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Russia is de-dollarizing
The ruble and other currencies do not compete against the dollar. They are dollar derivatives.
The dollar is headed to ruin, but that doesn’t mean that any other paper currency can replace it. The others will fail first.
The dollar will fail last.
The failure of the dollar, and the transition to gold happens to be the theme of an event The Gold Standard: Both Good and Necessary, in New York on Nov 1. There hasn’t been a real recovery from the crisis of 2008, and there won’t be until we return to the use of gold as money. Please come to this event to hear Andy Bernstein present the moral case for capitalism, and Keith Weiner present the case against the dollar and for the gold standard.
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Perfect, right around the holidays/new year. The time frame is what the call from Harvy Organ stated. Who's website was taken down by court order.
except that the rest of the world has NOT stopped buying US treasuries. Same as it even was and dollar has same % of international trade as 10 years ago.
"Who's going to accept silver and gold in trade? EVERYONE, soon enough. "
This assumes the existence, or even the realistically possible existence, of free markets in this occupied territory. If you still believe in that, then I suggest you try another red pill, son.
I think you need to look beyond your nose, son.
US is quickly becoming irrelevant.
So your "occupied territory" will become YOUR problem and not the rest of the world's.
Wish you well.
And you're stacking what? Tulips?
+1 That's funny.
I liked this quote better:
"...probably occuring within two to three months from now."
Whatever you're taking, I hope you're sharing. That is some serious reality distortion.
Fiat acquires its value in use always. If the credit against it is good, there is no problem with a paper currency. In fact in Scotland they barely used any gold, it was not a fiat currency, yet a paper currency, and the credit backing it was quite good. So the scottish paper was quite good. Hong-Kong has its M0 backed by USD, but they could switch to Yuan, or Gold. What matters is not what the currency is pegged to, but if the aggregate credit is of good value.
By the same token, any currency whose credit backing it is good, is itself a good currency.
M0 in foreign central banks is backed by monetary assets which is US credit. So the argument goes that removing USD would doom those currencies. Not necessarily, in fact the most solid system is when only domestic credit exists on the Central Bank´s balance sheet. For the international trade, they could use SDRs, bitcoins, Gold or whatever would work for international trade.
What the BRIC countries need a replacement for the US credit against their own domestic M0. Currency is a mean to an end. Not the other way around. There are plenty of alternatives to use for Foreign central banks.
This shift would move the cost of credit for the US very high, as the US would not longer be able to force seignorage on the rest of the world.
If Hong-Kong switches its peg to another peg, or depeg it, it would barely be noticed...
They have done it before. They unpegged from Sterling and then unpegged from USD. Did Hong-Kong collapse? Not at all.
This argument does not stand the test of history.
Now if people stop using the USD as a monetary asset, the USD would plunge. It would create less inflation than people think it would in the US.
Why? When Silver stopped being used as a monetary asset, the last currency still using it saw their exchange rate plunge.
The complicating factor for the US is that instead of just seeing its currency exchange rate fall, it would have some credit consequences.
Why again? Because Silver if demonetized falls in relation to Gold, that is a given. So currency pegged to it fall with it.
However if Foreign central banks stop using USD credit as a monetary asset, there is of course this fall in the USD, but there is a twist.
Unlike Silver, USD credit is not a token. It is still a promise to repay money in the future.
So this credit dumping would raise interest rates in the US, while it would boost terms of trade. (Silver demonetization boosted terms of trade because it was not going hand in hand with internal money printing --except for the fact that Silver ended-up in China, sure--)
If the Fed does not want to allow interest rates to rise because of the dumping, they will have to monetize this credit, and then this internal mechanism could result in wasting the benefits of terms of trade improvement.
The only 'backing' a fiat needs is enough to defend it in the forex against guys like Soros. In a world of free-floating currencies the vaue may also rise and fall with trade.
The gold is only needed if there undesired imbalances and the country is willing to 'buy' those imbalances back to a desired level.
We are NOT EVER going back to a gold standard. It is a fools errand to fight for it.
In the long run there is ALWAYS a problem with fiat currency. The main problem with it is that the press operators and those nearest them will eventually become all powerful financially and politically. They will own everything and the rest of us will own nothing.
When I was born the dollar could be exchanged for gold at a fixed rate by any other nation on earth and the coins any citizen could get at the bank were 90% silver. Now the gold is gone and the silver is gone. They have both been replaced by debt that they say we owe to them.
Silver is not a "token". It is a store of value. The dollar is now the token. There is no actual wealth stored within it. Rather it is a promise by liars that they will extract value from the citizens at some point to back the dollar. When the citizens are tired of being collateral for bankster credit, we will see some real change. http://www.amazon.com/Localism-Philosophy-Government-Mark-Moore/dp/06922...
Yep, fiat's problem has always been a problem with printing and now in the digital age it's all magic numbers on a computer. Thing's like PM's are better because they are a fixed supply with a known ability to grow only slowly because it has to be mined. Bitcoin is an interesting thing because it works a lot like gold but it has the problem of being pure digital and a powerful government can cut off access at any time by merely putting restrictions on the bbackbone routers and DNS servers with a few commands on a keyboard. Until we can get an honest PM based currency or an unfuckable fiat, we will continue on our magic ride down the toilet.
