Comments on: Getting ready for the dollar’s fall Thu, 21 Jul 2016 07:57:19 +0000 hourly 1 By: Bill Jencks Tue, 10 Nov 2009 03:59:46 +0000 I keep reading articles like this which still seem to use the same old tired arguments concerning dollar status. This is very disappointing. A possible look at the real prevailing strategies used by China and other creditor nations easily reveals that the dollar has many enemies:

* According to a MarketWatch article, China has pulled all her gold bullion holdings from London and is moving them to a new high Security location near the airport in Hong Kong. This may be China’s own attempt to start her own bullion market in the Far East. This action also clearly restricts and damages the London Bullion Market’s gold leasing capabilities. The Gulf States have also done the same.

*China kicked off issuing her own Treasuries on Sept 28 of this year. These bonds are a direct competitor to US Treasuries.

*The Chinese govt is now discreetly buying gold from her own gold mines after suddenly becoming the largest producer of gold in the world.

*The Chinese people can now buy as much gold and silver as they like — all 1.3 billion of them. This is being heavily promoted by the Chinese govt.

*The Chinese govt is slowly buying gold on th markets. Every time the uS govt dumps dollars onto the gold markets, China just buys gold safely in the dips with her dollars. Therefore, the US has lost control of the gold price and has therefore lost control over dollar value. The Chinese are now in control of the greenback.

* China appears to be returning to a partial gold standard. If China controls the gold markets as well as backs her Yuan with gold, the strength and stability of the Yuan will be untouchable and unassailable when compared to other world fiat currencies.

*China’s own sovereign wealth fund — China Investment Corporation(CIC) — has spread its investments out rapidly and very effectively, investing around the world mainly in extractive commodity industries. The CIC has alot of weight to throw around — $300 billion — and, amongst others, has been investing heavily in the oil and precious metals markets. Effectively, China’s CIC fund is dumping dollars for gold and other more worthy hard asset investments now.

*It appears that other world central banks have also begun buying gold now, as a hedge against the China gold plays.

*Recently, in an UK Independent article called “The Demise of the Dollar”, the countries of China, Russia, France and the Gulf states all openly announced that they would be dumping the petro-dollar for the euro. Iran will also be doing the same.

In terms of economics and the markets — particularly pertaining to the adverse affects on the dollar — these are certainly not trivial economic events.

If the author would bother to actually research what’s really going on with the dollar, she could perhaps put 2+2 together and form a believable opinion. I’m not saying that all this will happen quickly, all I’m saying is that the dollar is well on its fading way, and will probably end up, after some years, as merely a regional currency amongst equals as opposed to being the top dog currency.

By: Nasdaq7 Thu, 27 Aug 2009 18:30:10 +0000 I’m thinking that a Japanese type scenario is still possible: with the US trying to inflate itself for decades! Yes decades out of debt and deflation. I struggle to see that any US president will allow retail sales to slump – to such an extent that it will take away the excess in the US economy: $2 trn. of junk companies.

I feel the US is heading the same way as Japan: right into a debt trap. Now what happened to the Japanese currency? It was traded up and down by currency speculators. Yet its value never recovered. And neither could the Japanese show consistent growth or a persistent rising stock market. I think this is possible. Very possible. Much like someone that is in heavily in debt, yet only survives from month to month. With spending spikes now and then.

By: Hour glass Mon, 24 Aug 2009 10:14:05 +0000 Excellent accounting, short and sweet ! Does that include foreign GDP ? Also, please no supra-currency, only consolidated time-zoned currencies! Now we need to cap all arguments with Purchase Power Parity

By: Hmmm Sun, 23 Aug 2009 15:29:02 +0000 2008 World nations by nominal GDP (USD millions):

Japan: 4,840,000

China: 4,200,000

India: 1,237,000

Germany: 3,820,000
France: 2,978,000
England: 2,787,000
Italy: 2,399,000
Spain: 1,683,000
-Total- 10,967,000

USA: 14,330,000

The Yuan as a reserve currancy? Pffff.

By: CG Sat, 22 Aug 2009 20:53:50 +0000 Look at the gold chart and you all will see there is no debate as to the direction of the monetary markets. Then realize the convergence I’m seeing right now.

Here is the chart: 090819weeklytriangle.gif

If a chart on ANY other sector looked like that, then every trader/investor in the universe who knows how to look at a chart would be jumping all over it. But Gold is still not the focus of the masses nor on financial TV. Nor in the Wall Street (tool of the puppet masters)Journal. IMO, hockey moms and joe sixpack still have no clue. I don’t think for one second that these are the people who cleared out all the gold/silver dealers. These people do not run Cash4Gold. I’ve even seen ads to buy your used cell phones, etc. FOR THE METAL CONTENT. How much of the metals can be in each phone? I mean, really, those in the know are desperate to take in as much precious metal content as humanly possible.

Now for the convergence part.

What we have is: Chart/Mindset/Time Frame/USD dilution

A: Chart- An astronomical inverse H&S

B: Chart- What looks like a double bottoms @875 and @930 after the inverse H&S. These are rising double bottoms.

