patrick.net

smaulgld says

What if there is a negative price to pay in dealing in dollars?

How does that fit on your "confidence" scale

Until I see a currency, I don't see it. There will be imbalances that will be hard to reconcile. E.G. How much rubbish will Russia buy with their Yuan?

Becoming the reserve currency is not necessarily a gift.

The largest manufacturer in the world is the US by far.

The US makes producer goods as does Germany. When Russia or China needs producer goods they buy from the US.

Re balancing will mitigate the desire for an alternative currency.

If it does happen it seems to me it would be a good thing for the US, as it would greatly reduce the 3rd sector of the economy, as it is not necessarily productive.

indigenous says

smaulgld says

What if there is a negative price to pay in dealing in dollars?

How does that fit on your "confidence" scale

Until I see a currency, I don't see it. There will be imbalances that will be hard to reconcile. E.G. How much rubbish will Russia buy with their Yuan?

Becoming the reserve currency is not necessarily a gift.

The largest manufacturer in the world is the US by far.

The US makes producer goods as does Germany. When Russia or China needs producer goods they buy from the US.

Re balancing will mitigate the desire for an alternative currency.

If it does happen it seems to me it would be a good thing for the US, as it would greatly reduce the 3rd sector of the economy, as it is not necessarily productive.

Its not up to whether YOU see anything
The countries are rejecting the dollar
Short term there is no way its good for the US
Ultimately it may work out in our favor but that isnt certain

smaulgld says

Its not up to whether YOU see anything

The countries are rejecting the dollar

Short term there is no way its good for the US

Ultimately it may work out in our favor but that isnt certain

You choose not to listen...

It is good for the US because for the reason's you are arguing for.

indigenous says

smaulgld says

Its not up to whether YOU see anything

The countries are rejecting the dollar

Short term there is no way its good for the US

Ultimately it may work out in our favor but that isnt certain

You choose not to listen...

It is good for the US because for the reason's you are arguing for.

Its good ultimately for the discipline but devastating in its short term inflationary consequences as the dollar's value erodes due to declining demand

smaulgld says

Its good ultimately for the discipline but devastating in its short term inflationary consequences as the dollar's value erodes due to declining demand

Which would finally force interest rates up. It would finally would encourage saving. It would finally encourage investment. It would finally bring manufacturing on shore (to some degree). It would finally create jobs.

The bubble is going to pop one way or another, to continue to feed the bubble is not good.

indigenous says

smaulgld says

Its good ultimately for the discipline but devastating in its short term inflationary consequences as the dollar's value erodes due to declining demand

Which would finally force interest rates up. It would finally would encourage saving. It would finally encourage investment. It would finally bring manufacturing on shore (to some degree). It would finally create jobs.

The bubble is going to pop one way or another, to continue to feed the bubble is not good.

Agree 100pct it will happen but the transition will be painful

smaulgld says

Agree 100pct it will happen but the transition will be painful

I read around 2030

The Professor says

smaulgld says

Agree 100pct it will happen but the transition will be painful

I'm not liking your painful transition. Do you expect: Weimar hyperinflation, worthless Fed reserve notes, cannibal anarchy, something else?

Depends on how its handled
They never should have done Qe in the first place and certainly not for five years
If there is an increased move away from the dollar raising rates wont have the eventual salubrious impact they had in 80-81
because there was still massive demand for the dollar and the us could absorb the higher borrowing costs.

Today if the dollar falls out of favor our imports become more expensive as do our borrowing costs if rates need to be raised
The fed should already be preparing for this but they keep pushing it off preferring the palliative effects of a zero interest rate policy.

If their hand is forced due to price inflation caused by reduction in the value of the dollar, raising rates wont necessarily help as we dont know how high they would need to be raised to attract capital
If they are too high they crush the economy and force the government to slash spending which short term would cause massive displacement
The fed could choose instead to print more dollars to make up for the shortfall in foreign and domestic bond investment
Or the government could transfer retirement money in private accounts to treasuries at a set low rate of interest

That move would accelerate price inflation

No matter what happens there will be a period of transition
Unfortunately what happens depends on what the fed decides to do
The longer they wait to normalize monetary policy the worse the consequences

What about deflation as witnessed in Japan despite Abenomics?

indigenous says

What about deflation as witnessed in Japan despite Abenomics?

the value of the YEN stayed strong for twenty years even as Japan boosted stimulus as the country had savings and a trade surplus- that is changing.

