I guess we're all doomed, eh?
www.businessandleadership.com
BY NOMI PRINS, EDITOR, ROGUE ECONOMICS
On August 15, 1971, then-President Richard Nixon had no choice. He had to give a speech on a brewing crisis. He called it “The Challenge of Peace.” Its objective was to sell the American people on a lie.
On that day, Nixon devalued the savings and earning power of every American. It’s the day he broke the dollar’s tie to gold.
It only took 18 minutes. It was a masterpiece. Almost no one noticed what was happening.
During the speech, Nixon talked about soldiers in Vietnam unable to find work after returning home from “success” during the war.
Then, he talked about inflation. For the five years prior, the Consumer Price Index (CPI) rose 6% per year. Nixon promised to break that trend. He promised the average American they could get by.
About halfway through, he finally got to his real reason for speaking. He said, “Let me lay to rest the bugaboo of what is called devaluation.”
He knew what was about to happen to the average American’s wealth. He just didn’t want anyone else to figure it out.
So Nixon blamed the problem on a group of “international money speculators.” He told his audience they were responsible for raising prices on everyday goods. They kept veterans from finding work. But it was all a lie.
The truth was, the U.S. bungled its incredible power as the world’s go-to currency. The gold in Fort Knox gave it that power. But the government abused that position by running persistent budget deficits.
In 1945, the U.S. had 60% of the world’s official gold reserves. By the time of Nixon’s speech, that gold hoard was 63% smaller. Foreign countries had been buying gold.
Nixon didn’t have a choice if the U.S. wanted to keep running deficits relative to other nations. So he had to cut the dollar’s tie to gold.
Luckily for Nixon, most people don’t understand how currencies work. They also didn’t know about Wall Street’s role in cheering on the severing of gold to the dollar. That’s how Nixon was able to get away with saying “evil speculators” relentlessly attacked the dollar. Even though Wall Street was speculating as well.
But the truth is U.S. deficit spending hit a level so extreme, foreign governments lost confidence in the dollar. So they rushed to grab as much U.S. gold as they could instead.
The value of the U.S. dollar fell hard. The chart on the next page shows what this looked like at the time.
The impact was brutal. Inflation ran rampant over the next decade. At its height, inflation would hit 14.5% in 1980. That was compounded by oil price spikes.
Today, we’re seeing similar events play out. Inflation spiked last year. It hit a rate of 9.1%, the highest level in 41 years. As I write, it’s still running at 5%, far higher than the Federal Reserve’s 2% target rate.
The slowdown in the rate of inflation in the money supply is mainly due to the Fed’s relentless rate hike campaign. Over the past year, it raised its benchmark Federal Funds rate – the rate at which banks are able to borrow from the Fed – from 0.25% to 5.25%. It’s the fastest pace of rate hikes in history.
However, this policy has created some unintended consequences. For instance, we’ve seen several bank failures so far this year. The most notable being Silicon Valley Bank.
As the turmoil spreads throughout the financial system, the Fed will have to create more and more money. In fact, it already created more than $300 billion in the blink of an eye to help Silicon Valley Bank and other banks.
The good news is, there are steps you can take to protect and grow your wealth in this new era, in which the Fed will create more money from thin air.
See, the greatest wealth transfers usually happen during periods of turmoil. That’s why the next decade may end up being the greatest wealth transfer in American history.
Get it wrong and you might destroy your wealth. Get it right and you’ll not only survive, but you’ll thrive. And there’s a lot at stake.
But before I get to that, let me tell you a bit about myself… And why my experience can help you during this pivotal time.
FROM WALL STREET INSIDER
TO WHISTLEBLOWER
My name is Nomi Prins. I’m an investigative journalist, author, and advisor on economic and financial matters globally. For decades, I’ve gone down every rabbit hole to follow the money on Wall Street and in Washington…
I’ve traveled tens of thousands of miles… from Berlin to Shanghai… from Sao Paulo to Tokyo…
All to get the pulse of the global economy and what it means to ordinary people and their money. I’ve met with government leaders and financial movers and shakers… all while writing seven books on economics, history, the stock market, and Wall Street.
But once, I was a Wall Street insider.
I got my start as an analyst at the Chase Manhattan Bank when I was 19. I rose quickly through the ranks there. And I went on to hold senior positions with Lehman Brothers and Bear Stearns London.
Then in 2000, Goldman Sachs recruited me to be a managing director at their global headquarters in New York. I had a coveted corner office on the 29th floor. And I was raking in a seven-figure salary.
But Wall Street, not a bastion of morality to start with, was changing… for the worse.
I saw a growing gap between what Wall Street wanted for itself and what was good for its clients. Some of its clients were major companies. But many were average Main Street folks.
I was fighting losing battles against Wall Street greed. Then, something happened that altered my life’s trajectory…
MY FIGHT TO TELL THE TRUTH
My office was just blocks away from the World Trade Center. On 9/11, United Airlines flight 175 passed right by my window. It was the second plane.
