(OPINION) ETH – If we keep treating the U.S. dollar like it is toilet paper, it is just a matter of time before our entire financial system goes down the tubes. At this moment, the dollar is still the primary reserve currency of the world and the fact that we control it is an absolutely massive advantage for us.
Because the rest of the globe uses dollars to trade with one another, that creates a tremendous amount of artificial demand for our currency, and it keeps the value of our currency elevated at a level that is much higher than it otherwise would be. But now that we are starting to act like the Weimar Republic in their heyday, it is only going to be a matter of time before everyone else on the planet starts abandoning the U.S. dollar in droves.
We are literally killing our “golden goose”, and most Americans do not even understand what is happening. The remarks that John Williams made about hyperinflation during a recent interview with Greg Hunter have created quite an uproar, but the truth is that Williams is right on target. We are on the exact same path that Zimbabwe, Venezuela, and so many others have already gone down, and the very foolish decisions that we have been making are only going to end in complete and utter disaster.
To illustrate what I am talking about, I would like to direct your attention to what has happened to M2 during this calendar year. For those that are not familiar with M2, here is a definition that comes from Investopedia… M2 is a calculation of the money supply that includes all elements of M1 as well as “near money.”
M1 includes cash and checking deposits, while near money refers to savings deposits, money market securities, mutual funds, and other time deposits. These assets are less liquid than M1 and not as suitable as exchange mediums, but they can be quickly converted into cash or checking deposits.
As you can see on this chart, the M2 curve has been rising at an exponential pace in 2020. In fact, since the pandemic started the curve has nearly gone vertical… If we keep doing this, we won’t be facing major financial disaster years from now. Rather, it will just be a matter of months before the wheels start coming off. But our leaders do not have any intention of changing course now.
During 2020 the Federal Reserve has been pumping money into the financial system at a rate that we have never seen before, and they have indicated that they plan to continue to support the financial markets as we head into 2021. READ MORE
