Episode Details

In 2004 James Turk and John Rubino published The Coming Collapse Of The Dollar And How To Profit From It: Make A Fortune By Investing In Gold And Other Hard Assets. I discover from Amazon that I “purchased this item on 18 Feb 2006”. Isn’t digital record keeping amazing?

It remains one of the best books about gold and gold investing that I have ever read, beautifully articulating the anti-dollar, anti-fiat, anti-money printing, pro-gold narrative. Those that followed the advice of the book will have made good money – as long as they got out in 2011.

There’s just one thing: the dollar never collapsed.

Sure, its purchasing power has steadily eroded. Each year it buys you 10%-15% less house, less S&P 500, less good or service than the previous, so that if you compare 2004 prices with today the dollar buys less than half as much house or S&P 500 as it did then.

Have US wages more than doubled by way of compensation? No. They have gone from $60,000 to $75,000. The taxes you pay on them have gone up too.

Sterling has been even worse. Back then a pound got you two dollars. Some people could actually afford a house.

But is a 55% loss of purchasing power over 20 years a collapse?

Not really. Currency collapses happen over quicker time frames, as in Weimar Germany, Zimbabwe or Venezuela.

The narrative is shifting again

The dollar-is-going-to-collapse narrative really got going around the global financial crisis in 2008 and with all the money printing that followed. In a way, it spawned bitcoin. (If you think gold bugs are extreme in their anti-fiat narratives, go and have dinner with some bitcoin maximalists.)

But then, after 2011, gold went into a bear market. “Bear market” isn’t strong enough to describe what happened to gold mining. Gold mining really did collapse.

The dollar, meanwhile, actually strengthened. Not versus stuff we actually buy, like houses, equities or cars, but versus other currencies.

I’m saying this because I have noticed a discernible change in narrative over the last 12 months. No longer do we hear about the imminent collapse of the US dollar or of fiat currency. Now the buzz word is “de-dollarisation”. I’ve written about it a lot.

The US dollar is the global reserve currency. It is the default for international trade. Participants trust Swift and the international banking system enough to use them for payment. But there are many nations who would prefer, if they could, to use something else. China would, I’ve little doubt, like to see its yuan replace the US dollar. Russia would rather use roubles. And so on.

The de-dollarisation theme really took hold in the wake of Russia’s invasion of Ukraine, when the US weaponised its financial might to confiscate Russian dollars and freeze Russia out of