Beware This Crushing Stealth Tax

The Silent Thief Were you forwarded this email? [Sign-up to The Daily Reckoning here.]( [Unsubscribe]( [Daily Reckoning] Beware This Crushing Stealth Tax - The one tax that applies to everyone already and doesn’t require any legislation or court approval… - Desperate Venezuelans turn to gold… - Then Jim Rickards shows you why the way to a global currency is complicated… Recommended Link [Strange 2021 Prophecy Rapidly Coming True]( [Read more here...]( America’s #1 Futurist George Gilder is telling American’s to “brace yourself” for the coming $16.8 trillion revolution. This same revolution could redefine millions of jobs and radically transform the way just about every major corporation does business. It could even change the way you get paid, save and invest for retirement. And, says George, it could make you exceedingly rich... [Click Here To See Why]( Portsmouth, New Hampshire November 4, 2021 [Jim Rickards]Dear Reader, There's one tax that applies to everyone already and it doesn’t require any legislation or court approval. It’s the inflation tax. Inflation makes your money worth less. If you have any kind of fixed income such as bond interest, annuities, insurance payouts, defined benefit retirement plans or other income streams, you may receive the same amount in nominal dollars but they will be worth less in real terms because of the decline in purchasing power. That’s the inflation tax. It also applies to wages. If you get a 2% raise in salary but inflation is 5%, then your real income just went down by 3% even after the raise. That’s the inflation tax too. Inflation just hit a 30-year high. For the month of September 2021, inflation rose at an annual rate of 4.4%, the highest since 1991. Economists debate whether this recent rise in inflation is temporary or here to stay. I’ve argued that inflation is mostly temporary (in the short term, while in the long term we will see inflation). But it doesn’t matter. The point is inflation is here today and your purchasing power is going down. We’re not facing anything like hyperinflation in the short term. But once inflation becomes entrenched, it can be exceedingly difficult to stop. How bad could it get ultimately? You probably know about the German hyperinflation in the early 1920s. But for a modern example of hyperinflation, look at what's happening in Venezuela… It has just lopped off six zeros from its currency, the bolivar. The 1 million bolivar note was replaced by a new one bolivar note. The old 1 million bolivar note was worth $0.25. That’s now the exchange rate for one new bolivar. That represents a 100,000,000% devaluation of the bolivar disguised as a redenomination. Venezuela also did something similar just a few years ago. Now hyperinflation is being piled on hyperinflation to the point that the currency is practically worthless. Of course, Venezuelans know what’s going on. They’re the ones paying 7 million old bolivars for a loaf of bread (if they can find it). When things get this bad, citizens stop playing the government money game and start looking for alternative forms of money that retain value and are readily accepted. In Venezuela, the new form of money is also the oldest form of money — gold. Venezuelans are working in illegal gold mines and manage to scrape a few flakes of gold off their tools and mining equipment. These flakes are carried around in their pockets and are a trusted medium of exchange. Inflation in the U.S. may not be anything like inflation in Venezuela, let’s be clear. But, inflation is on the rise and the best hedge in the U.S. is the same as the best hedge in Venezuela — gold. It’s hopeless to expect the government to cut down on deficit spending or money printing anytime soon. Investors who are concerned about inflation have to resort to self-help. Besides gold, you should also consider silver, land, commodities and certain stocks in the energy and natural resource area. Don’t wait for inflation to eat your income alive. Now is the time to protect yourself against inflation with one or more of these traditional hedges. Below, I show you how elites are using the trojan horses of climate alarmism and the COVID pandemic to fast-track a single global currency. But it’s a complicated issue. What do I mean? Read on. Regards, Jim Rickards for The Daily Reckoning P.S. My colleague Marin Katusa has filled me in on a major disruption in the investment markets happening right now, as you read this: [The global race to Net Zero.]( The massive government spending taking place to react to climate change will irreversibly alter the investment landscape. The market’s next moves might shock investors, so I recommend that you position yourself now. [Click here]( to learn how to get your hands on a FREE report with all the details. Marin details how the moves you make today could be a once-in-a-generation opportunity for wealth creation. This is not a theory, or a market that could happen. Big Oil companies are looking to deploy billions now. As are many of America’s largest corporations in every single market. In this report, you’ll learn about: The “secret” commodity sector that has crushed Bitcoin, gold, the Nasdaq and the S&P by as much as 10X… How not one in 1,000 investors has heard of this sector… or has any idea how to invest. But Marin will reveal the full details — including a first-of-its-kind new way you can get in on it… How early investors could potentially make a fortune over the next decade… if you know how to position yourself (hint: This has nothing to do with solar power, wind power or any “green” investment you’ve ever heard of). [Click here now to learn how to get your FREE report holding all the urgent details.]