The days that unfolded were chaotic for us all. But here’s what stuck with me the most…
Hank Paulson, then-Goldman Sachs Chairman and CEO, left a message on our internal voicemail. He said the “people of Goldman Sachs” had a duty to return to their workplaces.
But I felt differently. Instead, I spent days at the 69th Regiment Armory on Lexington Avenue. There, I helped people comb through lists of artifacts to find anything that belonged to their loved ones.
I realized life was too short to waste time.
Over the weeks that followed, I knew I had another calling – to shed light on the shadiness of Wall Street and corporate America.
Much to the chagrin of my mother, I quit my job at Goldman. I gave up potential millions of dollars in compensation in order to freely tell the truth.
And since I left Wall Street, I have done just that.
For years, I dug into the elite connections that shaped corporate favoritism… and the scandals that resulted.
And I warned of the calamity that would befall the financial system due to the house of cards Wall Street had created.
In fact, I forecast the 2008 financial crisis four years before it happened… And I wrote about exactly how and why it would unfold.
I published my first book about this in 2004, just two years after leaving Wall Street. It’s called Other People’s Money: The Corporate Mugging of America.
In it, I warned that the “next bull market’s bust will be even more devastating than the last one.” And I wrote this about the activities of big banks and insurance companies, such as AIG: "A brewing area of conflict of interest at the supermarket banks is their use of credit derivatives… The picture will only worsen when [insurers] start admitting their losses… which they are not obligated to disclose during their fall, but only when they hit bottom."
Four years later, these activities led to the $13 trillion mega-bank bailouts during the 2008 financial crisis – which were just the beginning.
I was one of the few insiders who dared to expose this exclusive global banking framework. And I wasn’t afraid to talk about it.
I did interviews on TV and radio. I spoke to audiences of students and politicians. I wrote numerous newspaper articles and books on the subject.
But nobody listened… Until the crisis hit. Then, my phone didn’t stop ringing. Interview and speaking requests came fast and furious.
Since then, I’ve made it my mission to shed light on the moral rot at the core of Wall Street and the shadiness of corporate America. I’ve exposed…
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Nomi Prins Exposed: Dollar Endgame - BUSINESS & LEADERSHIP
Nomi Prins is known for exposing the deep-seated connections between America’s most corrupt officials and the Federal Reserve - the Dollar Endgame.
www.businessandleadership.com
BY NOMI PRINS, EDITOR, ROGUE ECONOMICS
On August 15, 1971, then-President Richard Nixon had no choice. He had to give a speech on a brewing crisis. He called it “The Challenge of Peace.” Its objective was to sell the American people on a lie.
On that day, Nixon devalued the savings and earning power of every American. It’s the day he broke the dollar’s tie to gold.
It only took 18 minutes. It was a masterpiece. Almost no one noticed what was happening.
During the speech, Nixon talked about soldiers in Vietnam unable to find work after returning home from “success” during the war.
Then, he talked about inflation. For the five years prior, the Consumer Price Index (CPI) rose 6% per year. Nixon promised to break that trend. He promised the average American they could get by.
About halfway through, he finally got to his real reason for speaking. He said, “Let me lay to rest the bugaboo of what is called devaluation.”
He knew what was about to happen to the average American’s wealth. He just didn’t want anyone else to figure it out.
So Nixon blamed the problem on a group of “international money speculators.” He told his audience they were responsible for raising prices on everyday goods. They kept veterans from finding work. But it was all a lie.
The truth was, the U.S. bungled its incredible power as the world’s go-to currency. The gold in Fort Knox gave it that power. But the government abused that position by running persistent budget deficits.
In 1945, the U.S. had 60% of the world’s official gold reserves. By the time of Nixon’s speech, that gold hoard was 63% smaller. Foreign countries had been buying gold.
Nixon didn’t have a choice if the U.S. wanted to keep running deficits relative to other nations. So he had to cut the dollar’s tie to gold.
Luckily for Nixon, most people don’t understand how currencies work. They also didn’t know about Wall Street’s role in cheering on the severing of gold to the dollar. That’s how Nixon was able to get away with saying “evil speculators” relentlessly attacked the dollar. Even though Wall Street was speculating as well.
But the truth is U.S. deficit spending hit a level so extreme, foreign governments lost confidence in the dollar. So they rushed to grab as much U.S. gold as they could instead.
The value of the U.S. dollar fell hard. The chart on the next page shows what this looked like at the time.
The impact was brutal. Inflation ran rampant over the next decade. At its height, inflation would hit 14.5% in 1980. That was compounded by oil price spikes.
Today, we’re seeing similar events play out. Inflation spiked last year. It hit a rate of 9.1%, the highest level in 41 years. As I write, it’s still running at 5%, far higher than the Federal Reserve’s 2% target rate.
