August 15, 1971

On August 15, 1971, Nixon decoupled the dollar from gold because, well, the foreigners wanted too much gold and US stores were dropping fast... not to mention that there was then no limit to printing money. The dollar then promptly lost 95% of its value versus gold.

It was great while it lasted, being able to print money at will.

There have been full-page articles since at least the mid-90s warning that the scheme could not go on forever and that the dollar would collapse.

When I used to say to people that the dollar could drop by half, they would always say that that was impossible, to which I responded, "Why? That's what happened before."

By one measure, since 2002, the dollar has dropped by 40% versus a basket of major currencies.

This has caused a run on commodities as everyone with dollars tries to buy something... anything... that might hold its value better.

And while the Federal Reserve tries to save leave-us-alone-when-things-are-well-but-bail-us-out-at everyone-else's-expense-when-we-thieve Wall Street by flooding the market with half a trillion dollars (so far), all they do is drive the dollar lower. So we are trapped.

Since everyone's memory is so short, you should think about what happened in the 70s... interest rates were around 18%, inflation (which is effectively a way of defaulting on debt) was around 18%...

There is no way out except to print even more money, which will cause the dollar to drop even further, which will require the printing of more money in a vicious circle until it finally bottoms out.

The US is no longer the world's largest economy. The largest economy is now the Eurozone.

And in what may be the most telling sign of all, international criminals who used to deal only in $100 bills no longer want them and want euros instead.

http://www.financialsense.com/fsu/editorials/bms/2006/0511.html