments are doing everything they can to maintain a perception of economic health and stability. The alternative really is a widespread, unmitigated disaster.
It’s a sobering thought and one that will likely come to pass in our lifetimes.
Should such a currency event occur, how will you engage in trade? As we have seen in Greece, there is a strong likelihood that black markets will pop up almost overnight, so having assets of value will certainly be an important part of any post-collapse survival strategies.

Here’s the other thing that people really need to look at.
We’re always focused on gold and silver as determined by that fraudulent measure called the U.S. dollar. What I think people should rather do is look at what will gold buy and what will silver buy in terms of a basket of commodities.
Both metals did remarkably well for quite a while, and still are doing quite well since the Lehman Brothers [collapse]. Both of them gained a tremendous amount of purchasing power vis-a-vis other commodities.
…

All I know, is gold is real money and the stuff they’re creating out of nothing is a fraud.

Hard assets and sound money will be the only thing of value should our system come unhinged. Those with cash savings or retirement accounts will be wiped out, just as before, unless they are diversified in such a way to avoid the initial hit and the government wealth grab that will follow. In 2008 the-powers-that-be utilized a wide variety of so-called “monetary tools” to stabilize markets and economies. Should those markets and economies crash once again, their last ditch effort to keep a system on the brink from collapsing will be exposed as nothing but the fraud and conjecture many have warned about.
Be ready for that when it happens, because it’s going to be a very rough ride for everyone.