Global Currency Reset

You do realise if the whole world stops using USD as the reserve currency, USD is still worth $1USD?

Most of the world including Americans won’t bat an eyelid

 

the gold price was fixed at 42.22 per ounce in 1971 and remains there as a book entry, the outside world trade it for much more everyday

 

The dollar as a reserve currency is now actually a liability rather than an asset to ordinary Americans. It means that the dollar is actually stronger than it should be which means exports will suffer. This is why DJT wanted the dollar to fall.

As for imports, the US already has food, oil and energy, a strong dollar only means more crap and contributes to more gabbage.

 

How I’ll that change living in Aus, if euro or yuan became the reserve currency.

Also if USD falls 20% to 40% for Americans, doubt any ordinary people will call it a hardship, look at AUD it has risen and fallen that much many many times or the British Pound it’s down what 20% since brexit and most Brits haven’t said much more than the normal British whinging.

 

it is very hard to tell the future, but there is no need for Yuan to be a reserve currency, it just need to be backed by gold at certain transactions based exchanges etc and the rest can follow
I can not believe that the Euro being the second in rank can survive while the Eu is breaking apart right in front of our eyes, when the European become independent again then the Euro will be finished
As for the USD, when the dollar is no longer acceptable for trade settlements, ie in trade wars, many pairs of countries are avoiding that every week, there are only so many 100 pairs of countries, so it would took so many less than 2 years, to be completely by pass the trading with each other using the USD

when these trades are ongoing, the oil is no longer being exchange for USD, then there is no need to keep USD as the part of national reserves, as they are not needed in amongst most trading trade partners anyway
the need would be half in the first two years

since there is no need for USD as reserved, there is no need to park them in the US treasury either, central banks would quit the IMF and stock up their gold hoarding

 

The big part of costs in higher developed economies are services (labour), rent and tax. The main imported costs are usually related to energy and food (both of which Australia already has). This is why I think the effects of the trade war on the US is overblown. I think most Americans (other than the Apple investors) don't even care.

 

What I’m trying to ask is, is the beef with currency system or america?

Because the way I see it, living in a minor country like Australia (a country that will not be in a running to become a reserve currency in any future) it wouldn’t matter what the reserve currency is and wouldn’t make any difference to us.

Of course if we lived in China the likely the next reserve currency, it will make boost the economy but even than once people are used to it it’s just normal.

For people advocating getting rid of reserve currency, How would you change it?

 

its the same thing as asking, how does one in the Eu trying to get out of the Euro
do not keep cash or bank balances or anything that is
or it would be just like the last time, when the local currencies were converted into Euro
but this time it is going to be done in a very dis-orderly manner

the test case like in India, when big notes became futile, even in Eu when the big notes got pulled...but in orderly way

for US, they can create the Treasury Notes again

for Australia, can be business as usual, but there would be much more trade restrictions (sanctions - counter sanctions etc)

what we know it as free trade, it can come to a total halt... we just never knew it then

how did Russia get rid of their USD ? they just did, at least most of it

 

There's a lot of anti-US dollar/US propaganda going on, and the bulk of it actually originates from the US. It's no wonder that the biggest silverbugs are in the US. In recent years, you have got foreign media such as RT and Aljazeera joining the bandwagon.

Go to rt.com, check all their ad links, the ads are supplied by Google. So you have got an "anti-US" propaganda funded by a US company and US advertisers.

Anti-US dollar is big business.

 

Russian companies get green light to mine gold in Venezuela
https://on.rt.com/9l8u


Venezuelan authorities have offered Russian companies to take part in gold exploration and gold mining in the country, according to Russian Ambassador to Venezuela Vladimir Zaemsky.
“As for Russia’s participation in gold-mining or other mining projects, Venezuela has made a wide range of interesting proposals that are currently under consideration by interested Russian operators,” the ambassador said.

The official added that Caracas is deeply interested in cooperating with Russia in the sector of exploration of the country’s solid extractable resources, including gold, diamonds and coltan, which is used for the extraction of elements such as niobium and tantalum.
Apart from proven oil deposits, considered the richest in the world, Venezuela is considerably rich in natural resources such as diamonds, gold, iron ore, aluminum, bauxite, natural gas, and petroleum. According to a report by the World Gold Council published in June, the country has 150 metric tons of gold reserves, which makes it the 25th largest gold reserve in the world.

However, the current economic crisis and US sanctions have forced Venezuela to rely on help from other nations. Earlier this year, Washington banned American businesses and individuals from dealing with entities and people involved in gold sales from the country.

In December, Caracas and Moscow signed a $5 billion investment deal to raise Venezuela's oil production by one million barrels per day.
According to Zaemsky, the parties are also discussing possibility of cooperating on Russia’s Global Navigation Satellite System (GLONASS), which is run by the Russian Aerospace Defense Forces and is currently the second alternative navigational system in operation.

 

it does not mean anything, but the trend is there
U.S. dollar share of global currency reserves hits near 5-year low: IMF https://in.reuters.com/article/fore...serves-hits-near-5-year-low-imf-idINKCN1OR1DO

 

https://www.zerohedge.com/news/2019-01-08/india-begins-paying-iranian-oil-rupees

 

I have a yearly service contract with a large company in India in SGD since 2009. I quoted in EUR, they wanted it in SGD - it's hard to believe but before PIGS, the EUR is actually as widely used in commerce as the Dollar. Luckily, they didn't ask for Rupee because since 2009, the Rupee has dropped by almost half against the SGD. I would have to increase prices along the way, and if you know how large companies work, especially a large Indian company, raising price is a big problem with all the red tape.

