© CEOCFO Magazine -
CEOCFO Magazine, PO Box 340
Palm Harbor, FL 34682-
Lynn Fosse, Senior Editor
Steve Alexander, Associate Editor
Bud Wayne, Editorial Executive
Christy Rivers -
Our Financial World Has Already started to Collapse
As the CEO of Voip-
Coronavirus is not going away; we must adjust our economies
Currently, the science indicates that covid-
Besides the risks and harm covid-
In layman’s terms I am going to pose two possible options about how we can rebuild the post-
Impose a Moratorium on All Bond Payments at a Reduced Interest Rate
Stimulus packages passed by legislative bodies have caused governments to print trillions of dollars in order to preempt what would have been sure economic collapse caused by the pandemic. The population needs to be fed and kept healthy, otherwise you risk the rise of civil disobedience and anarchy. The United States, Europe, Japan, Canada, Australia and even China were already running up massive debt before covid-
As a result, they are now forced to print money to avoid economic collapse. But when they print money inflation rises, and increased inflation reduces the value of bonds.
If they don’t print money, their economies will collapse. When they print money, the worth of bonds decreases; bondholders experience a reduction in their value and can do nothing about it. A country cannot secure those massive debts in the event they default unless their currency is backed by the gold standard.
How has the United States been able to sell bonds while continuing to print money? Until now the reason they could do so was because of a strong GDP. Before the current pandemic, the American economy was booming, unemployment was at historic lows and the dollar was strong and well supported.
As for You and I and Everyone Else, the Value of our Assets Has Already Decreased by 50%
The solution is a two-
Step One: Reduction of Bond Interest and a Moratorium
All debt and bond holders must agree to a moratorium and a reduction of the interest rate. The moratorium would be imposed on cashing bonds for at least three to five years. Additionally, reduce the interest rates on bonds to a maximum of one quarter of a percent.
What would happen if futures contracts and derivatives go into default when called?
Step two: Reintroduce a New Gold Standard
The gold standard was an advanced control measure formerly used by many large countries which secured their currency with gold reserves and protected against possible financial collapse in the event of a default. When the gold standard was in place, countries could not freely print billions of dollars in currencies without consequence like they so easily do today.
The gold standard needs to be reintroduced now.
U.S. History of the Gold Standard
In 1785, the United States adopted a silver standard to back its currency and stayed there until 1879 before switching to a gold standard for the next 54 years.
On April 5,1933 executive order 6102 was signed by President Franklin D. Roosevelt, making gold ownership in the United States illegal. The order mandated Americans turn in their gold coins, bullion and certificates to the government for a price of $20.67 per ounce. Two months later, on June 5, 1933, FDR took the United States dollar off the gold standard. In 1971, nearly 40 years later President Nixon ended the convertibility of the U.S. dollar, no longer allowing foreign governments to exchange their dollars for gold.
If the might of the US Dollar is not backed by gold and no longer linked to GDP, is it possible to set a realistic value on the dollar? Restoring the gold standard would increase the integrity and value of the U.S. dollar.
Throughout history there have been several U.S presidents in favour of bringing back the gold standard including John F. Kennedy, Ronald Regan and current President Donald Trump. Though President Trump favors it, he admitted it would be difficult. “Bringing back the gold standard would be very hard to do, but, boy, would it be wonderful,” said Trump. “We’d have a standard on which to base our money.” The president backed up his desires when he nominated economic advisor and gold standard proponent Judy Shelton to the Federal Reserve. The pending confirmation of Judy Shelton and the need to rebuild the economy following covid-
The Coronavirus Has Taken Away the Controls of the Federal Reserve; No Measures of Control Equals No Value
The Federal Reserve is an independent agency of the United States government. Throughout their history, the Fed has always opposed being on the gold standard because it limits their ability to print money at will. In addition, free access to printing money allows fiscally irresponsible lawmakers to enact out of control budgets by a vote and the stroke of a pen.