The slowdown in the rate of inflation in the money supply is mainly due to the Fed’s relentless rate hike campaign. Over the past year, it raised its benchmark Federal Funds rate – the rate at which banks are able to borrow from the Fed – from 0.25% to 5.25%. It’s the fastest pace of rate hikes in history.
However, this policy has created some unintended consequences. For instance, we’ve seen several bank failures so far this year. The most notable being Silicon Valley Bank.
As the turmoil spreads throughout the financial system, the Fed will have to create more and more money. In fact, it already created more than $300 billion in the blink of an eye to help Silicon Valley Bank and other banks.
The good news is, there are steps you can take to protect and grow your wealth in this new era, in which the Fed will create more money from thin air.
See, the greatest wealth transfers usually happen during periods of turmoil. That’s why the next decade may end up being the greatest wealth transfer in American history.
Get it wrong and you might destroy your wealth. Get it right and you’ll not only survive, but you’ll thrive. And there’s a lot at stake.
But before I get to that, let me tell you a bit about myself… And why my experience can help you during this pivotal time.
FROM WALL STREET INSIDER
TO WHISTLEBLOWER
My name is Nomi Prins. I’m an investigative journalist, author, and advisor on economic and financial matters globally. For decades, I’ve gone down every rabbit hole to follow the money on Wall Street and in Washington…
I’ve traveled tens of thousands of miles… from Berlin to Shanghai… from Sao Paulo to Tokyo…
All to get the pulse of the global economy and what it means to ordinary people and their money. I’ve met with government leaders and financial movers and shakers… all while writing seven books on economics, history, the stock market, and Wall Street.
But once, I was a Wall Street insider.
I got my start as an analyst at the Chase Manhattan Bank when I was 19. I rose quickly through the ranks there. And I went on to hold senior positions with Lehman Brothers and Bear Stearns London.
Then in 2000, Goldman Sachs recruited me to be a managing director at their global headquarters in New York. I had a coveted corner office on the 29th floor. And I was raking in a seven-figure salary.
But Wall Street, not a bastion of morality to start with, was changing… for the worse.
I saw a growing gap between what Wall Street wanted for itself and what was good for its clients. Some of its clients were major companies. But many were average Main Street folks.
I was fighting losing battles against Wall Street greed. Then, something happened that altered my life’s trajectory…
MY FIGHT TO TELL THE TRUTH
My office was just blocks away from the World Trade Center. On 9/11, United Airlines flight 175 passed right by my window. It was the second plane.
The days that unfolded were chaotic for us all. But here’s what stuck with me the most…
Hank Paulson, then-Goldman Sachs Chairman and CEO, left a message on our internal voicemail. He said the “people of Goldman Sachs” had a duty to return to their workplaces.
But I felt differently. Instead, I spent days at the 69th Regiment Armory on Lexington Avenue. There, I helped people comb through lists of artifacts to find anything that belonged to their loved ones.
I realized life was too short to waste time.
Over the weeks that followed, I knew I had another calling – to shed light on the shadiness of Wall Street and corporate America.
Much to the chagrin of my mother, I quit my job at Goldman. I gave up potential millions of dollars in compensation in order to freely tell the truth.
And since I left Wall Street, I have done just that.
For years, I dug into the elite connections that shaped corporate favoritism… and the scandals that resulted.
And I warned of the calamity that would befall the financial system due to the house of cards Wall Street had created.
In fact, I forecast the 2008 financial crisis four years before it happened… And I wrote about exactly how and why it would unfold.
I published my first book about this in 2004, just two years after leaving Wall Street. It’s called Other People’s Money: The Corporate Mugging of America.
In it, I warned that the “next bull market’s bust will be even more devastating than the last one.” And I wrote this about the activities of big banks and insurance companies, such as AIG: "A brewing area of conflict of interest at the supermarket banks is their use of credit derivatives… The picture will only worsen when [insurers] start admitting their losses… which they are not obligated to disclose during their fall, but only when they hit bottom."
Four years later, these activities led to the $13 trillion mega-bank bailouts during the 2008 financial crisis – which were just the beginning.
I was one of the few insiders who dared to expose this exclusive global banking framework. And I wasn’t afraid to talk about it.
I did interviews on TV and radio. I spoke to audiences of students and politicians. I wrote numerous newspaper articles and books on the subject.
But nobody listened… Until the crisis hit. Then, my phone didn’t stop ringing. Interview and speaking requests came fast and furious.
Since then, I’ve made it my mission to shed light on the moral rot at the core of Wall Street and the shadiness of corporate America. I’ve exposed…
- How the too-big-to-fail banks that got bailed out during the financial crisis had the tightest top-level government connections. And the most help from the Federal Reserve. There was a pattern…
- The blood, money, and power relationships between Wall Street banking dynasties and American presidents throughout the 20th century. These connections still impact our lives today…
- I even filed Freedom of Information Act requests. I did this to uncover information at the Clinton and other libraries. I wanted to get to the bottom of how those banking-political relationships impacted ordinary people.
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