 

REFILE-Zimbabwe plans new currency as dollar shortage bites - Finance Minister
https://af.reuters.com/article/commoditiesNews/idAFL8N1ZC056

* Demand for cash payments rises amid dollar shortages

* Zimbabwe has two weeks import cover, needs 6 months reserves

* Zimbabweans still traumatised by memories of hyperinflation

By MacDonald Dzirutwe

HARARE, Jan 12 (Reuters) - Zimbabwe will introduce a new currency in the next 12 months, the country’s Finance Minister said, as a shortage of U.S. dollars plunges the financial system into disarray, forcing businesses to close and threatening unrest.

The southern African nation abandoned its own hyperinflation-wrecked currency in 2009 at the height of an economic recession, adopting the greenback and other currencies including sterling and the South African rand.

But without enough hard currency to back up the $10 billion of electronic funds trapped in local bank accounts, businesses and civil servants are demanding payment in cash which can be deposited and used to make payments both inside and outside the country.

Mthuli Ncube told a townhall meeting late on Friday that a new local currency would be introduced in less than twelve months.

“On the issue of raising enough foreign currency to introduce the new currency, we are on our way already, give us months, not years,” he said.

Zimbabwe currently has less than two weeks import cover, according to central bank data, and the government has previously said it would only consider launching a new currency if it had at least six months of reserves.

Locals are haunted by memories of the Zimbabwean dollar, which became worthless as hyperinflation spiralled to reach 500 billion percent in 2008, the highest rate in the world for a country not at war, wiping out pensions and savings.

A surrogate bond note currency introduced in 2016 to stem dollar shortages has also collapsed in value.

President Emmerson Mnangagwa is under pressure to revive the economy but, in something of a vicious circle, the dollar shortages are undermining efforts to win back foreign investors sidelined under his predecessor Robert Mugabe.

With less than $400 million in actual cash in Zimbabwe according to central bank figures, there are fuel shortages and companies are struggling to import raw materials and equipment, forcing them to buy greenback notes on the black market at a premium of up to 370 percent.

The Confederation of Zimbabwe Industries has warned some of its members could stop operating at the end of the month due to the dollar crunch.

Zimbabwe’s iconic manufacturer of cooking oil and soap, Olivine Industries said on Saturday it had suspended production and put workers on indefinite leave because it owed foreign suppliers $11 million.

A local associate of global brewing giant Anheuser-Busch Inbev said this week it would invest more than $120 million of dividends and fees trapped in Zimbabwe into the central bank’s savings bonds. (Reporting by MacDonald Dzirutwe; Editing by Kirsten Donovan)

 

Bank of China to enable payment in yuan on U.S. e-commerce platforms: Xinhua
https://www.reuters.com/article/us-...u-s-e-commerce-platforms-xinhua-idUSKCN1P707Z

 

Digital Finance Analytics with Lynette Zang. Very impressive duo with a whole smorgasbord of food for thought, including a few more reasons to hang on to PMs.

Foremost being Zang's statement that hyperinflation will be the tool used to 'burn off' the massive worldwide accumulation of debt. I hadn't considered that as a designed outcome worldwide, but it makes sense. When asked, Zang sees that in 5 years time hyperinflation will be roaring and it is at that time that gold will preserve wealth, and silver will be something that can be bartered.

Quite a few pundits (and a few deluded hopefuls) see the coming reset predictions as a potential way to buy up income producing assets, and Zang also mentions a potential to join the rentier class at this point.

Personally I go with Rickard's perspective, that wealth preservation is the best outcome to hope for. If all the signs are pointing to a future reality with hyperinflation, food shortages and a massive 30s style depression, then just making it through will be the reward, not becoming some sort of Robber Baron buying up streets of houses.

Interesting also that Mr North raises the idea that 'the plans are proceeding'! I haven't heard him say that sort of thing before.

 

Interesting presentation on the gold standard variations up until 1971 and some back stories re same.

 

Competition is coming to a gold exchange near you China

India is a step closer to first gold exchange
By Benjamin Parkin and Henry Sanderson
Financial Times, London
Sunday, August 11, 2019

India's long-frustrated hopes to build a regulated and transparent gold market are closer to reality after global banks and trade groups submitted a blueprint to the government to set up the first physical gold exchange in the worlds second-largest consumer market.

India last year said it planned to create a spot gold exchange, inspired by neighbouring China's highly successful Shanghai Gold Exchange. Banks including JPMorgan Chase, Standard Chartered, and State Bank of India, along with the World Gold Council, submitted the blueprint this month after consultations with the government.
Gold jewellery is ubiquitous across the economic spectrum in India, featuring prominently in everything from religious festivals to weddings. With historically limited access to banks, a family's jewellery collection serves as a de-facto savings account for many in the country.

But India, which buys about 800 tonnes of gold a year, lacks a centralized forum for physical trading or a national benchmark price. This has sparked concerns about price transparency and quality of the gold in the trade, and limited India's ability to influence global prices. ...

https://www.ft.com/content/935b6c32-ba81-11e9-8a88-aa6628ac896c