Margaret writes today on a topic we have received numerous inquiry's on: how will I be affected by the dollar's collapse if I live in Canada?
Hi Doc, I am hoping you can give me some information on what to do to prepare for devaluing of the USD or hyperinflation of the USD, if living in Canada. As our Canadian currency is backed by USD, does that put us in the same boat with regards to "preparing" as U.S. citizens ?
I have been preparing along the same lines as I would be if I lived in the U.S. My most agonizing question would be, if you were a Canadian citizen would you be pulling your money out of your "Registered Retirement Savings Plan" and converting it into gold and silver ?
I really need some advice as there is no one up here in Canada that I can find, that is giving any!
Thank you in advance.
Margaret,
We cannot legally give you any advice regarding your registered retirement savings plan, we are not licensed investment advisers. We can however tell you how we expect a dollar collapse to go down, and let you make your own informed decision regarding your assets and financial security.
Our Canadian readers are in a slightly better position than our American readers when it comes to the collapse of the US dollar, but they will likely be largely impacted by either a dollar devaluation or hyperinflationary episode. As you have mentioned regarding your Canadian currency, any US dollar reserves would be rendered effectively worthless by a US dollar collapse. Hyperinflation would have an enormous impact on the 'just in time' delivery supply chain throughout the US and Canada. The US is obviously Canada's main trade partner. Goods will still be available, but the currency system used for purchase/trade of goods and services will be severely disrupted. (for example..oranges, grapefruit, strawberries, etc are shipped from Florida and California- this supply is not likely to be replaced by British Columbia or The Yukon Territory). This supply chain of goods will almost instantaneously break down during a currency collapse when no one wants or trust the US dollar.
Further, our suspicion is that the contagion of the panic will go beyond the US dollar and take down other fiat currencies including the euro and possibly the Canadian dollar. Any fiat currency that is not gold or silver is at risk.
As far as to what The Doc would do in regards to retirement funds- The Doc personally does not contribute a single fiat cotton dollar note to his 7% employer match 401k fund (yes, The Doc has a day job, adsense brings in about $10 a day...about enough to keep the lights on). We fully expect all federal employee, pension, 401k, and IRA funds to be confiscated by the feds and forced into treasury bills before all is said and done. Will this happen in Canada as well? We don't have a crystal ball, but its possible.
We will say that confiscation of IRA, 401k, and pension funds as well as nationalization of gold and silver mining companies is EXPONENTIALLY more likely than confiscation of physical gold or silver from US or Canadian citizens as was attempted by Roosevelt in the 1930's. Why? Because the Average Joe American (and to a large extent Canadian) does not hold a single bloody ounce of gold or silver. It would be completely pointless to attempt a door to door confiscation of an asset that the general public does not own, and most of those who do own it are also gun owners. These gold and silver bugs are likely to protect their hard currency like they would their daughter's virginity- sure you can take my gold and silver- over my dead body! Sorry, not gonna happen, the elite are too smart for this.
It will be MUCH easier to make a simple declaration (executive order) and instantly nationalize the gold and silver of all mining companies as "strategic assets" or some other BS. The same goes for pensions, 401k's, and IRA's.
Even if a confiscation of retirement accounts never occurs in either the US or Canada, The Doc believes physical gold and silver will be a FAR better investment than Apple, Amazon, LinkedIn, Treasury bonds, muni bonds, or whatever the heck your employer puts your retirement assets into.
By the time the gold and silver bull has run its course, current gold and silver prices will resemble the appearance of cars on the highway viewed from cruising altitude of 30,000 ft. You can't go wrong with physical gold and silver.
Our advice for Canadian readers: listen to Margaret and prepare as if you lived in the US. You won't be unscathed by a US dollar collapse or hyperinflation. We don't see Eric Sprott sitting in Canadian dollars now, do we?
-The Doc
