Commodity Trade Mantra

Posts Tagged ‘Reserve Currency’

Gold And Silver Prices Crash Despite Financial Instability & Political Turmoil

Despite the negative bond yield environment, political turmoil in a number of countries, a tumultuous US presidential election campaign & uncertainty in the aftermath of the Brexit vote, gold and silver prices plummeted. Not to mention the current fragility of the global financial system. Now is the time to buy assets physical gold and silver that offer a meaningful hedge against such a scenario.

Gold Investment - The Cornerstone of a Well-Constructed Portfolio

John Embry highlights the pressures that have brought fiat currency to the brink, U.S. debt liabilities to staggering heights, and gold back to the institutional investor’s crosshairs. A must for anyone seeking to fully understand the state of the global economy and its implications for gold and silver, and why gold remains a cornerstone of a well-constructed portfolio today.

Case for Owning Real Money - Gold and Silver Outside the Banking System

We’re in a situation on a global basis we’ve never been in before, which is that the reserve currency of the world is failing, which means you need something outside of the system. You need something that’s not electronic-based, has no counterparty risk, that’s universally recognized & of high value that could be used anytime, anywhere by anyone. That of course is gold and silver.

China’s Monetary Ascension Is Paved with Gold

When the Chinese yuan becomes an SDR currency, that could be the inflection point for a new multi-polar currency regime that sees the US dollar decline in stature. Could gold also begin to emerge as a leading currency in world trade? Over time, it certainly could. But the more immediate implications for gold’s monetary role center on its increasing accumulation by central banks such as China’s.

The SDR Is Designed As A Rescue Operation For The US Dollar

The IMF created the SDR Substitution Account in 1969. T he core idea is that the SDR Substitution Account Central Banks allows to diversify their existing US dollar reserves in a one-time conversion away from the dollar into IMF’s SDR, comprised of the US dollar, European euro, Japanese yen and British pound, in an off-market transaction, so as not to depress the dollar’s exchange rate.

Buying Gold and Silver? Better a Year Too Soon Than a Day Too Late

If the elites are so focused on preserving their fiat Ponzi scheme & so intent on wrecking the gold and silver markets, you can be 100% assured that acquiring both, gold and silver or either is the smartest move one can make to escape the certainty of the Western world financial calamity that is destined to follow. Better a year too soon than a day too late. Stay vigilant in being prepared.

End of an Era: The Rise and Fall of the Petrodollar System

Similar to the paradigm shift – the transition to the petrodollar system that followed with the collapse of the Bretton Woods system, there is another major shift underway today. We will know its consequences in full, the day oil-producing countries demand gold for their oil, instead of dollars. The Gulf states are seeking measures to reduce their dependence & exposure to the US dollar.

Watch How The Petrodollar Di(v)es As US - Saudi Relations Crack

U.S.-Saudi interests are diverging in many ways. Saudi Arabia’s 40-year pact with the United States is on the verge of ending. What happens next will have ramifications for the dollar for decades to come. We could be nearing the end of the petrodollar & I would not want to be holding U.S. Treasuries. With current interest rates I don’t want to hold them anyway.

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.

Marc Faber on Cashless Society Insanity & Why Wall Street Hates Gold

Basically, everybody – the media, the government and the financial sector – detests and hates gold because it’s honest. You cannot print it and double the supply of gold overnight. They want to move into cashless society so they can control you. If they introduce a cashless society, I think it’s going to be very likely that the government will try to take the gold away from you.

Crude Oil Bust Could End The US Dollar Domination

With Bretton Woods’collapse in 1971, oil became its new saviour and kingmaker as the U.S. dollar became the prime currency for crude oil transactions. The current strength of the U.S. dollar shouldn’t be taken for granted. Although a viable alternative to the U.S. dollar has yet to be found, the petro-dollar is vulnerable in the long-term, and perhaps even in the medium-term.

Gold And Silver Buying – "Why" Is More Important Than "When"

Those who choose to measure the utility of owning gold and silver in terms of price alone have lost a sense of their true utility. Do not be disappointed that gold and silver are not going higher, for now. This has nothing to do with the why of buying and holding physical gold and silver. In the end, the why is considerably more important than the when, and when does not mean “if”.

Is the Federal Reserve Finally Being Forced to Consider Main Street?

How can the Federal Reserve help Main Street? The conventional wisdom is that zero-interest rates help Main Street by lowering the cost of borrowing. Zero-interest rates incentivize speculation, not investment & have also stripped savers of billions of dollars in interest. They can lower the cost of commodities & goods by strengthening the U.S. dollar via raising rates.

Can the US Dollar Face Down the Chinese Yuan?

The decision to include the Chinese yuan in the SDR is a political decision, not an economic one. Including the Chinese yuan is a “seal of approval” by the world’s major financial powers, led by the United States. It means China is a financial superpower and deserves a seat at the table when the international monetary system is reset.

Gold, Oil, & 'Grandmaster' Putin's Trap

It is important to keep in mind that the dollar’s attacks on gold end always end the same way – in a painful knockout for the dollar. It would be naive to believe that this is unknown to that grandmaster of patience, Vladimir Putin. By systematically increasing their gold reserves, Russia and China are relentlessly moving forward to strip the US dollar of its status as a global reserve currency.

Decline of the US Dollar – The Consequences

We cannot blame China and India, or Russia if they wish to protect themselves from western systemic risk by shifting their trade settlements away from the dollar. It is becoming clear to Asian leaders at least that the dollar’s reserve status is an anachronism of the past & cannot last, a simple deduction that raises important questions not addressed for over a century.

There Are Significant Risks To Goldman's Forecast For Gold Price Weakness

Goldman admitted that while its “base case is still for higher US real interest rates, lower gold”, it may be wrong adding that “while our base case remains for higher US real rates and lower gold prices, there are significant risks that our forecast for gold price weakness is pushed out, should the Fed surprise us and remain on hold in December.”

Gold is Money - But Where Does This Leave Silver?

No doubt the principal focus will always be on gold as the ultimate metallic money, but the temptation to overlook silver’s monetary credentials is a mistake. Arguably, it could even have a greater claim than gold to be the people’s money, because for all of commercial history it has been more widely circulating for that mundane purpose.

Life In A Cashless World: How Cash Became A Policy Tool

The people now intensively working on a mechanism for a cashless society are building it around the concept of blockchain technology. In essence, there would be a single ledger that records each expenditure or revenue event (the block), linking them chronologically with every other subsequent purchase, sale, or revenue event in a recorded chain.

Will the Fed Have to Save Emerging Markets with QE4?

As emerging markets and nations attempting to defend their currency pegs to the USD sell U.S. Treasury bonds (which have been held as foreign exchange reserves), the yields on the Treasuries rise as a matter of supply and demand. As supply increases, sellers must offer higher yields to entice buyers. This dynamic undermines both the emerging markets and the U.S.

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