Financial reality is about to come crashing down upon you. So, make ready. Before I get into what major change is about to disrupt your dream life, I have a word of WARNING:

This is a perfect time for you to go speak with a certified, legitimate, financial planner or analyst to protect whatever savings and wealth you have accumulated. The financial waters out there is about to get choppy and possibly erupt into a gigantic hurricane of devastating proportions.

So, what is going on that causes me to write this Nugget to raise red flags and trigger warning sirens?

In short, until now, the USA had a near monopoly on the currency used for international trade. Globally, whenever any country wanted to buy or sell its goods to another, those countries pretty much had to use the USA dollar. But, since people hate monopolies and will do everything in their power to flee the constraints imposed by a monopoly, the world has been anxious for an economic powerhouse to challenge USA dollar dominance.

The world welcomed CHINA by shipping their best manufacturing jobs and technologies to China. Now, China has become a global economic powerhouse and is ready to go blow for blow with the USA for dollar dominance. China is ready to break the USA global dollar monopoly.

On October 1, 2016, CHINA’s dollar is officially being added to the SDR, (Special Drawing Rights), at the IMF, (International Monetary Fund).

The USA dollar was the primary currency that HAD TO BE USED by every country in the world. An important component of that forced use of USA dollars for trade, was the global banking mechanism that chained countries to using USA dollars : the SWIFT system. At one time, denying a country access to the SWIFT system was the USA’s way of crippling that country’s economy. Because every country in the world has to use the USA dollar for buying or selling, and because there is only one system to clear those USA-dollar denominated trades, the SWIFT system, countries were forced to buy and keep huge reserves and floats of USA dollars on hand.  This DEMAND for USA dollars, in turn, made the USA dollar the “strongest” dollar on earth, and, thereby, the SAFEST place to invest one’s wealth.

On October 1, CHINA’s dollar will become an acceptable currency for international trade by becoming one of the five official currencies of the SDR. That alone is significant news. But even bigger news: China has been prototyping, tweaking, and perfecting  a competitor to the SWIFT financial exchange system. A double whammy to the USA dollar hegemony.

The new Chinese currency exchange system will make it now possible to work around the SWIFT system.

So, as of Oct 1, 2016, the world, in principle, no longer NEEDS the USA-dominated SWIFT financial exchange system, nor the USA Dollar itself. This also suggests that the USA’s power to impose sanctions and punish countries such as Russia or North Korea is also substantially weakened.

Once the Chinese dollar is made an official component of the SDR and backed by China’s financial clearing systems, countries will LIKELY begin stocking up on Chinese dollars and trying to quickly dump USA dollars. What’s the USA to do?  It will have to offer much higher interest rates, and consistently raise those rates frequently to encourage people and countries to buy and hold USA Treasuries and USA Bonds. But the Euro, Yen, and Pound Sterling will each have to do the same!

This implies a race to the top in interest rates. Something that is the polar opposite to what has been happening up to now. Up to now, countries have tried to make their currencies less expensive than other countries and thereby make their exports, what little exports they are able to make and ship, less expensive than competing countries. We’ve been in a currency war of sorts, a race to the bottom. But that will soon change.

Once the world is awash in currencies which will be dumped in favour of the Chinese dollar, countries will have to compete with each other to save the value of their own currencies by driving up their interest rates high enough to attract attention of other countries’ central banks.

Do you recognise what this suggests?

I’m suggesting to get ready for rampant INFLATION.

When interest rates go soaring upwards as countries try to stem the flood of each of their own currencies, so does the cost of everything you need and which you consume. Mortgage rates will go stratospheric.

  • Think mortgage rates of 30%, 40%,  or more.
  • Credit cards at 30% interest will seem like a bargain.
  • You happy with a credit line? Well get ready for credit line’s “Prime rate” of 30% or more.
  • Everything will nearly double in costs, too.
  • Gas at the pumps? Think $12.00 to $15.00 a gallon.

And that is why it is imperative for you to find and engage a certified financial planner or certified financial analyst…NOW.

ANOTHER ACTION PLAN, if you can manage it: GET OUT OF DEBT AS SOON AS POSSIBLE.

Oh, and there is one more global economic change that is taking place that will have HUGE consequences for YOU.

In December, 2016, China is going to be granted the privilege and protections enjoyed by other official members of the WTO, (World Trade Organisation). Member countries trading with each other are prohibited from imposing barriers to “free trade” such as duties and taxes. And, with China’s focus on their new strategy to become the dominant robotic and automated manufacturing center of the world, no other country is going to be able to compete with China. China is becoming the clear economic global winner.

In other words, if you are frightened because of the loss of economic power and the loss of jobs to China so far, you ain’t seen nothing yet!