Commodity Trade Mantra

Posts Tagged ‘Dollar Reserves’

Will the US Dollar Die as "New World Money" Goes Live Today? Should I Buy Gold?

Today, Sept. 30, is when the IMF officially adds the Chinese yuan to its basket of currencies comprising its special drawing right (SDR). It has enormous long-term implications for the dollar. Does that mean the dollar becomes worthless overnight? Of course not. This is a development with long-term implications, and that’s the point — the dollar will die — but with a whimper, not a bang.

Why is the Whole Pie Shrinking? Well - It's Recession Time

We are picking up signals from a source even more powerful than central banks. This source is the specter of global recession. One of the other signals is the shrinkage in world trade. You can have a reduced trade deficit but still find that exports and imports are both shrinking. It means the global trading economy is shrinking: a sure sign of recession.

Gold - It Is The Only Sound Money There Is

Measured in gold, it is the price of the dollar falling that makes sense of what is happening. Gold’s purchasing power is considerably more stable than that of paper currencies over the long term. We do not have to make guesses over gold’s future purchasing power. The future price of gold depends on what happens to the purchasing power of the paper currencies in which it is measured.

Russia's Dollar De-Dollarization May Have Begun

Russia has plans to raise $1 billion in government debt next year with bonds denominated in Chinese renminbi. Not the US dollar! Uh-Oh. the de-dollarization is taking off. So what if Russia denominates their bonds (that used to be issued in dollars) in renminbi & vice versa with Chinese issued bonds? This eliminates the need to hold large sums of dollar reserves.

The Key to Understanding China's Devaluation Against the Dollar

By decoupling from the dollar now, China is sending a message that it may be prepared to let it fall later. This means that when the dollar starts to fall in earnest, China may not be there to catch it. This will also mean that the biggest foreign buyer of Treasury bonds will likely be unwilling to provide help when the U.S. needs China’s help the most.

Voices Grow Louder To End Reserve Status Of The US Dollar

“What was once a privilege is now a burden, undermining job growth, pumping up budget and trade deficits and inflating financial bubbles.” Jared Bernstein urged that, “To get the American economy on track, the government needs to drop its commitment to maintaining the dollar’s reserve-currency status.”

Rise of the Petro-Yuan & the Slow Erosion of Dollar Hegemony

Linking the dollar to international oil trading was key to creating a new version of dollar primacy (“dollar hegemony 2.0”) & by extension, in financing another forty years of American hegemony. With the rise of the “petroyuan,” movement towards a less dollar-centric currency regime in international energy markets is already underway.

Peak Gold Is Here to Stay - Oliver Gross

The wave of zero-interest liquidity washing over the financial world could result in a short-term gold bottom of $1,000. I like to invest when there is blood in the streets & that is certainly happening with precious metal equities. Today, investors can buy gold and silver stocks at decade-low valuations & historically low bullion-to-equity valuations.

One World, One Bank, One Currency

After QE to infinity since 2008, printing another $3 trillion+ won’t be politically feasible. The specter of sovereign debt crisis suggests urgency for new liquidity sources, bigger than those that central banks can provide, the next time a liquidity crisis strikes. The logic leads from one world to one bank to one currency for the planet.

Six Myths About Money and Inflation

Its a myth that increasing aggregate demand through increasing the money supply will lead to more spending, higher employment, increased production & a higher overall standard of living. Here are 6 of the most prevalent economic myths about money & inflation that appear time and again in the mainstream media.

The Safest Investments in a Dangerous World Market

You need both the wood & the spark to have the fire of inflation. US Fed & other central banks have printed trillions of dollars of money in the past four years. So far, inflation has been relatively tame. The printed money is only the wood; a spark is still required. Events in the Middle East, Ukraine and China today may provide the spark.

The Rise of the Petroyuan and the Slow Erosion of Dollar Hegemony

For the last 40 years, a pillar of dollar primacy has been the greenback’s dominant role in international energy markets. Today, China is leveraging its rise as an economic power & as the most important incremental market for hydrocarbon exporters in the Persian Gulf & the former Soviet Union to circumscribe dollar dominance in global energy.

BRICS Announce $100 Billion Reserve To Bypass Fed, Developed World Central Banks

The anti-dollar alliance – BRICS has successfully created the BRICS Bank with India as the first President, a so-called mini-IMF as part of a system of measures that would help prevent the harassment of countries that do not agree with some foreign policy decisions made by the US & their allies.Simply put, it’s game over for the dollar.

Internationalization Renminbi Requires Increase In Gold Reserves

China has a great interest to support the renminbi with gold, having an x amount of tonnes at the PBOC, to give their currency trust and credibility. A gold backed renminbi is completely unrealistic at this point because the renminbi is still in it’s infancy – capital controls need to be lifted, full convertibility needs to implemented, etc.

Russia May Retaliate Sanctions By Demanding Payment For Exports In Gold

The EU agreed on a framework yesterday for its first sanctions on Russia since the Cold War. In retaliation to sanctions, Russia could opt to only accept gold bullion for payment for their gas, oil and other commodity exports. This would likely lead to a sharp fall in the dollar and a surge in gold prices.

Emerging Markets, Interest Rates and Tapering

Having added unprecedented amounts of liquidity into its own economy through QE, the Fed is now reducing the pace of its expansion of narrow money. This is bad news for emerging market countries, who will surely conclude that international monetary co-operation has broken down.

Miners Should Launch a Gold Cartel or Risk Losing Everything

What is there left to lose for the deeply depressed gold mining industry but to take revolutionary steps and to fight back? – Its time to get their act together before banks force them to hedge and sell forward their business for peanuts, rendering them incapable of benefiting from rising prices in the future.

An Open Letter To The World Gold Council - Eric Sprott

While demand for physical gold remains extremely strong, prices on the COMEX have fallen precipitously. This contradictory situation is an important obstacle to a healthy gold mining industry – Supply & demand imbalance is not reflected on misleading statistics.

Gold and Silver - Off To The Races Once More

Gold has a very strong outlook as it heads toward the last quarter of the year. Physical demand is traditionally very good in the fall season, which will bolster the already astounding demand statistics for 2013.

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