( Recommended Link [World’s 1st Billionaire “Super Alliance” = 1 New Disruptive Technology]( [Read more here...]( The founder of Microsoft…the founder of Amazon…the founder of Virgin Galactic… Together, they’ve joined forces… And created a “super-alliance” of billionaire investors… To claim a ground floor stake in a new disruptive technology… That Bloomberg says will grow 12,100% over the coming years… And potentially overturn $100 trillion in economic assets. What do the ultra-rich know that everyday Americans like YOU don’t? [Click Here To Find Out]( The Daily Reckoning Presents: “Global elites see the COVID pandemic and climate alarm as a two-headed Trojan Horse that can be used to foist SDRs on a global population who have suddenly become accustomed to following government orders”… ****************************** Towards a Single World Currency By Jim Rickards [Jim Rickards]Is the move toward central bank digital currencies real? And, if so, is it the first step toward a global reserve currency that will replace the dollar and euro as currencies of choice in reserve positions of major economies? Well, yes and no. Before I expand on that answer and explain the impact central bank digital currencies will have on the more familiar world of foreign exchange, it’s helpful to say a bit more about what central bank digital currencies (CBDCs) are. CBDCs are not cryptocurrencies. The CBDCs are digital in form, are recorded on a ledger (maintained by a central bank or Finance Ministry), and the message traffic is encrypted. Still, the resemblance to cryptos ends there. The CBDC ledgers do not use blockchain, and CBDCs definitely do not embrace the decentralized issuance model hailed by the crypto crowd. CBDCs will be highly centralized and tightly controlled by central banks. CBDCs are not new currencies. They are the same currencies you already know (dollars, yuan, euros, yen, sterling) in a new form, using new payment channels. They are a technological advance, but they do not replace existing reserve currencies. That’s one reason the details of a roll-out of CBDCs will affect the currencies I analyze and recommend in my service [Tactical Currency Profits.]( CBDCs are currently being introduced by major central banks around the world. Countries are at different stages of deployment. China is the furthest along. They have a working prototype of a digital yuan that will be showcased at the Beijing Winter Olympics in February 2022. If you’re there and want to buy tickets, meals, souvenirs or pay for hotel rooms, you’ll be expected to pay with the new digital yuan using a mobile phone app or other digital payment channel. The European Central Bank has also moved quickly on a CBDC version of the euro. They are not yet at the prototype stage, but they have made material advances and are getting close to that stage. Japan and the U.S. are at the back of the line. The Fed has a research and development project underway with MIT to study how a digital dollar might intersect with or even replace the existing dollar payments system (which is already digitized, albeit without a centralized ledger). The U.S. is probably several years away from its own CBDC at best. So, yes, the move toward central bank digital currencies is real. How does this relate to what is sometimes called The Great Reset? This would be the movement toward a single global reserve currency. This movement would be nominally led by the International Monetary Fund acting as a kind of world central bank. Still, the IMF cannot make decisions of this magnitude without U.S. approval. (The U.S. has just enough voting power in the IMF to veto any material decisions it does not like). In turn, U.S. approval would require a global consensus among major economies including China, the UK, Germany, France, Italy, and other members of the G7 and G20. This desire to create true world money would involve the creation of a digital special drawing right (SDR). SDRs are issued by the IMF to member nations and may be issued to other multilateral institutions such as the United Nations. In effect, the IMF has a printing press as powerful as the Fed and ECB printing presses and can flood the world with their world money. Displacing the dollar would involve a meeting and agreement similar to the original Bretton Woods agreement of 1944. The agreement could take many forms. Still, the process would conform to what many call The Great Reset. Recommended Link [Discover How to Earn Real Estate Income from the Safety of Your Own Home]( [Read more here...]