The out of control printing of money has had and will continue to have serious consequences on the global economy. When the day comes that a major country defaults on a large futures contract, the economic pyramid will collapse like a house of cards.
The Federal Reserve is a Quasi-
As with past Federal Reserve Boards, the current board does not favour returning to the gold standard. Currently, the Fed has the ability to print as much money as needed; the sky is the limit. Going back on the gold standard would limit their ability to print endless amounts of money, because they would only be permitted to print as much currency as is backed by their gold reserves.
In the coming post-
While there has been much hype in recent years over digital currencies like Bitcoin and other cryptocurrencies, they are simply not reliable. Cryptocurrencies cannot be properly measured outside of a closed loop of dealers. Digital currencies could collapse with the reinstitution of gold standards.
Cancel All Debts and Go into Default
Option two is a suicidal choice but may be the only option for those economies that fail to act now and execute option one and impose a gold standard.
Some have suggested countries struggling economically after covid-
What Events Could Trigger Option Two?
Calling or exercising large debt in the form of derivatives, bonds and futures contracts could trigger an inter-
Any countries that choose option two and voluntarily go into default will be putting what could be the final nail in the coffin of the current global economy. This would lead to a worldwide collapse of the banking system and a run on local banks. World famine, civil unrest and anarchy would ensue. This may seem a bit extreme to some, but it is not unprecedented. In the aftermath of covid-
To visualize the impact defaulting would have on the population at large, we need only look to Greece and Cyprus. Greece and Cyprus are tiny in comparison to the world’s large economies, yet their default brought dire consequences upon their citizens. Imagine the magnitude of the fallout if one of the elite economies were to suffer financial collapse.
Run on banks
Government seized the accounts of large depositors
Implementation of several tax increases
Food and medicine shortages
Period of civil unrest and demonstrations
Protect Your Personal Finances
I personally would choose to protect my finances at a time like this by replacing my bank deposits with physical gold and precious metals. Physical gold has an excellent track record as an investment and is a great hedge against inflation. It does not lose its value when governments decide to print more money. It’s also advisable to keep your physical assets in your own custody such as in a secure, fireproof safe, or in a reputable private vault storage facility as opposed to a bank safety deposit box. One of the problems with bank deposit boxes is accessibility. When a bank becomes insolvent it gets taken over by the feds and all of its assets become frozen, and access to your valuables is temporarily suspended. Regaining access to your safety deposit boxes could become a major challenge and take, weeks, months, or worst-
Another excellent leveraging strategy is to take out a bank loan at the current interest rates and use the funds to acquire physical gold. Odds are in your favour the gold will appreciate at a much higher rate than the cost of the loan.
It’s Time for Governments to Protect Their Country’s Real Estate and Lifeline Assets
Legislate a “Traitors Act”
In the country where I live, Canada, the government has failed to control rampant real estate acquisitions by foreign investors, namely real estate investors from China. I am not referring to the large population of hard-
Additionally, billions of dollars of Vancouver real estate investments acquired by Chinese investors was done so using laundered money while greedy politicians turned a blind eye. The Canadian government needs to take control of the situation and should give serious consideration to imposing a ten-
To protect their national security interests, western governments should consider enacting a “Traitor Act” which would prohibit foreign outsourcing and ownership of essential life line necessities like pharmaceuticals, food, water, agriculture, and energy along with anything needed for sustaining the health and life of their countries. In the interest of each country’s national security, China can no longer be the pharmacist to the world.
Globalization is a fancy word and way of stealing jobs from ordinary people. It is harmful to national security for a government to allow a foreign government to control its country’s assets; thereby making the foreign government the master and the resident workers the slaves.
Coronavirus Interview 1
Coronavirus Interview 2
My next financial take will be on a similar subject, supporting Alberta, Canada’s Premier Jason Kenney in his quest to protect the North America oil industry by imposing an oil tariff on behalf of Canada and the United States.
“Much of the attention right now is on the health impact of covid-