Scaredy: I’ll split the difference with you and offer up the British Empire as the most recent and best example I can think of to support my theory of what I think will happen with the US and the dollar.
We are following a similar script to England’s in the sense that America, like England, finds herself attenuated and suffering from overstretch. During England’s rise, the pound sterling enjoyed a, well, sterling reputation in the world markets and was, in many ways, a similar benchmark for currency valuation.
I think the US will undergo a similar phase and I think the dollar will also suffer accordingly. I’m not naysaying gold’s value in this case, but I am naysaying all of the people out there plumping gold as “the answer” and what to own when the shit hits the fan.
England watched her entire empire unravel following WWII and yet, here she still remains. The US will always possess abundant natural resources, an enviable strategic position (geographically speaking) and a dynamic population. No, this isn’t a Pollyanna reading of events, but it more supports the notion of gradual decline to a more appropriate situation then it supports the idea of a wholesale collapse.
I’m not saying you feel that there will be a wholesale collapse, either, but many of the folks out there shilling gold are. And they’re selling fear along with the coins. That’s why I keep saying that if you read history and find the proper analogies, they’ll lead you to an understanding that many other things possess value as well and will also survive the downturn.
