As 2015 comes to a close it's probably a good time to review things and ask where we stand in terms of major monetary system change that might be coming. That is what this blog was created to watch for and we have had many sign posts along the way that at times seemed to indicate we may be on the verge of some major changes.
But as time has marched on things are still about the same as they have been and no major monetary system change has happened yet. Below let's review some events that we have covered and then see where things might be headed in the future.
(Note: I will leave this article up at the top of the blog the rest of this year and be back after the New Year with new articles)--------------------------------------------------------------------------------------------------------
The 2008 Financial Crisis - This is probably the biggest event that has happened recently that seemed to be pointing towards potential major changes. The whole financial system was shaken pretty soundly and some reports said the US got very close to a complete shut down of the banking system. The response was to try and stave off the crisis with massive stimulus programs. Both the US government (remember TARP) and the US Fed geared things up beyond historic levels to try and keep the system afloat. Whether this has been successful is still a hot debate today. Some will say that the actions taken by the US managed to stabilize the system well enough that we avoided a collapse and now we have had several years of relative stability. Critics dismiss this and say only ongoing money creation and interest rate suppression programs are keeping the system afloat. They see a still unstable system where at any time things could go south in a hurry. I don't claim to know the truth. What I try to do here is find good relevant information sources and report as best I can a range of credible views. I try to stick with those who support their view with facts and sound logic as best I can determine. I will just continue on that path. Personally, I view the system as reasonably stable for now, but also believe that the conditions that could lead to another major crisis are still out there. This has been stated in many public warnings by both the IMF and the BIS (Bank for International Settlements) which we have documented here for readers (a page viewed by tens of thousand of readers from all over the world I will add).
Ongoing Issues at the IMF (2010 reforms and SDR Currency Basket) - These are topics I feel have been covered here on the blog as well as any publication out there. We have followed every twist and turn in the effort to get the 2010 IMF reform package passed. Congress finally quietly approved the reforms in the recent spending bill. We were early last year to define the decision about whether or not to add the yuan to the SDR currency basket as being important to potential monetary system change. Now that these two things have happened, we won't see major changes right now. But these moves do lay the groundwork for bigger changes to take place. The biggest question is what the pace of the change will be. Quickly in response to another crisis or more gradually over many years in small increments? Time will tell. One thing for sure is that whatever major changes do come to the global monetary system are most likely going to originate at the IMF, The World Bank and at the BIS. We will continue to monitor all those institutions for that reason. The BRICS are important as well and we will continue to follow their activities.
What happened to "the great reset?" - This is a reasonable question to ask. When this blog started, the media (both mainstream and alternative) was buzzing with speculation that a major reset of the global monetary system was about to take place. It's a big reason we created the blog. We wanted to provide a service to the public in case a major change impacting their daily lives did happen. So far, no reset has happened and most of the talk about one has died down. Does that mean we will not have one? I don't know. I have learned that trying to predict the future (let alone the timing of a future event) is pretty much a futile endeavor. What we do know is that the conditions that could lead to such an event still exist. My sources indicate that within the system there is a general feeling that the system has been stabilized well enough to avoid a sudden major change event. However, none of us can possibly foresee what will happen in the future. All it takes is one major unexpected event to quickly change things. I'll use this example even though the odds of this happening are very low. Suppose a major solar flare erupted and it was powerful enough to disrupt the global satellites and electric infrastructure grid on earth. The one that the present financial system relies on today. Clearly no one could foresee something like that coming. It could even happen if geo-political conflict heated up and a major power used the weapons available today (electromagnetic pulse) that can disrupt communications and grid systems. Is that likely? Probably not, but you tell me if you think it's impossible for our grid to be disrupted. There are many other events that could lead to a major financial system upset, so assuming it can't happen is both naive and foolish in my opinion. As one example, major powers are constantly accusing each other of cyber attacks. Jim Rickards and other credible analysts believe their models suggest that such an event (an unexpected event leading to crisis) absolutely will happen with only the timing as the unknown.
Could things just slog along without much major change? - Yes they could. So far that is exactly what has happened. If that is what happens then I believe we will see the kinds of changes we have written about here take place over many years and perhaps even decades. Some day we might see the SDR used at the IMF replace the US dollar as the leading global reserve currency. We might see the IMF rules changed so that the SDR could become a "real SDR" as proposed by Dr. Warren Coats which we have covered here. We could even see a digital version of this global currency that everyone could own and use for transactions alongside their national currency. Will we? I don't know. What I do know is that the technology to do all this already exists and is available. Whether the powers that be will choose that path or how the world would accept it are unknown to me. But we have covered it all here and readers here should not be surprised at whatever might develop in the future on this topic.
What Should We Do to Prepare for an Uncertain Future? - This is actually an easier question to deal with. There are common sense things we can do including:
-Stay informed so that if events leading to major change appear you can recognize them and not be taken by surprise or shocked
- Make some common sense preparations to be prepared in case the financial system were to be disrupted for ANY reason. There are many reasons why it could be, even though it may not happen any time soon. Look at it like you would your home or car. You take some common sense precautions to insure those in case of an unexpected event. You hope you don't need the insurance, but you are glad you have some and sleep better because you do.
-Don't let anyone use fear tactics on you. While there are legitimate reasons to be concerned about financial system stability, living in constant fear of it is no solution. Also, fear can be used to get people to make poor decisions regarding their personal financial situation. Don't ever make a major financial decision based on fear. Make it on facts using sound logic.
-Develop a network of family and friends you can rely to pitch in and help if an emergency ever does arise in your life. This might be your best friends, your co-workers, your church, etc. One heartwarming thing I see over and over while doing research for this blog is how most people will pitch in to try and help in a crisis. Never forget that there is a huge resource of people who mostly want to try and help out if they can. It's a hidden asset around us that often gets overlooked.
-for those who want to delve into this topic further, Jim Sinclair has put together this check list of ideas to be prepared for an emergency situation should you encounter one. This is one of the best articles I have seen from Jim on this topic because it offers practical ideas for the average person. An emergency can arise unexpectedly at any time as we just learned here in the Dallas area.
I hope all readers have had a great 2015 and can look forward to a great 2016. I don't know what the future will bring, but I will continue to try and provide good information to help with staying informed as best I can. There are some readers here who really help me out in that regard even though they prefer to stay out of the public eye. Jim Rickards and others try their best to help and will answer any questions I have for them even though that takes valuable time to do. I appreciate the help I get from all these sources.
Best Wishes as we head in 2016!
note: We will back with new articles after January 1st.