CHAPTER 11

The Beginning of the End for the Dollar

I talk a lot about the coming collapse of the international mon-
etary system. It sounds a provocative, maybe even apocalyptic,
but it’s not meant to be. The international monetary system
actually has collapsed three times in the past 100 years.
It collapsed in 1914 when the classical international gold
standard was abandoned. It collapsed again in 1939 when
something called the gold exchange standard was abandoned.
And then it collapsed in 1971 when President Nixon abandoned
the convertibility of dollars into gold. That’s three collapses in
100 years. They happen about every 30 or 40 years and it’s
been about 40 years since the last one.
That doesn’t mean the system is going to collapse tomor-
row morning like clockwork. It does suggest, however, that the
useful life of the international monetary system, if you will,
is about 30 or 40 years. We’re at the end of that period so we
shouldn’t be surprised if it collapses again.
I do make the point that when these collapses occur it’s
not the end of the world. It doesn’t mean that we all go live
in caves and eat canned goods. What it does mean is that the
major financial trading powers of the world sit down around a
table and they rewrite what are called the “rules of the game.”
So far, I’ve laid out a four crisis scenarios thus far including:
financial warfare, inflation, deflation and collapse. But there