( Looking for a way to create real estate cash flow without having to leave your house? With over a dozen “lazy” real estate secrets ready for you to take advantage of today, this new book will help you discover how to earn monthly income from real estate from the comfort of your home… and without all the hassles of being a landlord. [Get Your Access Here]( This process has been underway since 1969 when the SDR was created. Several issues of SDRs were distributed between 1970 and 1981, then none were issued until 2009 in the aftermath of the Global Financial Crisis of 2008. A new issue was distributed earlier this year. Global elites see the COVID pandemic and climate alarm as a two-headed Trojan Horse that can be used to foist SDRs on a global population who have suddenly become accustomed to following government orders. The recent COP26 meeting of elite climate alarmists and heads of state in Glasgow highlighted the use of central bankers and financial regulation to push the alarmist agenda by cutting off lending and underwriting services to energy companies that don’t promote renewables or that pursue oil and gas exploration ([go here]( to learn all about a coming global climate tax, and also, how you can actually profit from it). So, yes, the trend toward a single world currency is real also. Still, things don’t happen that quickly in elite circles. Even Bretton Woods took over two years to design and another five years to implement even under the duress of World War II. The transition from sterling to the U.S. dollar as the leading reserve currency took thirty years from 1914 to 1944. As they say, it’s complicated. At one level, there is no immediate change. A CBDC dollar is still a dollar. A CBDC euro is still a euro. Absent a new Bretton Woods type fixed-exchange rate regime, these currencies would still fluctuate against each other. Our analyses would continue as before. Still, there are three huge changes that could emerge from The Great Reset. The first is that a new global currency regime would be an opportunity to devalue all major currencies in order to promote inflation and steal wealth from savers. All currencies cannot devalue against all other currencies at the same time; that’s a mathematical impossibility. Yet, all currencies could devalue simultaneously against gold. This could easily drive gold prices to $5,000 per ounce or much higher to achieve the desired inflation. EUR/USD might remain around $1.16, but both EUR and USD would be worth far less when measured by weight of gold. This would be an accelerated version of what happened in stages between 1925 and 1933, between 1971 and 1980, and again between 1999 and 2011. The second change would be that CBDCs make it much easier to impose negative interest rates, confiscations, and account freezes on some or all account holders. This can be used for simple policy purposes or as a tool of the total surveillance state. Surveillance of incorrect behavior as defined by the Communist Party is the real driver of the digital yuan more than any aspirations to a yuan reserve currency role. The third change would be the widespread issuance of SDRs and their adoption as the sole global reserve currency. A new Bretton Woods could force countries to hold 100% of their reserves in SDRs, and major corporations could be forced to maintain their books in SDRs. This could lead to a fixed-exchange rate regime with a peg based not on gold but on SDRs. All of these shifts are now underway. Whether they play out over years or mere months remains to be seen. Exact outcomes are uncertain. What is certain is that I will watch developments closely and keep you ahead of the power curve as the elites continue their push toward digital money, world money, and the end of cash. Regards, Jim Rickards for The Daily Reckoning P.S. My colleague Marin Katusa has filled me in on a major disruption in the investment markets happening right now, as you read this: [The global race to Net Zero.]( The massive government spending taking place to react to climate change will irreversibly alter the investment landscape. The market’s next moves might shock investors, so I recommend that you position yourself now. [Click here]( to learn how to get your hands on a FREE report with all the details. Marin details how the moves you make today could be a once-in-a-generation opportunity for wealth creation. This is not a theory, or a market that could happen. Big Oil companies are looking to deploy billions now. As are many of America’s largest corporations in every single market. In this report, you’ll learn about: The “secret” commodity sector that has crushed Bitcoin, gold, the Nasdaq and the S&P by as much as 10X… How not one in 1,000 investors has heard of this sector… or has any idea how to invest. But Marin will reveal the full details — including a first-of-its-kind new way you can get in on it… How early investors could potentially make a fortune over the next decade… if you know how to position yourself (hint: This has nothing to do with solar power, wind power or any “green” investment you’ve ever heard of). [Click here now to learn how to get your FREE report holding all the urgent details.]( --------------------------------------------------------------- Thank you for reading The Daily Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@dailyreckoning.com) [James Rickards][James G. Rickards]( is the editor of Strategic Intelligence. He is an American lawyer, economist, and investment banker with 35 years of experience working in capital markets on Wall Street. He is the author of The New York Times bestsellers Currency Wars and The Death of Money. Add feedback@dailyreckoning.com to your address book: [Whitelist us]( Additional Articles & Commentary: [Daily Reckoning Website]( Join the conversation! Follow us on social media: [Facebook]( [LinkedIn]( [Twitter]( [RSS Feed]( [YouTube]( The Daily Reckoning is committed to protecting and respecting your privacy. We do not rent or share your email address. By submitting your email address, you consent to Paradigm Press delivering daily email issues and advertisements. 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