When they replace the USD...

C

CriticalSilver

New Member
Silver Stacker
... with another fiat currency unit, what will you do?

A) trade out of PMs and believe Their assurances that this time it's different?
B) hold your PMs and buy the inevitable dip/crash, if they haven't changed the PM buying rules and outlawed such transactions?
C) hedge your position by trading some of your PMs for the new currency units?
D) go off-grid at the mark of the beast and await the second coming?
E) other, please explain.
 
Do you mean when the global reserve currency is replaced by another, or do you literally mean that the domestic currency of the US would be replaced?

Even if there was a total collapse of the USD, surely the USD itself wouldn't go anywhere. They'd create a new fiat currency but chances are they'd still just call it the dollar. USD Mark II, so to speak. That would make sense as you wouldn't have to change the coding or behaviour of existing cash registers, computer systems etc.

As for your question, I'd probably do 2) or 3), depending on the rules governing the new currency. I don't think I'd do it immediately though - I suspect the value of the new currency would fluctuate wildly in the first few months/years.
 
In gold well before the change, out at massive profit after.
Another option is to just hold fiat? the AUD would probably do extremely well.

The only nations that will do well out of a collapse of the USD are those with high gold reserves and/or those with a stable currency.
 
And yeah as roman says, fiat ain't all the same. Despite the fact that I spend some time on this site, I'm not really a true stacker. I only dabble in metals. Metals are only ~4% of my wealth, the rest is just plain old AUD sitting in high-interest savings (which is still making a slight profit, after inflation - this would not be true in most other countries right now). And that's fine by me as a collapse of the USD would lead to the AUD doing very well; the AUD behaves much like metals in that scenario.

If I lived in the US, it would be a very different story though, given fiat'd be earning close to 0% and hence losing value due to inflation.
 
Yes, I mean when the USD as a global reserve fails, which I do not distinguish between the failure of the USD and the US itself, as all those offshore dollars come screaming back to the nation in which they were printed. A collosal train wreck there.

But the current global powers will try to keep things under their control and it stands to reason that they will try to replace the failed USD with another fiat currency unit. May be they'll call it the the Globo or something and equate it to some confidence inspiring measure, say US$100 post failure.

So while Gold goes to US$160,000, say, (and a loaf of bread costs US$300, we are talking about a complete failure of the currency here) it remains at 1,600 Globos an ounce. All bank USD accounts get converted from USD to Globos at 100:1, say, and They congratulate themselves for saving the world.

Of course, they won't go to the effort of printing any actual currency, even though the RBA might try to bribe a few people to get the contract :) , it will just be electronic.

I was just thinking a PM holder might think that they have successfully dodged a bullet and be inclined to transfer assets into the Globo reset and get on with the new normal.

I don't know where the RBA would fit into such a global currency concept, but let's say they could pronounce a conversion rate for A$ to Globos at, say, 25:1 and Gillard declares Australia will adopt the Globo to set an example for the rest of the world on carbon trading or something like the good global citizen Australia is.

How would the PM chips fall for you?
 
The next currency ;)
Bananas I'm telling you :D
download7.jpg

images80.jpg

images78.jpg

images77.jpg
 
B) Continue to hold physical gold.

Currency is best for long term borrowing/lending and daily/weekly transactions.

Physical gold is a way of saving your excess wealth for an undetermined period of time until you decide you want to buy something. Whatever currency is in effect at the time simply facilitates the exchange from your saved store of reserve wealth into consumables or another form of wealth like a house or an investment like a new business.

When the current global fiat currency system changes so will paper gold. Only physical gold will remain as a central reserve wealth asset stored outside and unaffected by whatever happens to the currency system.
 
roman said:
In gold well before the change, out at massive profit after.
Click to expand...
Hopefully this ^^^^.
Depends if new currency is backed by gold I guess?
 
wrcmad said:
roman said:
In gold well before the change, out at massive profit after.
Click to expand...
Hopefully this ^^^^.
Depends if new currency is backed by gold I guess?
Click to expand...

OK, that's interesting. I'm not entirely sure what "backed by gold" really means, but I guess you don't mean fully redeemable for gold. Let's say it's non-redeemable but partially backed by Gold at say some abstract definition of 20%. Would you sell out for the new Globo currency?
 
In the event oil was sold in another currency and so USD automatically ceased to be the world reserve currency. What you I do?
Continue to hold onto my PM stack.
Keep my fiat savings in AUD
I imagine my pension funds would crash and burn.
Wait until the dust settles before selling PMs
 
soupdragon said:
In the event oil was sold in another currency and so USD automatically ceased to be the world reserve currency. What you I do?
Click to expand...

Turkey & others are now buying oil from iran in gold and alternative currencies. I strongly believe this it why Obama is pointing his finger at them.
http://en.wikipedia.org/wiki/Iranian_oil_bourse

Likewise china and russia are cutting out the middle man for oil deals. Makes sense since they are neighbors and arguably have more stable currencies than the yanks.

I read somewhere that we (australia) are working on a yen / dollar exchange deal with the chinese.

I'm pretty sure the AUD will be devalued in line with the rest of the world once the unemployment & trade deficit numbers start to rise, although there will be a lengthy delay which will cause a lot of pain for anybody in manufacturing or export industries (especially primary producers)
This is already well underway, the company I work for has shed around 70% of it's staff in the last 3 or 4 years due to price pressure from imports.

