If the Fiat currency fails

At least since the beginning of the Greek crisis, the euro has clearly been at the top of the most discussed currencies in the world. And the majority of economic experts agree that it is built on sand and can only fall in the years to come - especially against the US dollar.

The annual forecasts of German banks also regularly include the devaluation of the common currency against the greenback by an average of 3 to 4% per annum.

US analysts do not trust the euro - but neither do they trust the US dollar

For professional reasons, I receive many financial newsletters from North America, which often also shed light on the currency structure and make appropriate suggestions as to which currencies investors should best invest in and which they should avoid. The result of these analyzes makes me smile almost regularly, because many years ago these "experts" could not do anything with the US motto, and they predicted the continued decline.

Washington's escalating debt, paired with the efforts of the BRIC states to heave their own currencies onto the throne as potential successors to the US currency, evidently inspired enthusiasm. For a few years now, however, the euro has replaced the US dollar as a "permanent bankruptcy", because while the US experts at least still know who owes what amount, for the euro zone it is completely unclear which amounts will end up being by whom are responsible and who could jump aside whom.

The Japanese yen is also doomed

And just imagine: It is not only the euro and US dollar that can hardly inspire the analysts, the third world currency in the league has also not been able to convince an “expert” for years: the Japanese yen. By the way, many consider this to be the first of those currencies that will collapse under the weight of their own debt. In principle, the yen represents the exemplary example of how FIAT currencies, i.e. currencies that can be newly created, created or printed in unlimited quantities, are doomed to certain extinction.

The reality looks different - still ...

But please believe me that the reality or life expectancy of the currencies mentioned looks completely different from what is repeatedly claimed. The US dollar will remain at the top of the currency pyramid for many years or possibly decades. If only because New York City is the center of financial markets and credit creation. Not only the monetary, but also the monetary and cultural influence that spreads from here across the entire globe is repeatedly underestimated.

As far as the euro is concerned, it will trade more firmly rather than weaker against most other currencies in the coming years. The weak creation of money and the balanced trade balance already make the euro a comparatively “scarce currency” today. Merely going it alone by the Greek central bank, as I have already described, would seriously damage the euro, but this is hardly tangible at this point in time.

As for the yen, more than 90% of the national debt is held by domestic institutions. The government is therefore - unlike, for example, those in Germany, France or South Africa - hardly dependent on the behavior of foreigners. This fact is changing now, but it will be many years before Tokyo will have to consider international investors in order to reduce its record debt of 250% as measured by GNP.

Gold price signals "no imminent danger"

At the moment, a look at the weak gold price also signals that there is apparently no threat to the currency markets in arrears. The confidence of investors in the important currencies and the monetary policy of the central banks is apparently greater than seldom before, also to be seen in the low capital market interest rates. But how can that be possible in view of the enormous uncertainties and the numerous interventions, for example in the bond markets?

The answer is easier than you think: The dull feeling of more and more people regarding the validity of our financial system with its FIAT currencies is unimportant as long as these currencies are accepted without reservation in everyday life, because: The "big money" holds it Supporting institutions have their backs, are completely free of doubts and invest unchecked, and consequently have a stabilizing effect on the system. In principle, one can also say that these major investors belong to the "system" and would therefore only stand against central banks or important governments in an absolute emergency.

Conclusion: The "black swan" represents the greatest risk

But of course this moment is getting closer, with every day the additional loss of confidence increases the chance that the population will no longer accept euros, dollars or yen. Or investors are no longer willing to accept the charades from politics and monetary policy. Incidentally, this development would be indicated by rising precious metal prices again - but by this I do not mean the periodic ups and downs, but, for example, a sharp rise of 20 or more percent over several days in a row.

Whenever that happens - and you and I will see it later - there is an increased threat, something very important in the financial world has changed. And then everything can go very quickly, because once a FIAT currency collapses under the debt house of cards, the rest follows in no time at all.

Incidentally, this compulsive development is underestimated by many who suspect that if the worst came to the worst, only the yen or the euro would go under, but other currencies would survive this development unscathed. I can assure you that very few currencies, especially domestic currencies that are not traded heavily on the foreign exchange markets, have what it takes to suffer little or not at all from the imminent reorganization of the financial system.

It is therefore certainly easier for you as an investor to take the path via gold and silver straight away in order to take the edge off this coming development because your assets are secured.