'US gold reserves value is $6,000 per ounce'

The U.S. dollar has reigned as the world's reserve currency for more than 60 years. That's a real anomaly in the history of paper money, according to Stansberry & Associates Investment Research founder Porter Stansberry, but the dollar's days on the throne are numbered. With a sea-change in the monetary system on the horizon—and drawing ever-nearer as more and more U.S. creditors turn toward hard assets and away from paper dollars—he tells The Gold Report in this exclusive interview that the world is approaching a return to "at least a de facto gold standard." Porter does not recommend bullion as "insurance" (because that suggests hope for the dollar when there is nothing to pin hope on) but rather as "the perfect natural money."


The Gold Report: As someone who invests in many sectors, Porter, what major trends are you watching in the global economy?
The major trend is a switch in central banks' recycling of dollars. As you know, the United States has been a net debtor to the world each year since 1976, I believe. We've put a huge amount of dollars out into the world and those dollars have to be recycled in some way.

Up to this point, central banks have been buying mostly U.S. Treasuries. Over about the last 10 years they organized so-called sovereign wealth funds (SWFs) and have been buying trophy properties mostly, but also some operating U.S. businesses as a way to recycle those dollars. The most interesting thing I've seen in a very long time is that suddenly some central banks have decided to begin to exit the dollar system by using trade surpluses to buy gold instead of either U.S. Treasuries or U.S. assets. I happen to believe that this is a sea-change in the gold and monetary system that will ultimately result in a return to at least a de facto gold standard.

I know my view is pretty far outside the mainstream, but historically, paper monies don't last. Our paper money, which has been exclusively a paper system—not backed by any precious metals since 1971—is getting long in the tooth and U.S. creditors are beginning to seriously doubt its sustainability. At some point, they will say, "This is ridiculous. We're not going to let you pay us back in dollars that you print. We're going to dump our Treasuries and buy gold because you can't print it." Gold has always been the stable basis of money and credit because it's very difficult to produce and it's timeless. It isn't consumed, it doesn't rust. An ounce of gold mined 10,000 years ago is very likely still in circulation today.

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