Friday, August 17, 2012

Triffin's Dilemma, 
Currencies & Gold
Jim Rickards (AA) was recently in Australia & met up with the Australian Daily Reckoning group for a strategy session .. They believe chaos is a likely outcome of what is happening to the global economy .. when a system of international finance comes to an end, it goes through a chaotic period before another system emerges .. references Triffin's Dilemma, named after the U.S. economist Robert Triffin - the dilemma is that the objectives of managing a domestic currency run contrary to the objectives of an international reserve asset .. LINK HERE to learn more about the dilemma from an article we posted in the past .. paraphrasing Rickards: "The elites who run the system are from the old, debt soaked industrial powers, and they'll do anything to keep their hold on power. This is why having IMF SDRs as a reserve currency is probably more realistic than you may think .. The other option Rickards came up with was gold as the replacement for the U.S. dollar .. It can just evolve organically. If each participant in this economic system, large or small, realizes that a portion of their wealth is best protected by the physical ownership of gold, then gold will automatically assume a major role to play in the new financial system."

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