If the U.S. dollar is being devalued so rapidly, then why does it sometimes increase in value against other global currencies? Well, it is because everybody is recklessly printing money now. The 6 charts which you are about to see below prove this. The truth is that it is not just the U.S. Federal Reserve which has been printing money like there is no tomorrow. Out of control money printing has also been happening in the UK, in the EU, in Japan, in China and in India. There are times when one particular global currency will fall faster than the others, but the reality is that they are all being rapidly devalued. Unfortunately, this is a recipe for a global economic nightmare.

Right now you can almost smell the panic as it rises in global financial markets. Investors all over the world are racing to get out of paper and to get into hard assets. Just about anything that is "real" and "tangible" is hot right now. Gold hit a record high last year and it is on the rise again. In fact, it just hit a new five-week high. Demand for silver is becoming absolutely ridiculous right now. Oil is marching up towards $100 a barrel again. Agricultural commodities have exploded in price over the past year. Many investors are even gobbling up art and other collectibles.

Paper money is no longer considered to be safe. All over the globe investors are watching all of the reckless money printing that has been going on and they are becoming alarmed. An increasing number of investors and financial institutions are putting their wealth into hard assets that are real and tangible in an effort to preserve their wealth.

The other day, a reader of this column named James sent me some charts that he had put together. I thought they were so good that I asked him if I could include them in an article. These charts show how central banks all over the globe have been recklessly printing money. Over the last 30 years virtually the entire world has developed a great love affair with fiat currency....

So is everyone printing money?

The U.S. is printing lots of money.....

Source, The St. Louis Fed

The Bank of England is printing lots of money.....

Source: The BoE

The EU is printing lots of money....

Source: The ECB

Japan is printing lots of money.....

Source: The BoJ

China is printing lots of money.....

Source: The People’s Bank of China

India is printing lots of money.....

Source: Reserve Bank of India

Of course anyone with half a brain can see where all of this is ultimately headed. In the end, inflation is going to spiral out of control and we are going to witness financial implosion on a global scale.

So why don't these nations just adopt sound money?

Well, it turns out that if you are a member of the IMF, you are specifically prohibited from having gold-backed currency.

Yes, you read that correctly.

In fact, U.S. Representative Ron Paul once sent an open letter to the U.S. Treasury and the Federal Reserve asking about this and he received no response. The following is the content of that letter....

Dear Sirs: I am writing regarding Article 4, Section 2b of the International Monetary Fund (IMF)'s Articles of Agreement. As you may be aware, this language prohibits countries who are members of the IMF from linking their currency to gold. Thus, the IMF is forbidding countries suffering from an erratic monetary policy from adopting the most effective means of stabilizing their currency. This policy could delay a country's recovery from an economic crisis and retard economic growth, thus furthering economic and political instability. I would greatly appreciate an explanation from both the Treasury and the Federal Reserve of the reasons the United States has continued to acquiesce in this misguided policy. Please contact Mr. Norman Singleton, my legislative director, if you require any further information regarding this request. Thank you for your cooperation in this matter. Ron Paul

U.S. House of Representatives

Sadly, the truth is that the global elite don't want nations to start adopting gold-backed currencies. They want countries to use fiat currencies that they can openly manipulate for their own benefit.

At this point, every nation on earth (to the best of my knowledge) uses a fiat currency. All of the major global currencies are being continually devalued. In fact, there are times when counties will purposely devalue their currencies even more rapidly in order to gain a competitive advantage in world trade.

This is why so many investors now have such an aversion to paper currency. It starts losing value the moment you take possession of it.

In some areas of the world, "gold fever" is absolutely exploding. For example, China imported five times as much gold in 2010 as it did in 2009. On the Shanghai Gold Exchange, trading volume soared 43 percent during the first 10 months of 2010.

Gold, silver and other precious metals are now seen as a great hedge against inflation worldwide. Investors all over the globe are demonstrating a strong preference for "real money" over "paper money".

So what does all of this mean?

It means that some tremendous imbalances are being built up in the global financial system. The central banks of the world must continue to inflate these bubbles with constantly increasing amounts of paper money and debt in order to keep the game going. If at some point the reckless money printing comes to a screeching halt it is going to unleash hell on global financial markets.

But if all of this reckless money printing continues we are eventually going to see horrific inflation all over the planet. In fact, we are already seeing significant inflation happening in many areas of the globe. Almost every single day a new headline about inflation in China seems to pop up in the financial news. Rising food prices are sparking unrest in the Middle East and elsewhere. Even U.S. consumers are starting to see some uncomfortable price increases at the gas pump and in the supermarket.

So it is not just Federal Reserve Chairman Ben Bernanke that is off his rocker. The whole world is going crazy with money printing.

Hopefully this whole thing is not going to end as badly as many of us fear that it will. But right now the central banks of the world are pumping unprecedented amounts of cash into the global financial system, and those in the global financial system are funneling a very large percentage of that cash into hard assets. Unless something changes, that is going to mean that prices for basic necessities such as food and gas are going to continue to rise.

This is quite a fine mess that we are in.

Does anyone see a way out?

This post was published at the author's blog >