You seem to be saying that the "capacity" of a country to repay it's debt gives strength to it's currency. I get that- I also get that fiat currencies can work- up until such point that the quantity gets manipulated and that is an elevator that only goes one way. Up- for obvious reasons.
I find the rest of your comment to be sort of nebulous. It just doesn't say much other than the usual supply demand 101 style economics. If people use real money- like gold and silver- of course the value of the dollar plummets. Nobody is using it. Hardly a headscratcher here.
I won't down arra ya cause you are trying to convey something and that effort is worth something.
I tend to side with the proven success secrets of the ancients and keep a little shine in my pockets.
Yeah, I keep a mason jar full of 'shine in my jacket pocket too. Oh, you mean shiny metal coins. Ahh. Sorry, I'm from the Ozarks.
Im not 100% sure I agree. At some stage you look at issued currency & debt against value of economy and resources.
Russia might currency might be sinking on lower oil prices...but fact is they have big energy reserves and more to come. Likewise AUD might fall on China sinking....but it still has massive reserves of minerals and energy, low Debt / GDP. And they all haven't printed trillions of currency. even with a housing crash...they will still have something there to rebuild on.
Oh yeh and they have real gold owned or in the ground reseves and production.
Strategically you might think Asian/ SE Asian economies are the future with Russia....in the long term.....if you fleeing from Euro, Yen and USD etc...... might be tempted to leap into gold then down the track from somw gold to some select currencies.....
A countries currency being backed by something is not the same as a country having something.
The argument here is that since the dollar is the world's reserve currency it will fail last. However this argument falls apart if the dollar loses its reserve status, which is happening.
Which is why it must fail 'before' the dedollarization is complete.
We'll likely go back to a multi-currency system, at least for awhile but the question will be what currencies will be trading? The Euro looks none to healthy and the Yuan has no broad market trade history and the Yen is nearly toilet paper. The Ruble might be tradable if it becomes a true gold based system but will Putin actually put their gold on the table? Interesting times indeed.
The argument also assume that the event(s) that lead to the currency downfalls will be fairly evenly distributed over the globe. This assumption fails if the US is disproportionately affected by war or natural disaster. Just one big stain hitting the cleanest dirty shirt will put it at the bottom of the laundry basket quickly.
Other currencies are dollar derivatives true, but that doesn't mean the dollar will be the last man standing. Simple reason the BRICS can switch their currencies to became gold, silver or other commodity derivative. So a major currency fall will start the fall and the dollar will be the last major currency which is standing.
The ECB balance sheet has 10,800 tons of gold as it's biggest holding. If the dollar fails, gold becomes it's only holding.
In what way is the euro a dollar derivative?
.
By virtue of that perception for one.
So?? You say they have none?...doubtful..
Still I'd think long and hard on the structure of the euro before answering.
No other currency I am aware of holds gold, marked to market on the balance sheet. Do you see what this means. Should I explain 'balance sheet'?
I say if they have even 10% of what the balance sheet says they do, physical and on the continent, I'd be surprised. Very surprised. Only two countries out there I'd remotely trust to have anywhere near the amount of gold they say they have, physically within their borders is Russia and China.
I personally am sticking with what has lasted the last 6000 years, Gold and Silver and not in the so called paper form.
But one must rely on many things going forward, like food, ammo, guns and whole list of others.
Good Luck & God Bless, oh I said God.
Couldn't have said it better USisCorrupt.....
OT a little; But Nelson Bunker Hunt has died. Don't worry, bro...we'll keep on stackin' that phyzz silver for ya!!! Those fiat bankster scumbags are on the ropes.
Silver-Market Manipulator Nelson Bunker Hunt Dies At 88; Two Traders Look Back
http://www.kitco.com/news/2014-10-22/Silver-Market-Manipulator-Nelson-Bunker-Hunt-Dies-At-88-Two-Traders-Look-Back.html
And this from ZeroHedge on Hunt back in 2011:
Silverfinger - The True Story Of Nelson Bunker Hunt:
Over 30 years ago, a man by the name of Nelson Bunker Hunt hatched the perfect plan: protect his inherited wealth (which then was one of the largest legacy fortunes in the world) from the inflationary destruction of "paper" assets by converting his assets into silver, and in the process cover the silver market, and send the price of silver to an inflation adjusted price of over $140 (nearly three times higher than the nearly record nominal silver price hit last week). Understandably, Hunt's name has appeared very often in the popular media in recent months, since after all it was the "Hunt" price that the May 1 silver smackdown (which will most certainly never be investigated) that sent silver from $48 to $42 in seconds that was being protected by the paper cartel. Yet just who is Nelson Bunker Hunt? And how did he cover the silver market when did? What exactly did he do, and is someone doing a comparable silver cornering right now? And, most importantly, why? The answers, all of which are provided in this September 1980 Playboy article reprint, will surprise and astound many, primarily due to the myriad parallels between the world of the 1970s and our own.
What follows is one man's attempt to escape from the "system."
http://www.zerohedge.com/article/silverfinger-true-story-nelson-bunker-hunt
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