The Little Book of the Shrinking Dollar: What You Can Do to Protect Your Money Now

What the Dollar’s Day of Reckoning Will Look Like

Peter Cooper reckons that the dollar’s day of reckoning is not going to come until the Eurozone is past its crisis. How long will that take is one question. Will the Eurozone bring the rest of the world down with it in a financial crash? “George Soros certainly thinks so,” he admits.

Judging the central banks’ abilities to respond, “printing money seems all they can do,” Peter suggests. “They all fear the deflationary liquidationist policy of the 1930s and will do anything rather than that.”

So he predicts a more extreme version of the 1970s: “a burst of much higher inflation with supermarket trolleys and gas bills hit hard.” He also envisions a total bond market bust, as interest rates climb higher out of necessity.

Such a bond climate dooms U.S. domestic policy. The U.S. will then have no alternative but to cut its public spending. The facility to pay for it with borrowed money will be gone. Asset prices will first deflate sharply but then begin to rise again as money from the Fed finds its way into the system.

Eventually the system will be righted with the debt burden eroded by inflation and debt paydowns, and the always latent entrepreneurial genius of the U.S. people will begin to surface with the pressure on the public and not the private sector.

In 30 years’ time will the dollar be the global reserve currency? “We think it will survive,” Peter declares “because of the absence of a competitor.” He does acknowledge that currencies ...