C: Mindset- The big boys are surely focused on it but making sure the masses are not.

D: Time Frame- What time of year is it??? Historically, what do precious metals do in June/July? Yup, they make a low. What do they do in September? That’s right, they rise. What do they do from September through December? Uh huh, they form a peak. In the last nine years, this is what they have done almost without fail. I would say that if this chart formation was happening in Feb/March, then highly likely to break down. This is not Feb/March.

E: USD, there’s more of it. Gold, there’s less of it. And that trend continues.

A convergence of these facts point to higher, not lower POG and related investments. This is not to say that an intervention of some sort in the markets could not destroy the scenario. This we don’t know. Until then, I suggest investing on the facts as laid out above with, as always, a safety net.

As a side note, don’t believe for ONE SECOND that China will not dominate. He who has the biggest pile of cash wins. Guess who that is? The old timers and Fox News devotees will not see it coming. The thought of the US dropping to 2nd or 3rd in the world is beyond their comprehension even though the facts are right in front of us. China has the US by the Cajones as we speak. The US has not gone head to head with a major country since WWII. It can not and will not attempt direct conflict with China or Russia. Just check out the last side show. Iraq. A country that was incapable of getting one jet fighter off the ground when it was invaded by a country it did not attack. A band of relatively poor Muslims are succeeding in dragging the US into conflicts that it cannot win. It succeeded in attacking the US on it’s own soil using no more than patience, airline tickets and a knowledge that the US was too lazy to be prepared. Four airliners go off course for more than 30 minutes and no scramble by the US military to intercept. The Brits and Israelis have had armor plated and locked cockpit doors for decades. If the US had had this preventative measure in place, the hijackings would never had occurred. Why rehash this stuff? Because these are signs of a country in a downward spiral, not signs of strength. I sadly say this as a US citizen, but reality must be faced and I must admit the US has dug it’s own hole. End of rant.

By: europo americo Sat, 22 Aug 2009 15:43:33 +0000 This article is the formost idiotic one i ever read. Or is it that Agnes Crane is being paid by the cartel( i mean the FED)? USA FED(the cartel of fiat money,quoting Chuk from the daily pfennig)was given until november to get straight with the money printing or else. BRIC nations gave the dead line. Listen folks, do not pay attetion of what you hear from the so called “economist” or “commentators”. Just look around and see what is going on. People loosing their jobs, loosing their houses, cars; how many States are failing?, who is getting fat bonuses?, cash for clunkers is a fraud, all goverment statistics are murky. The fact is that the FED is printing money like crazy that is why the world is mad at. And also You should be prepared for what is comming. Banks are secretly buying gold, Central banks of the world are buying it also. For average people like me, silver is just fine. Read honest economist like CHUCK BUTTLER in the “daily Pfennig”, or Bill Bonner in the “daily reckoning”. Howard katz “the goldbug” or at least the “mogambo guru”.

By: Sergey Fri, 21 Aug 2009 13:10:01 +0000 There is no other currency as liquid and flexible as USD.
EUR don’t come close to USD neither in volumes nor in variety of credit and hedging products. In reality EUR only backed by Germany and somewhat France while it supports the long list of weak/small economies in Europe etc.

Yen is weak because Japan already borrowed well over 100% GDP.

China yuan is not free trade currency and lack any financial infrastructure.

Russia also don’t float RUB and it is as stable as price of barrel of oil. Russia has oil only for next 7-15 yrs.

Unfortunately for US there is no alternative to USD.

But I don’t see that status World Currency gives USD give US any benefits.

1. It doesn’t give US more borrowing power. UK, EU are able to borrow as much as US if measure in % from GDP

2. When US GOV bailed AIG it bailed all AIG client including wast number of foreigners clients.

3. Huge number of US bonds overseas make US economy very sensitive to foreign manipulations. China black mails US.

Today US carries responsibility to stabilize World monetary system rather than World helping US with economical trouble.

I love to see IMF rushing to help US to stabilize USD.
US would get huge credit of IME (‘International monetary equivalent’) at little or no interest while everybody else struggle maintain IME and IMF afloat.

But it doesn’t work this way. Many countries owns tons of products from Freddie and Fannie…
US nationalized AIG, Freddie Mac and Fannie May effectively stabilizing number of foreign governments.

US once more saved the World and nobody said thanks.

Lets move back to Gold standard or forward to ‘International monetary equivalent’.

By: InSightful Fri, 21 Aug 2009 12:58:10 +0000 Interesting, very interesting indeed.

By: Zuma Fri, 21 Aug 2009 10:54:44 +0000 If people cant trust the U.S. Govt, how can they possibly have trust and confidence in its currency?

By: Trader Duke Fri, 21 Aug 2009 07:05:45 +0000 Good morning from THE Banana Republic, where women are men and men are women. First of all, thanks for the laugh Haresh and Auroraebelle64. Refreshing in these impending doom times. I forgot about the Middle East currency ? Brian is correct about my ignorance, what is the difference between a standard, a reserve currency and a dominating currency ? Where does platinum feature ? Bananas ? I am sure the US is heavily invested all over the World. Who balances the World books ? The god of green ticks ?