In the mid-1960s, under the leadership of President Lyndon B. Johnson, the U.S. government went on an incredible spending spree.
Between 1960 and 1965, spending tripled from $40.9 billion to $122.7 billion, largely due to the Vietnam War.
Johnson also launched his Great Society initiative during the decade.
It was an ambitious series of legislation and programs with the goal of ending poverty, reducing crime, abolishing inequality, and improving the environment.
In total, the U.S. spent $120 billion fighting the war in Indochina, or about $1 trillion in today’s dollars.
Many Great Society programs such as Medicare live on today over 50 years later, with an estimated total running cost of over $16 trillion.
But in the 1960s, the U.S. dollar was still pegged to gold. That meant other nations could redeem their dollar reserves for gold.
And that’s exactly what happened…
With government spending getting out of control, countries began to dump the U.S. dollar and exchange it for gold, which nations have always viewed as a stable store of value.
By 1965, France started to convert its dollar holdings into gold, and the country moved it out of the vault of the New York Federal Reserve. Others followed suit.
To stop the bleeding, President Richard Nixon announced a radical change in 1971.
Without giving any warning to the American people, the president went on live TV and took the dollar off the gold standard in what’s now known as the Nixon Shock.
Here’s how he justified that unprecedented move:
We must protect the position of the American dollar as the pillar of monetary stability around the world.
Nixon said he acted to protect the American people. In reality, we know this new dollar regime would eventually give the government the power to print unlimited amounts of money.
After 1971, the U.S. dollar became a fiat currency. And the Federal Reserve was free to print money willy-nilly, without worrying about any gold reserves.
Most people didn’t understand what was happening. And it caught them by surprise.
The result?
Inflation crushed U.S. consumers in the 1970s. Their purchasing power collapsed. And since then, the dollar has lost 87% of its value.
Here’s another way of looking at it…
It takes about $7.82 in today’s money to purchase the same amount of goods and services a single dollar would have bought you back in 1970.
In other words, most Americans became poorer under the new U.S. dollar regime.
Friends, we’re about to witness history repeat itself…
A new trend is developing that will undermine the dollar’s status as the world’s reserve currency.
The De-Dollarization Trend
Most countries use dollars to transact in global trade because it’s the world’s reserve currency. For that reason, central banks must hold dollars in reserve.
This has been the case since the Bretton Woods Agreement of 1944, which established the dollar as the world’s main reserve currency.
That agreement was a game-changer because it created guaranteed demand for the U.S. dollar. It’s a big reason why America became a superpower.
The problem is that the U.S. government has been abusing that privilege for decades now. Our debt has exploded, especially in the last two decades.
As you can see in the chart above, U.S. debt is nearly $32 trillion… That’s about $94,000 per citizen.
And as if that wasn’t enough, in February 2022 the Biden administration took things to a whole new level by weaponizing the U.S. dollar.
To punish Russia for its invasion of Ukraine, the U.S. froze all the dollar reserves of Russia’s central bank. That was $630 billion.
The rest of the world watched that unprecedented move and started thinking, “Wait a second. If the U.S. can do that to a nuclear power like Russia, it can do that to anyone.”
That’s why an increasing number of nations in Asia, Europe, and Latin America have recently announced plans to dump the U.S. dollar as their sole reserve currency… and instead trade in their own local currencies.
For example, China and Russia have normally used U.S. dollars to buy products from each other. But just this past year, the volume of trades using their own currencies has increased by 8,000%.
The finance ministers of the Association of Southeast Asian Nations – including Indonesia, Thailand, the Philippines, Singapore, and Vietnam – recently met behind closed doors, and they also decided to move away from the U.S. dollar.
And look at Saudi Arabia. For the past 48 years, it’s only accepted U.S. dollars in exchange for the oil it sells to nations. But now, Saudi Arabia says it’s considering trading in currencies besides the U.S. dollar.
The Bloomberg headline – “Suddenly Everyone Is Hunting for Alternatives to the U.S. Dollar” – says it all.
The U.S. dollar’s share of world reserve currencies has decreased from 73% in 2001 to 47% this year – the lowest level ever.
Most Americans don’t realize this is a huge deal. Thanks to its status as the world’s No. 1 reserve currency, there’s always been a lot of demand for the U.S. dollar.
That’s the only reason why our government has been able to spend money like drunken sailors… without having to worry about any consequences.
It’s a huge advantage that literally gave us our standard of living.
So the fact that nations around the world are now dumping the U.S. dollar at a pace faster than the previous two decades is a huge crisis.
A New Playbook for the Dollar Crisis
I believe the simplest and most effective way to prepare for the new dollar regime is to buy bitcoin.
It’s a deflationary asset, so you can’t indiscriminately print more into existence. And no central authority can tamper with it.
But owning bitcoin isn’t the only way to escape the digital dollar regime… Gold will be another escape hatch.
That’s why I put together a new playbook to show you how to protect yourself – and potentially profit – from the new dollar crisis. It includes:
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Step-by-step instructions to securely buy and store your bitcoin.
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The name of a crypto project also set to profit from this trend.
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And a secret way to 10x your money on gold.
Click here to learn more.
In tomorrow’s Daily, I’ll tell you why I believe the new dollar regime could come as early as July 26. So stay tuned for that…
Or you can click here to immediately watch my full briefing on the coming dollar regime and why you need to prepare before July 26.
Let the Game Come to You!
Big T