A Peek at the US Dollar on the Verge of World War D

The talk around the coffee machine within the Money Morning office has been focused nearly solely on one thing: The Globe War D conference starting this Monday.

I’m excited. Actually, I think we all are.

You see, while we take the time each day to share our thoughts, ideas and forecasts with you by email, all of us very rarely get to do that within person. And I know our publishers have some very special and perhaps even radical ideas up their sleeve with this conference.

If you can’t make it, don’t worry. We’ve got you covered. You can place a pre-order for the DVD of the event here at a 25% discount. Also, throughout the 7 days we are going to share some of the ideas presented during the two day talk fest.

In addition, of course, we’ll take advantage of social media. If you haven’t already added our Twitter handle @MoneyMorningAU, make sure you do.

So, what else could you expect?

The thing is, I’michael just not sure…

Most of the editors have kept their presentations below wraps, with only the compliance guy getting a look in. I was assisting Nick Hubble, editor of The Money for a lifetime Letter run some statistical data for which our future population may look like. The end result? Two charts which move in opposite directions!

Considering The Money for Life Letter is definitely an alternative newsletter for your twilight years, the results could be terrifying.

Aside from our own editors, we have some incredible speakers presenting. Two presenters, Dr Marc Faber and Satyajit Das, are widely known for their out-of-the-box thinking. Both of these are the statistical outliers. The voices you don’t get to listen to in the mainstream press.

And if they do get a guernsey on prime time, it’s rarely taken seriously. Often you’ll discover it’s only when something they’ve predicted actually happens, that somebody in the mainstream will dig out a quote from them – generally from years ago. The TV presenters may reluctantly agree that indeed, event A or event B was predictable.

However, World War D isn’t our gloomy report about the global economic climate. It’s about a transition to a different economy and how to prepare for it.

‘It’s as sound as a dollar‘

That’s a line in the movie Cat on a Hot Tin Roof. And while the almighty American dollar may have been sound then, it ain’t right now.

In 1958, even though gold prices were only USD$35 per ounce, each and every dollar in the United States was supported 10% by gold. Today, there is nothing backing the dollar except the term of the US government. But that’s OK because we’re this is not on a gold standard anymore, right?

When the US dollar was still on a defacto standard in 1958, the M2 money supply was US$285 billion. Now, it’s US$11,112 million. In the same period, the gold reserves for America have dropped from 18,291 tonnes to eight,137 tonnes.

Look at this way. The entire money supply of America has become 38 times higher, as the amount of gold held has shrunk to less than half.

Why do I provide this up? Because the All of us dollar’s not sound.  The development in credit and money provide, and shrinking gold stockpiles isn’t conclusive proof of this. But it does help explain just how out of balance things are.

The mammoth credit and fiat currency experiment is nearing an end. Moreover, there must be something else to take its place.

But what?

This is what the actual presenters will discuss at the World War D conference on Monday. Next week, I should be able to shed some light on how our presenters think our currency program will change. And what digital money will mean for you.

In the meantime, have a great weekend. I hope to see you at the conference.

One last thing. The same year US gold reserves started to fall and credit started a slow expansion, the very first microchip was developed. Chance, maybe?

Shae Smith+
Editor, Money Weekend

Ed Note: World War D begins on Monday! Marc Faber, Jim Rickards, John Robb, Satyajit Das, Byron King and Richard Duncan – six from the brightest minds in global finance – are about to descend on Melbourne. If you can’t allow it to be don’t worry. We’ll be live tweeting the event throughout the two days. To obtain a blow-by-blow breakdown of everything happening from World War D follow us on Twitter right now @MoneyMorningAU and to see the event from Technology Analyst Sam Volkering’s point of view, follow him at @techinsider_sv.