When 2014 began there was a lot of buzz in the air that major monetary system change would happen this year. In fact, this was the main reason this blog was started. To track events and see if things were about to rapidly change. As the year has moved along, most of the predictions made for major change this year have been missed. Change is happening for sure, but it is just a slow and steady change so far. So where does the "reset" stand as we near the end of 2014?
There have been rumors and expectations since the first of this year that big changes were about to happen. A January speech given by Christine Lagarde in Washington D.C. led to widespread speculation that she was using numerology references to signal big changes coming in 2014. All kinds of dates for this change were given ranging from early spring to July based on various interpretations of her comments.
But here we are at the end of October and there has been no major "reset" in the monetary system. IMF reforms that could lead to change have been stalled for years now. Anti EU and nationalist movements have gained strength in Europe. The US political environment has remained grid locked. Now that grid lock looks very likely to continue for at least another two years. Nothing suggests the IMF reforms are anywhere on the horizon right now.
The BRICS nations have surely moved forward with their own bank and China has continued to work on gettting the Yuan to replace the US dollar in trade agreements around the world. Russia and China have forged an alliance to try and offset western influence in the world. They have made progress but there has been no major change so far in the structure of the global financial system that would increase their influence within the existing western led institutions (IMF and World Bank).
Again, this year there have been many predictions that a major financial crisis was imminent that would lead to major and rapid change. Since I read hundreds of articles on all this monthly I see most of the predictions out there. I have seen many urgent predictions of one kind or another that "something big is about to happen" all year long. But so far those were all wrong.
What does all this mean? That no major change is coming? Because many dire predictions have been missed that we should dismiss the idea of another crisis altogether?
No, not at all. But we can learn from all this. We can learn that those who are constantly trying to predict timing on when change will happen simply don't know. They are speculating or guessing obviously. That is fine, but constantly forecasting that such and such will happen by a date certain leads to significant loss of credibility over time. We will not go down that road here.
On this blog we think a better approach is to gather facts, stay alert and informed, and track those who make forecasts and predictions over time. Those who hit on forecasts a higher % of the time deserve more credibility than those who don't in our view. That seems like a simple and logical way to follow events.
We don't have to provide proof that something is going to happen by some certain date in time. We have linked on the right side of this blog to warning after warning by the IMF and World Bank and other Central Banks that another financial crisis is possible. Beyond that, they state clearly that it could be a very severe crisis worse than in 2008. These are their warnings, not ours. And notice that no dates are given whatsoever. I did note that Christine Lagarde said recently she felt 2015 could be a "make or break year". We'll see.
Here is where we think things stand based on the 100's of articles and opinions we follow here and have read all year long. It is really just what Jim Rickards keeps saying. The system is unstable. EVERYONE agrees on that. Because it is unstable a major crisis event could unfold at any time. So it would be beyond foolish to just ignore that possibility. We think the financial authorities (IMF, World Bank, US Fed, other Central Banks) believe that they can manage things over time and avoid another major crisis even while warning we could have one. They really have no choice but to project that attitude to the public. Time will tell if they are right or not. It seems like by mid 2015 things should be clearer.
We have listed several ways change could come here on this blog. To quickly recap:
- slow and steady change over time leading to a more centralized system using the SDR and perhaps a global type of currency everyone might use eventually. It could be a virtual currency. Gold might return to the system in a new way eventually.
- a sudden major crisis event that leads to rapid response by the IMF and a move to the SDR more quickly. Jim Rickards basic forecast. Again gold might come into play.
- a slow and steady drifting apart of the BRICS nations from the IMF and World bank with two major economic regions (East vs. West) eventually competing for reserve currency status. This could take several years to unfold. Gold might return to the system in a new way here as well (either side could use it to stabliize their currencies).
- a sudden major crisis event that overwhelms the ability of the current system to control it and leads to a breakdown in the system. This leads to a de-centralized world where various local regions compete and attempt to rebuild. Gold and Silver probably become very important in a world like this. Trust in centralized government dissolves.
Of course we could also just see the present system limp along for several more years too. There is simply no way for anyone to know for sure how all this will turn out. We still think a reset will happen, but have no idea when or exactly how it will unfold. And we don't think anyone else does either. No one who has put out a date certain so far has been correct.
In a world like this, how do you respond?
Our view here is staying alert and informed is first priority. Next, for anyone who can, acquire some level of insurance to hedge against a worst case scenario (get some kind of hard assets that could survive a major financial system crash). Every person can assess what level of insurance best fits their needs. Make any other preparations you feel you need for your situation (emergency supplies, etc). Hope you never need them.
Having done the above, we suggest not spending time worrying about it all. Enjoy life. Try to help others around you when you can. Be thankful for the blessings in your life.
We will continue to follow this big story (potential major monetary system change) for as long as it takes to see how it turns out. If you don't have time to follow events, we will try to help out with that here as best we can. Thanks again to our readers from all over the world!