A Case for holding US Dollars?

Discussion in 'Currencies' started by fishduck, Dec 15, 2019.

  1. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    I can only think it's the way the loans are structured and how the Fed can balance its books and what it does with the USD when it is returned (profit is remitted to treasury and the principle is destroyed??) ie the loan is made in USD so it can only be paid back in USD. I'm going to check another book so if anything crops up I'll let you know.
     
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  2. madaw1

    madaw1 Well-Known Member

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    That could be the case-like any other loan even in Australia,if it's structured in AUD -can't be paid in other currency or other form of security-But I don't know if this apply to Fed as well...
     
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  3. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    I think I’m wrong. The Fed doesn’t lend the money. The country or corporation in need of a loan issues bonds in the currency of whatever country they are issuing the bonds. :D So if an Indian government or corporation wants to borrow USD for some reason, it sells bonds on the US market in USD.

    Let’s say Tata issues bonds in Australia. These bonds would be issued in AUD, with an agreement that upon maturity the full value of the bond would be repaid, as well as interest on maturity or at agreed upon pre-determined points in time eg every 6 months or whatever. @madaw1 Hedge Fund buys AUD1million from Tata with the expectation that in say 5 years it gets its AUD1million back plus interest. If Tata were to insist upon paying its debt back in gold, I can foresee some logistical complications let alone possible legal ones as far as auditing and tax requirements go for the @madaw1 Hedge Fund when the bonds mature and it has to report its activities.
     
  4. alor

    alor Well-Known Member Silver Stacker

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    in China, they have RMB GOLD OIL contracts
    its like Iran sell OIL and get RMB then Iran buy GOLD in RMB
    so there is exchange to settle them, in free markets many things can get done
     
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  5. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    10 years gold chart in different currencies. It may surprise you!

    If you look at the price of gold vs 10 years ago, in aud, gold has gone up 90%, but in sgd only 35%, 75% in eur, 70% in gbp and 40% in usd.

    This explains why gold investment is so unpopular in Singapore until today, the local precious metal forum is dead for years, is still dead, while there is a lively community in Australia and the UK.

    Looking at the charts, it is highly probable that the price of gold will have a lot more to rise in usd and sgd.

    inr

    [​IMG]

    aud

    [​IMG]

    jpy

    [​IMG]

    gbp

    [​IMG]

    sgd

    [​IMG]

    eur

    [​IMG]

    usd

    [​IMG]
     
    Last edited: Jan 13, 2020
  6. 66rounds

    66rounds Well-Known Member Silver Stacker

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    Yes new highs in many currencies but still room to move in others. Hence why calls for 2k USD gold are realistic.
     
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  7. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

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    Agree. The charts for inr, aud and jpy are similar to each other. Very interesting. I don’t know much about currencies but I think the sgd strength is unsustainable, only question is when it will turn. This is why gold is even more of a contrarian trade for me. Betting on a change in trend, so to speak. Or betting on a weakening of the usd since the sgd tracks the usd.
     
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  8. leo25

    leo25 Well-Known Member Silver Stacker

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    Good talk with Barton Wang, talk starts at 1hr 3min. HODL USDs

     
  9. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

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    I’ve been out of the Realvision loop for a couple of weeks. God knows what I’ve been doing?
     
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