How I learned a 36-year-old financial secret over breakfast at Raffles Hotel.
Dear reader,
My name is Gary Scott. I’m not clairvoyant…I have no special powers.
But I do know a clear economic signal when it hits me over the head…and a big one hit me during a trip to the Far East on May 5, 1971.
I was having breakfast at Singapore’s historic Raffles Hotel…one of the perks of being a successful young financial hotshot selling US securities overseas.
I was good at my job. I was confident, relaxed, and completely in command (I thought) of the economic principles I used in my business.
One of those principles was that the US dollar was the rock-solid benchmark currency of the world.
In those days, the dollar was backed by a dependable relationship with something real…gold. Like the sun rising each morning, the world knew exactly what a dollar would be worth from day-to-day.
Over breakfast on Raffles’ terrace that morning in 1971, I opened the Singapore Straits Times and discovered that my world…everybody’s world…had changed in the time it took to read a three-word headline.
“US Dollar Devalues.”
The unthinkable had happened. America had severed the long-standing link between the dollar and gold.
For the first time in decades, no one knew how much a dollar was really worth.
International currencies markets convulsed.
Broke…With A Pocketful of Dollars
Back then, I traveled with nothing but US dollars. All Americans did. The world wasn’t yet run by credit cards. Until that fateful day in May, you could go anywhere in the world with nothing but dollars in your pocket. They were, literally, as good as gold.
In the wink of an eye, all that changed.
I found myself in the most famous hotel in Singapore with a wad of US dollars…unable to pay my hotel bill. I couldn’t even pay for breakfast! No one would take my dollars…not even the money changers would touch them.
I was terrified. In the time it took to eat breakfast, I’d gone from being a successful international businessman to being a penniless beggar thousands of miles from home.
By that evening, the newly unhinged dollar finally found a temporary value on world currency markets, and I was able to pay my bills.
But I’ve always remembered the lesson I learned that day, stranded in the most historic hotel in Singapore, my pockets stuffed with dollars as worthless as scrap paper.
The lesson was simple…never again trust the US dollar, or any other single currency.
The Simple Truth No US Stock Adviser Wants You To Know
That lesson has served me well for three and a half decades, because since that day, the value of the dollar has been spiraling steadily downward.
And that’s a fact that no American money manager or investment adviser wants you to know…since becoming unhinged from gold, the dollar has been losing value faster than safe and reasonable dollar investments can cover.
Even if you’d started 36 years ago with a portfolio of dependable, low-risk, value-oriented investments earning six percent a year in dollars, you’d lose buying power.
That’s right…36 years of rock-solid six percent annual returns on dollar-denominated investments would leave you in the hole!
That’s because in the past 36 years the dollar has lost 75% of its real value against other major currencies.
Can you imagine any investment adviser selling US investments in US dollars telling that to their clients?