Price inflation has finally struck Japan with no corresponding benefits to the economy

The inflation rate in Japan was recorded at 3.70 percent in May of 2014. Inflation Rate in Japan was a record low of -2.52 Percent in October of 2009.

http://www.tradingeconomics.com/japan/inflation-cpi

Japan will be instructive for the US. Now that they have their inflation- what are they going to do with it. Will it accelerate?

A BRICs bank
Another interesting development
http://thebricspost.com/brics-bank-to-start-lending-soon-brazil/#.U7yUAu29LCR

bgamall4 says

Gold demand is down. All commodity demand is down. Gold is not treasury bonds. There aren't enough of those.

Its hard to gauge demand
Here is the 2013 silver demand report
http://smaulgld.com/silver-hits-record-demand-2013-led-76-increase-coin-bar-sales/

The decline of the dollar as percentage of reserves https://twitter.com/bySamRo/status/486945367309561856/photo/1

Yahoo! A positive chart on gold : http://finance.yahoo.com/news/charts-hinting-at-a-big-move-for-gold-200430416.html

I just took a bunch of gold and silver and used a hammer to hammer it all really flat. Hence I manipulated it. There. I win!

edvard2 says

I just took a bunch of gold and silver and used a hammer to hammer it all really flat. Hence I manipulated it. There. I win!

You'll find that gold is easier to manipulate than silver. Been done since the time of Exodus:

And they did beat the gold into thin plates, and cut it into wires, to work it in the blue, and in the purple, and in the scarlet, and in the fine linen, with cunning work. Exodus 39:3 KJV

yes... very cunning.

edvard2 says

yes... very cunning.

cunning manipulators!

indigenous says

smaulgld says

This one just came out and talks about the move away from the dollar around the 25-30 minute mark.

Ok listened to it, I don't like listening to Chris Martenson because it is so depressing.

The guest brings up something similar to the Zero Hedge link that you posted, about the cycles in reserve currencies. I could see that it might shift, and some transactions are going to get done without the dollar.

But I just don't see the dollar disappearing as a reserve currency, just because the other countries are in worse shape.

Again I see the biggest factors as demographics and rebalancing.

But while we are on the subject what is the best way to go about buying silver or gold. I hear that selling and buying you can get screwed with various aspects of the process?

another one for you
Doug Casey
https://www.youtube.com/watch?v=PzKpDKQ0gSs#t=383

smaulgld says

another one for you

Doug Casey

Notice he uses the word confidence?

Yea if the Ruble or the Yuan get backed by gold it will be a game changer.

indigenous says

smaulgld says

another one for you

Doug Casey

Notice he uses the word confidence?

Yea if the Ruble or the Yuan get backed by gold it will be a game changer.

Have you seen the amounts of gold russia and china are buying since QE began?

Qe is a confidence destroyer, gold a gainer

Gold reserves by country
http://smaulgld.com/gold-reserves-country-top-twenty/

Thought experiment:

Would this development force the US to go back to the gold standard?

indigenous says

Thought experiment:

Would this development force the US to go back to the gold standard?

Last thing they would want if they have lease or sold all their gold- the US has placed all its eggs in the petro dollar standard
http://smaulgld.com/why-saudi-arabia-matters-in-helping-to-keep-the-u-s-dollar-as-the-worlds-reserve-currency/

smaulgld says

Last thing they would want if they have lease or sold all their gold- the US has placed all its eggs in the petro dollar standard

Doesn't have much to do with want. IMO if the Ruble or Yuan are backed by gold they will quickly replace the dollar as the reserve currency as long as they can foment enough confidence. After all they are Communist countries. Of course these days it could be argued so is the US?

So you are saying that the US does not Have the gold that is indicated in your chart? That is Big Time theft, if that is the case? I mean heads Have to Roll.

indigenous says

So you are saying that the US does not Have the gold that is indicated in your chart? That is Big Time theft, if that is the case? I mean heads Have to Roll.

