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Prepare for This Seismic Currency Shift (and Profit)

We all know the U.S. dollar is the de facto world reserve currency.

And if you've been reading my column for a while, you also know its status is being seriously challenged.

China and Russia have taken the biggest steps to that end so far.

But it seems we may already be in the planning stages to consolidate currencies, with the ultimate goal of establishing a single currency for the entire planet.

Hard to envision, but the signs are there.

That's something not meant to benefit you or me, but there are ways to leverage this intensifying trend to your advantage…

Advice from Chicago That's Sure to Be Followed Globally

"You never let a serious crisis go to waste. And what I mean by that it's an opportunity to do things you think you could not do before." –Rahm Emanuel

That, I'm afraid, is exactly what will happen when (not if) the next major economic crisis hits. I'd even venture to guess it's Rule No. 1 in the "central planners" rulebook.

Major new laws like FATCA (Foreign Account Tax Compliance Act) and a growing acceptance by major governments of a digital currency, like Bitcoin, are simply setting the stage.

The ultimate goal is to establish and roll out a single, planetary currency regime. There will, quite simply, be no alternative available.

It's all about control.

In 1969 the IMF created an international reserve asset called the SDR (Special Drawing Rights) to support the Bretton Woods fixed exchange rate system then in place. Any IMF member that wanted to participate in the system required official reserves of gold and broadly accepted foreign currencies.

Those assets were to be available to buy up that nation's currency in forex markets in order to help maintain existing (fixed) exchange rates.

However, two of the key reserve assets, gold and the U.S. dollar, were in too short supply to accommodate expanding world trade at the time. So the SDR came to life.

Yet only four years later the Bretton Woods system broke down, especially after Nixon closed the gold window. By March 1973 the world's major currencies were "unpegged" and began to trade freely at market-determined rates against each other.

The SDR's role was severely diminished… for a while.

To save the U.S. dollar's dominant position, Nixon and Kissinger hatched the petrodollar system, guaranteeing a constant and elevated (though artificial) demand for U.S. dollars worldwide.

Consolidating Signs Are Everywhere, but We're Not Worried

China and Russia right now appear to be the biggest threats to U.S. dollar hegemony, a topic I've discussed here and here. An ever-increasing amount of trade and large transactions between China, Russia, and several of their trading partners (swap deals) are taking place in their own currencies, bypassing the U.S. dollar completely.

But another significant trend I see emerging is one of regional currencies. The euro has been around since 1999 and is used today by 23 countries encompassing 334 million Europeans. Another 210 million people use other currencies that are pegged to the euro.

And despite challenges to the euro's integrity, there's considerable political will to ensure its survival. After all, it was Mario Draghi, president of the European Central Bank, who said, "…the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough."

With the BRICS currency reserve pool and BRICS Development Bank likely to be officially announced this summer, the foundation's being set for a potential new regional currency for its members in the future.

That could establish a currency to be used by a consolidated 41% of the world's population.

Join the conversation. Click here to jump to comments…

About the Author

Peter Krauth is the Resource Specialist for Money Map Press and has contributed some of the most popular and highly regarded investing articles on Money Morning. Peter is headquartered in resource-rich Canada, but he travels around the world to dig up the very best profit opportunity, whether it's in gold, silver, oil, coal, or even potash.

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  1. RUSS SMITH | July 14, 2014

    Hi!, Patrons Of Money Morning Et Al:

    One would have thought with the developments of the space programs in different countries those many decades ago, prior to the divisions now prevalent in the world of money worldwide, that the human race would have been well on its' way to intergalactic revolution and progress but instead we got side tracked into juvinile and chaotic fiat currency destructions and trade wars etc. that impeded this obvious need for progressive steps to unfold mankind's exploration potentials into his larger universe beyond the limits of OUR earthly confines. Perhaps eventually international clostrophobia will somehow initiate the challenge against such limiting stagnations and get mankind on the move towards achieving the goals for which mankind is created? Can you imagine the infinite Universe calling for US to find out what's out there created for us but instead we sit idly distracted by everyday continuing political and social upheavals the so called elite think to be more important than the complex and inherent potentials of every man's endless talents? Can this kind of endless retrogression go on without confronting the greater needs and awareness of the entire human race raging against such ancient limitations? Perhaps Christopher Columbus should have stayed home and Lewis and Clark should have never gone exploring either? This universe is so unending that exploration is without bounds except the bounds we place upon ourselves and we are proving ourselves capable of grinding universal explorations to a black hole grinding halt! On the door of one of Drs.' office there is a sign that reads: "All things are possible to those who believe!" So, when do we dispense with this political chaos we are so long in the tooth enduring and get on with what's out there pre-existing but undiscovered for how long that belongs to the whole of the human race here on Mother Earth? America: clean yourself up and get moving!!

    RUSS SMITH, CA. (One Of Our Broke, Fiat Money States)

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