On August 15, 1971, President Nixon interrupted the popular cowboy TV show Bonanza.
He had important news about the nation’s finances. And he needed to announce it before the market opened the next day.
To prevent a run on the gold in Fort Knox, Nixon said the U.S. would no longer honor its promise to redeem dollars for gold.
This ended the gold-backed international money system in place since the Bretton Woods agreement of 1944. And it ushered in the paper-money era.
As I (Chris Lowe) have been showing you, we’re about to go through a similar shock to the money system.
Central banks are replacing paper money with the purely digital kind. And it will have profound implications on your wealth… your financial privacy… and your freedom.
Today, I’ll show you why the impact on gold and bitcoin prices will be extraordinary.
If you’ve been following Doug Casey, Bill Bonner, Dan Denning, Jeff Brown, Teeka Tiwari, or Nick Giambruno, you’ll know they’ve been sounding the alarm on the coming cashless society for years.
But if you’re just joining us, here’s how I summed it up in the September 11, 2019, dispatch…
Imagine a new type of cash. Unlike the kind you carry in your wallet, it exists only in digital form.
There’s no more need for ATMs. Tip jars are a thing of the past. Even vending machines are digital. Every time you spend money, it’s through a digital app. And it’s recorded in a government database.
The feds collect and store details on every transaction you make. They also know exactly where you are in the world every time you buy something.
That may have seemed “out there” back then. But recent events have shown we were right to be worried. China has just rolled out the first public digital version of its national currency.
Central banks in the U.S., Canada, the European Union, the U.K., Switzerland, Sweden, and Japan are laying the groundwork for their own digital cash.
And it’s not just your privacy you should worry about. It’s the plummeting value of these new e-currencies.
Right now, only commercial banks have accounts with central banks. So central banks have no direct way to hand out cash to consumers.
But with e-dollars, anyone will be able to have an account with the central bank via an app on their phone.
So whenever the central bank thinks it needs to stimulate the economy… it can just drop new dollars directly into people’s accounts.
This will all happen on the Fed’s balance sheet. It won’t add to the budget deficit or the national debt. So governments will be even freer to loosen their purse strings.
As I showed you on Thursday, e-dollars will be “programmable money.” Central banks can code it to do all sorts of tricks.
For instance, they could give restaurant owners direct stimulus payments… while hitting larger savers with negative rates.
They could even program e-dollars to “expire” after a certain date to force you to spend them at once.
This means bigger government… with more control. And most folks will eat it up if it means getting stimulus payments directly into their accounts.
As I’ve been showing you in these pages, gold’s and bitcoin’s supplies are limited… while the supply of dollars is unlimited.
That’s why ultra-wealthy investors seek hard assets. Their limited supply protects you from the wealth-destroying effects of inflation.
And with central banks able to drop money directly into consumers’ bank accounts, you can expect plenty of that ahead.
So it’s not hard to guess where capital will flow.
Take it from colleague Teeka Tiwari. A lot of folks know him as America’s most trusted crypto expert. But Teeka is also a big fan of gold right now…
Every central bank in the world is about to dilute the value of their currencies at a scale we’ve never seen before. That’s only going to accelerate when all cash is digital.
But they can’t devalue gold or bitcoin. That makes these assets the only refuge for investors looking to shelter their wealth from the ravages of reckless money-printing. Gold prices could easily double from these levels. Bitcoin could quadruple (or more).
Out-of-control currency-creation will massacre the buying power of dollars, euros, yen, rubles, etc.
So it’s imperative you protect your buying power with gold and bitcoin. They’ll both gun higher as central bankers continue to print money out of thin air.
We’ll return to this story in future updates. Because the plunge into a world of digital cash is only going to accelerate from here. Just today, Fed chief Jay Powell gave his input on central bank digital currencies at a conference the International Monetary Fund hosted online.
October 19, 2020