That is not my suspicion but the suspicion of many. There was even a history channel program on how the US may no longer have any gold left. Also covers naked short selling:
This is worth a watch
https://www.youtube.com/watch?v=DeiSivYb53Q

In my gold and silver manipulation series I cover the practice of central bank "leasing" gold to satisfy physical delivery to suppress the price

Through such leasing arrangements physical gold is made available for delivery in amounts that would not be otherwise available at the existing prices. Market purchases for large amounts of physical bullion would normally increase the price, but leasing allows the existing gold held by the bullion banks to be resold without having to purchase additional bullion to satisfy the delivery requirement. Thus, through leasing, gold can be sold to lower the price or used to satisfy large buy orders such that the price does not rise.

Is the Gold All Gone?

Of course, when gold is leased to satisfy physical delivery, it no longer exists in the account from which it was borrowed. In the West Sells Paper Gold While The East Buys Physical Gold we noted the trend towards physical gold heading from west to east.

http://smaulgld.com/gold-silver-price-manipulation/

BTW- the inability of the Fed to deliver the German's gold -first saying it would take 8 years then finally having the german's call off the request is very close to circumstantial evidence being proof that the US doesn't have it to give back

Germany’s Gold Repatriation Request

In January 2013, Germany requested the return of part of the physical gold it held on deposit at the Federal Reserve in New York and in Paris at France’s Central Bank, citing the need to have the gold close to hand in the case of a currency crisis.

The German gold repatriation request and subsequent events raised two issues – did the Fed still have Germany’s gold and was Germany losing confidence in the European Monetary Union and the Euro?

Germany’s requested anticipated a repatriation of a total of 674 tons of gold from the Fed and the French Central Bank. The Fed informed Germany that they could not inspect their gold and that their gold would be delivered over a period of 8 years, raising eyebrows why it would take so long to make the requested repatriation.

A year after the original request Zero Hedge reported that Germany had received just 37 tons, or about 5% of the 674 tons requested. Curiously, only five tons were delivered by the Fed with the other 32 tons coming from Paris. The five tons of gold delivered to Germany were different gold bars than the ones that Germany had placed on deposit with the Fed a few decades earlier.

The circumstances surrounding Germany’s gold repatriation request caused many to question whether the Fed indeed still held ANY of Germany’s gold.
http://smaulgld.com/gold-silver-price-manipulation/

Yahoo! the Chinese Yuan a growing force in international transactions http://news.yahoo.com/chinas-yuan-growing-force-global-finance-172929413.html

The BRICS issue and anti dollar declaration

"We are pleased to announce the signing of the Treaty for the establishment of the BRICS Contingent Reserve Arrangement (CRA) with an initial size of US$ 100 billion."

http://brics6.itamaraty.gov.br/media2/press-releases

bgamall4 says

smaulgld says

being proof that the US doesn't have it to give back

Who cares. Again, treasuries are the new gold. Gold is irrelevant. Now that may allow the banksters to screw main street, but that is reality. Gold is irrelevant.

They wish to make it so
But china and russia keep buying gold and dumping treasuries

http://smaulgld.com/foreign-holdings-u-s-treasuries/

Been in the works for a while http://in.mobile.reuters.com/article/idINDEE92P0AI20130326?irpc=932

Jim Rickards on the New BRICS banks
http://video.cnbc.com/gallery/?video=3000292269

Paul Craig Roberts on gold price manipulation:
July 16, 2014. "The first two days this week gold was subjected to a series of computer HFT-driven “flash crashes” that were aimed at cooling off the big move higher gold has made since the beginning of June. During this move higher, the hedge funds, who typically “chase” the momentum of gold up or down, built up hefty long positions in gold futures over the last 6 weeks. In order to disrupt the upward momentum in the price of gold, the bullion banks short gold in the futures market by dumping large contracts that drive down the price and make money for the banks in the process."
http://www.paulcraigroberts.org/2014/07/16/insider-trading-financial-terrorism-comex/

Argentina seeks ties with China http://www.skynews.com.au/news/world/asiapacific/2014/07/20/china-seeks-ties-with-argentina.html

China Lends Argentina money
http://finance.yahoo.com/news/china-lends-argentina-7-5-012756066.html;_ylt=AwrBEiKi1MtT82MA6.vQtDMD

China signs $150 billion currency swap with Switzerland http://www.reuters.com/article/2014/07/21/us-china-switzerland-currency-idUSKBN0FQ0H520140721

Turkey wants to drop the dollar too
http://www.hurriyetdailynews.com/ankara-proposes-free-trade-plans-to-russia.aspx?pageID=238&nID=69367