Miners won't be affected as badly since commodities will rise against the devalued currencies

'Underemployment' is already up to 19%, or so I heard on the ABC a couple of days ago.

It is happening now, so slowly as to be barely noticeable.
 
from history, before any event could happen, usually goverment make the holding of PM illegal, and need to be handed back to goverment to be given fiat.

so B and C are out of question. lets just hope that PM dealer dont keep any of our purchase details.
 
(Reuters) - The Obama administration on Tuesday said China's currency remained "significantly undervalued" but stopped short of labeling the world's second-biggest economy a currency manipulator.
If its possible to manipulate the Renminbi ,manipulating silver would be childs play..
 
Rad Dood said:
(Reuters) - The Obama administration on Tuesday said China's currency remained "significantly undervalued" but stopped short of labeling the world's second-biggest economy a currency manipulator.
Click to expand...

US: Hey, you Chinese are currency manipulators!

China: Say what?

US: You manipulate the value of your currency!

China: We do? What makes you say that?

US: Well, we...we...mbmmmbmmmm...

China: Pardon?

US: We printed a heap of US dollars and you pegged your Yuan to the dollar so the exchange rate didn't go down, all right?

China: So, you printed lots more of your currency to make the stuff you buy from us and everyone else cheaper, yes?

US: Yes!

China: An you say WE are currency manipulators?
 
What does China know?
http://www.shtfplan.com/headline-ne...ilk-iron-ore-precious-metals-imports_01092013
United Nations agricultural experts are reporting confusion, after figures show that China imported 2.6 million tons of rice in 2012, substantially more than a four-fold increase over the 575,000 tons imported in 2011.

The confusion stems from the fact that there is no obvious reason for vastly increased imports, since there has been no rice shortage in China. The speculation is that Chinese importers are taking advantage of low international prices, but all that means is that China's own vast supplies of domestically grown rice are being stockpiled.

Why would China suddenly be stockpiling millions of tons of rice for no apparent reason?

Perhaps it's related to China's aggressive military buildup and war preparations in the Pacific and in central Asia.

If a 400% year-over-year increase in rice stockpiles isn't enough to convince you the Chinese are preparing for a significant near-term event, consider that in Australia the country's two major baby formula distributors have reported they are unable to keep up with demand for their dry milk formula products. Grocery stores throughout the country have been left empty of the essential infant staple as a result of bulk exports by the Chinese.

A surge in sales of one of Australia's most popular brands of infant formula has led to an unusual sight for this wealthy nation: barren shelves in the baby aisle and even rationing of baby food in some leading retail outlets.

We'd be more apt to believe the Chinese were panic-buying baby formula had the Chinese milk scandal occurred recently. The problem is that it happened four years ago. Are we to believe the Chinese are just now realizing their baby food may be tainted?

In addition to the apparent build-up in food stocks, the Chinese are further diversifying their cash assets (denominated in US Dollars) into physical goods. In fact, in just a single month in 2012, the Chinese imported and stockpiled more gold than the entirety of the gold stored in the vaults of the European Central Bank (and did we mention they did this in one month?).
Click to expand...
.

Just plain old commodities shopping apparently.

Now, why would China be stockpiling even more iron (and setting 15 month price highs in the process) if they had massive amounts of excess inventory just last year?

Something tells us this has nothing to do with an economic recovery, or even economic theory in terms of popular mainstream analysis.

Why does China need four times as much rice year-over-year? Why purchase more iron when you already have a huge surplus? Why buy gold when, as Federal Reserve Chairmen Ben Bernanke suggests, it is not real money? Why build massive cities capable of housing a million or more people, and then keep them empty?

It doesn't add up. None of it makes any sense.

Unless the Chinese know something we haven't been made privy to.

Is it possible, in a world where hundreds of trillions of dollars are owed, where the United States indirectly controls most of the globe's oil reserves, and where super powers have built tens of thousands of nuclear weapons and spent hundreds of billions on weapons of war (real ones, not those pesky semi-automatic assault rifles), that the Chinese expect things to take a turn for the worse in the near future?

The Chinese are buying physical assets and not just representations of those assets in the form of paper receipts but the actual physical commodities. And they are storing them in-country. Perhaps they've determined that U.S. and European debt are a losing proposition and it's only a matter of time before the financial, economic and monetary systems of the West undergo a complete collapse.
Click to expand...
 
Cimexus said:
And that's fine by me as a collapse of the USD would lead to the AUD doing very well; the AUD behaves much like metals in that scenario.
Click to expand...

Not so fast. As the Aussie dollar gets stronger, our exports get weaker. It makes us less competitive on the global market. This is why so many countries are in a race to devalue their currencies right now, and the Aussie dollar will be no different.
 
spannermonkey said:
The next currency ;)
Bananas I'm telling you :D
http://i28.photobucket.com/albums/c220/dannydodge/Doodles/download7.jpg
http://i28.photobucket.com/albums/c220/dannydodge/Doodles/images80.jpg
http://i28.photobucket.com/albums/c220/dannydodge/Doodles/images78.jpg
http://i28.photobucket.com/albums/c220/dannydodge/Doodles/images77.jpg
Click to expand...

Nice photos Spannermonkey..Ihave always wondered what you looked like. :D


Smarter than the average monkey, I see. :)

Really cheered me up to see how the monkeys play the game. :lol:

Regards Errol 43
 
You must log in or register to reply here.
Back
Top