When Will the US Dollar Die?

Ever since the markets collapsed within 2008, folks have predicted the collapse of the US dollar.

Some thought it might collapse that very 12 months.

In hindsight, the thought of that may seem ridiculous. However at the time, it was a real concern.

There were also those who believed the US dollar would fall, but that it would have a long timeyears, perhaps decades.

But there was another school of thought. They believed that while the US dollar might collapse, it wouldnt be the very first paper currency to collapse.

They believed that before the US dollar collapsed, all other paper currencies might collapse first.

Its an interesting idea. Every time there is a monetary panic, the knee-jerk reaction is perfect for investors to migrate to the All of us dollar and US ties.

So in the event of a total financial fall, maybe that will happen. Individuals will ditch Aussie dollars, lbs, euros and yen, as well as instead theyll hoard US dollars.

Only then, after the destruction of all additional paper currencies, will people realise that the US dollar doesn’t have value either. Then, precious metal (and silver) will go back to their rightful place as units of money.

But what most people dont realise, is that the value of paper cash has already collapsed. The US buck has lost 98.3% of its value since 1920.

How do I realize that? You just need to look at the value of the US dollar relative to the precious metal price. Most people look at the gold price and see that it has gone up in value.

To see the wear and tear of the US dollar, you need to invert the chart. The chart below shows how many oz . of gold you could get with regard to US$1 in 1920, versus how many ounces of gold you can get for US$1 today:

Click to enlarge Source: Bloomberg

In 1920, you could get 0.05 ounces of gold for US$1.

Today, US$1 will only get you 0.00085 ounces of gold.

Thats the destruction of the purchasing power of document money by more than 98%.

So right now we ask you, is it truly so crazy to think that certain day the US dollar will finally die?

More on the end of the US dollar from Jim Rickards today

Cheers,

Kris