Gerald Celente: New Reserve Currency After 2012 Election (GLD, SLV, UUP, IAU, UDN, SGOL)
Dominique de Kevelioc de Bailleul: Get positioned for the dethroning of the U.S. dollar as the primary reserve currency, according to Trends Research Institute Founder Gerald Celente.
Since the balance of global trade has changed quite dramatically from 1944, the year of the Bretton Woods agreement and the introduction of the dollar standard, Celente sees the tend of competing currencies taking on more of the dollar’s role for international trade accelerating. Get my next ALERT 100% FREE
As far as when western powers will move to a new currency, which has been speculated to include a weighted basket of currencies as well as a gold component, it won’t happen during an election year, Celente speculated. Politics comes first.
“I would expect it to happen after the presidential elections,” Celente told Russia Today. “They’re going to do everything they can to try and keep this thing going and try to sooth any kind of ripples coming from around the world.”
The transition away from a rapidly declining dollar as the primary global central bank asset has been slow in coming, too slow, in fact, prompting today’s fastest growing economic powers, the BRICS nations, to make other arrangements between themselves without the assistance or cooperation of the US.
Presently, Brazil, Russia, India, China and, the newcomer, South Africa, which comprise the BRICS, collectively, surpass the US in total economic output, population and central bank reserves.
As Brahma Chellaney of the Centre of Policy Research put it in her article published in Hindustan Times, “The BRICS grouping, after all, represent more than a quarter of the Earth’s landmass, over 41% of its population, almost 25% of world GDP, and nearly half of all foreign-exchange and gold reserves. [...] BRICS represents the first important non-western global initiative in the post-Cold War world.”
At the time of Bretton Woods, nearly 70 years ago, the choice of the dollar as the world’s trading and reserve currency made sense at that time, according to Celente. As the aftermath of the war in Europe left Britain and the rest of continental Europe to shambles, the US industrial base, on the other hand, remained intact.
Moreover, outside of Europe and the US, none of the BRICS during the 1940s represented any meaningful impact to global trade and GDP.
But through the years, the US has fallen steadily from grace, with no end in sight as US budget deficits continue to grow and complaints of dollar devaluations go unanswered. So, with little patience remaining, the BRICS have decide to ditch the dollar.
As the latest example, late last month in New Delhi, India, the five-nation block recently completed an agreement at the Fourth BRICS Summit that paves the way for the emerging economic juggernauts to settle trade with their own currencies. And that hasn’t been the first agreement reached that effectively dethrones the dollar, and it won’t be the last; it’s an ongoing trend, Celente reckons.
“So what we’re seeing is the decline of America and the building up of really a twenty-first century economy,” Celente said, and added, “So, what this means to Americans is continued decline of quality of life.”
But, until Election Day, the Fed and the US government are determined to utilize all means available to them to put off the inevitable resumption of the dollar’s demise. However, after the election, higher food and gas prices are expected to resume due to further devaluations of the dollar at the hands of the Fed.
“The books are being cooked; the numbers are a lot worse then they are,” Celente concluded his interview. “And all the Federal Reserve is doing, I believe, is pumping this up to make it so that looks like there’s a recovery up until Election Day.”
Through, he is not and investment adviser, Celente has said in past interviews, however, he likes holding gold during the difficult transition years expected ahead for the US dollar.
Related: SPDR Gold Trust (NYSEARCA:GLD), iShares Gold Trust (NYSEARCA:IAU), iShares SilverETF (NYSEARCA:SLV), PowerShares DB US Dollar Index Bullish ETF (NYSEARCA:UUP), PowerShares DB US Dollar Index Bearish ETF (NYSEARCA:UDN), ETFS Gold Trust (NYSEARCA:SGOL).
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