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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  10. mmm....shiney!

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

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  11. Silver260

    Silver260 Well-Known Member Silver Stacker

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    The good old USD , the only thing I'm actually making any money on. How ironic.

    Well , the collapse of ours , but you get the point.
     
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  12. minimilled

    minimilled Active Member

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    Short answer is yes if you hold significant paper assets, as a hedge and especially a major downturn like 2007-8, for it is the world reserve currency and assets will be liquidated into it, making it sought after.

    In the GFC, “quantitative easing” followed. I don’t think it was all that long after that the AUD saw parity with the USD and for a very brief time was even more valuable. After that wave of fiat creation made its way into the broader economy, silver was one of the boats that rose with the wave and was unceremoniously dumped on a shoal.
     
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  13. mmm....shiney!

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

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    On the back of China's credit fuelled expansion and spending. Not likely to see that again (China).
     
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  14. Silverling

    Silverling Well-Known Member Silver Stacker

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    I took a position on the USD via the ETF USD when our dollar hit .66c 9 days ago. So far it showing good gains with more to come today. The AUD is collapsing at a fast rate.
    upload_2020-3-13_8-18-30.png
     
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  15. JohnnyBravo300

    JohnnyBravo300 Well-Known Member

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    Fiats will mostly fall relative to each other since they are connected and all fake.
    Dont expect the dollar to prop anything up at this point..we are weeks from being Venezuela!
     
  16. Silverling

    Silverling Well-Known Member Silver Stacker

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    Look at it at our point of view. The AUD is going down the toilet fast, virtually against all currencies. So any profits to be made by holding the USD is good. When this slippery slide is over and I see the USD stalling then I am out.
     
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  17. Silverling

    Silverling Well-Known Member Silver Stacker

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    Today's action, up 2.72% in 10 minutes. AUD down to .6277 USD.
    USD
    15.490 15.500 15.490 +0.410 +2.72 15.470 15.490 15.470 39,058
     
  18. Slimey

    Slimey Well-Known Member

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    I am watching the USD Index. Close to clearing 100. It is very possible will draw a chart like the recent gold/silver ratio blasting through the (it will never go past) 100 mark.
    I wonder what gold will do? Not so long ago on the run to 1700 dollars, the dollar and gold were running together, now it seemed to have reverted to inverse relationship. Interesting times.
     
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  19. Slimey

    Slimey Well-Known Member

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    Bingo bongo....just broke 100 on the index and silver does not like it at the moment
     
  20. Slimey

    Slimey Well-Known Member

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    Back below now
     

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