PLP Advisors, LLC

Dennis Tubbergen Looks at the End of the Dollar as the World's Reserve Currency

Financial advisor studies the world currency.

 

Grand Rapids, MI -- (ReleaseWire) -- 03/06/2013 -- Financial advisor Dennis Tubbergen spends a lot of time advising his own clients and interviewing guests for his Everything Financial Radio Show. But he also manages to write a financial blog which can be viewed at http://www.dennistubbergen.com. On February 27, 2013 Tubbergen's blog was titled, "The End of the Dollar as the World's Reserve Currency?"

"Worldwide, many central banks are money printing in order to keep inflation in check and make their country's exports more attractive to foreign consumers," began Tubbergen. "Trouble is, this money printing cannot lead to economic success for every country that pursues this policy. It is essentially a zero sum game with winners and losers."

Tubbergen states the United States has been engaging in this money printing or quantitative easing to the tune of almost $3 trillion of new money being printed, much to the dismay of countries that use the dollar in international transactions. The Wall Street Journal reported in 2011 that 85% of all international transactions occur in U.S. Dollars.

"Slowly, that trend is changing," explains Tubbergen. "China has begun to use gold-backed trade notes for trading with some of its trade partners."

Tubbergen quotes from www.examiner.com published February 7, 2013.

On Feb. 7, precious metal analyst and mining executive Jim Willie announced that the global economies of Asia, and other parts of the world, are preparing for a new trade settlement note to replace the dollar in international transactions. What is projected to be called the Gold Trade Note to replace the U.S. Dollar, this form of credit will carry the same protections that the reserve currency does, but will use a gold backed system of currency that will bypass the dollar, the Bank of International Settlement (BIS), and most centrally controlled fiat currencies.

The final blow to the U.S. Dollar will come from standard non-energy trade being settled outside any U.S.$-based terms. The practice is accelerating, initiated in Asia, but spreading westward fast, urged along with a giant push in response to the Iran trade sanctions. Every action brings about an equal and opposite reaction.

The crux of the non-U.S.$ trade vehicle devised as a U.S. Dollar alternative will be the Gold Trade Note. It will enable peer-to-peer payments to be completed from direct account transfers independent of currency, and most importantly, not done through the narrow pipes and channels controlled by the bankers with their omnipresent SWIFT code system among the world of banks. The Gold Trade Note will act much like a Letter of Credit, serve as a short-term bill, and maybe even push aside the near 0% short-term U.S. Treasury Bills that litter the banking landscape. Any bond or bill earning almost no interest is veritable clutter. The zero bound U.S. Treasuries open the door in a big way for replacement by a better vehicle.

The new trade notes will involve posted gold as collateral, whose entire system for trade usage will bear a massive gold core that also will include silver and platinum, maybe other precious metals. The idea is to avoid the FOREX systems, to avoid the U.S. Dollar, and to avoid the banks as much as possible in a peer-to-peer system that can be executed between parties holding Blackberry devices or simple PCs to complete the payments on transactions.

"Here's another terrific example of a particular policy creating an unintended consequence," claims Tubbergen. "The Federal Reserve, by keeping interest rates artificially low and engaging in money printing is attempting to stimulate the economy."

According to Tubbergen, other countries around the world who use the U.S. Dollar as a means of commerce don't like the fact that some of their assets need to be parked in U.S. Dollars in order to trade with other countries. After all, there is no yield and the U.S. Dollar is a depreciating asset.

"In my view the demise of the U.S. Dollar as the world reserve currency is a given," concludes Tubbergen. "It is less clear WHEN the reserve currency status is lost. This article is evidence that the world is moving in that direction, trusting gold more than the dollar. You'd be wise to pay attention from my perspective."

To read the blog in its entirety go to http://www.dennistubbergen.com and select his February 27, 2013 entry. His radio show interviews with weekly guest experts are available as podcasts at http://www.everythingfinancialradio.com

Tubbergen’s syndicated radio show can be heard on metro Michigan stations WTKG 1230 AM and WOOD Newsradio1300 AM and 106.9 FM.

Dennis Tubbergen has been in the financial industry for over 25 years and has his corporate offices in Grand Rapids, Michigan. Tubbergen is CEO of PLP Advisors, LLC and has an online blog that can be read at http://www.dennistubbergen.com. To view Tubbergen’s latest Moving Markets? newsletter, go to http://www.moving-markets.com.

The opinions expressed herein are those of the writer and not necessarily those of USA Wealth Management, LLC. This update may contain forward-looking statements, including, but not limited to, statements as to future events that involve various risks and uncertainties. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual events or results to differ materially from those that were forecasted. Therefore, no forecast should be construed as a guarantee. Prior to making any investment decision, individuals should consult a professional to determine the risks, costs, benefits and fees associated with a particular investment. Information obtained from third party resources is believed to be reliable but the accuracy cannot be guaranteed.