Currencies

The Morgan Report's David Morgan discusses his outlook for the global markets, and you may find his outlook for the dollar quite surprising.

My guest today is David Morgan. He's mostly in the silver education business, but we're going to talk to him today about some other global markets and what's going on there. So, David, there are a lot of other things going on globally that people are paying attention to. Derivatives is one of them. What are your thoughts on where we're at here?

We're in unchartered waters. Never in the history of the world have we been on a [successful] fee-up money system. It's happened before, and when it has happened before, there have always been consequences.

I think we're seeing those consequences now. The euro is very unstable. I'm not even sure if Greece is going to maintain it. Maybe Germany, who is the strongest, might opt out. We just don't know.

So that uncertainty is pervasive throughout the entire global economic system and because of that, people strive for certainty in their lives. The only thing about life is that certainty has changed.

So the financial markets are changing and that's a reflection of everything that's going on in the physical economies. The West is basically contracting and the East is basically expanding, and there is going to be a lot of motion back and forth until there is stability back in the markets.

When we talk about the US dollar and the debt ceiling and how much debt we have, do you see a point where the US dollar is not the reserve currency anymore? Is it the yuan or it is the euro, or something else?

Absolutely, I see that. Already we know from factual evidence that China is trading with Russia, currency to currency. They're doing the same thing with India. Japan has gotten into the act as well. So the dollar is slowly getting sifted away. You're seeing gold for oil.

All of these things are sifting out the dollar as reserve currency, and it's going to continue, and you're going to find a basket of currencies. You might see a gold component. I really don't know. I'm not sure anyone knows it for a fact, but you're going to see the dollar end up not being the reserve currency of the world at some point.

OK, and so uncertainty probably brings us back to the precious metals. Are silver and gold still your favorites in terms of playing against uncertainty?

It is, because it's a touchstone that's shown to do the best during uncertain times. I believe this time is going to do that as well, and we have a ten-year track record that bears that out.

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