"It is impossible for somebody to lie unless he thinks he knows the truth. Producing bullshit requires no such conviction."
- Harry Frankfurt
"isn’t it true that ultimately we have done the right thing to act in favor of jobs and of growth rather than the protection of savers?" - Christine Lagarde
Peterffy: Markets Were 'Frighteningly Close' to Collapse Amid GameStop Turmoil
"Gold to central bankers is like the sun to vampires"
https://www.bullionstar.com/blogs/ronan-manly/central-banks-care-gold-price-enough-manipulate/
"No one got rich by diversifying a portfolio" - Bill Miller
This all sounds reasonable, but argues in favour of #gold, not #CNY credibility.
Neither is there evidence that Americans , UK, or Chinese still care about their curency value in real gold terms:
http://pricedingold.com/china/
http://pricedingold.com/pound-sterling/
http://pricedingold.com/us-dollar/
The Americans clearly don’t care!
Speaking of oil exporters and Asia gold exchanges, probably the most honest physical gold delivery contract in the world - #Dubai Shariah Gold - is still denominated and settled in USD - not even local AED, which is also still pegged to USD!
https://www.dgcx.ae/products/shariah-gold
Just a week ago, at Dubai airport, i could pay with #AED or #USD. Even though they could take the CNY to #Shanghai and get physical gold, CNY notes not an option. Same everywhere else i go in the world.
The most revealing observation to me is that anyone I encounter making the case for growing credibility of BRICS currencies through gold, upon inquiry, turns out not to be holding ANY of those currencies, much less government bonds from which those fiat originate!
That’s after BRICS currency has been threatened at least 14 years now, including gold backing.
If i believed the argument, i would be frontrunning markets through long duration BRICS bonds! Yet, they don’t risk leading by example.
Suggests that they are just repeating popular YouTube/podcast click-bait narratives, which they don’t actually believe enough to have skin in the game.
I live in Asia. From Dubai to Philippines, there’s not a hint of dedollarisation here, and rather a USD shortage, though not as critical as in Africa. I see more JPY exchanged , than CNY.
No one i know is even talking about going to Shanghai to buy, much less store gold, given how credible , transparent and trustworthy the Chinese leadership, CNY, capital control and gold export ban system are.
That’s what #Singapore is for now, even for mainland Chinese.
Maybe I'm misunderstanding this. I'm just learning.
But it seems to me that China doesn't care about the Yuan being used in airports. They care about them being about to buy oil and commodities using the CNY to reduce their dependence on the dollar.
Saudi's finance minister said in 2023 WEF clip in January that they are open to dealing in currencies other than the USD for the first time in 48 years.
It would be interesting if Saudi and the OPEC sell oil in different currencies so the world doesn't have to hoard dollars for their energy consumption.
The US seizing Russian assets and removing them from SWIFT seems like something that would make you hedge your bets if you're not on America's good political side.
Explaining to BRICS countries how you want to phase out fossil fuels in Dubai probably also doesn't help.
If I want to front-run this, I would be buying physical gold and bitcoin and not government paper. I think a substantial chunk of what sits currently in bonds will find itself in either physical gold or bitcoin eventually.
I don't hold any CNY, but I also don't import stuff directly from China.
Telling people to keep their reserves in CNY while preventing them from investing in China or taking their currency abroad is indeed difficult.
If you have too much CNY because you're one of the few countries that runs a trade surpluss with China (e.g. Saudi), you can show up in Shanghai, Hong Kong or London with offshore CNY and demand physical gold settlement which largely solves this problem.
The gold is then sourced from 2 places most of the time (The US or the UK) because mainland China gold cannot leave China.
The US can then deliver the gold and:
1. Not let the price of gold rise by allowing paper gold market leverage to rise in London and NYC (Deliver the gold but sell more paper gold to keep gold's price from rising). This prevents gold purchases from devaluing the USD in gold terms.
2. Deliver the gold and let gold's price rise as a result of the purchases. This devalues the USD via a rising gold price.
If the US/UK refuse to deliver the gold or run out, then China and Russia can reset the gold price to a higher level and devlue the USD.
It seems to me like when gold rises in USD terms, it makes it more and more obvious that the currency is being debased and the US' creditors won't get repaid in real terms.
As greenspan said: "Gold is the canary in the coal mine. It signals problems with respect to currency markets."
The US exports mostly dollars, bonds and weapons, whereas China exports a lot more stuff.
Gold is recognized as a store of value (money), whereas USD and CNY are currencies (medium of exchange but not store of value).
The big gold inventory thus lends a lot of credibility to their currency.
However, it is indeed true that they don't audit their gold holdings and the reports and underestimates.
The Chinese want to buy oil and commodities in yuan. They are the world's factory, so other countries can use the yuan to buy stuff from China directly. If these oil exporters have remaining yuan, they are able to either keep the yuan or settle in gold. (The Chinese exchange the yuan for gold). The currency doesn't have to be pegged to gold for it to become more credible because of China's gold holdings. Their goal is to be able to buy commodities and oil in yuan and de-dollarize Asia.
The Chinese have been buying a lot of gold over the last decade. If the price of gold rises, their currency strengthens massively and becomes much more credible.
This is one of the reasons the Americans have to prevent gold from going up.
"NATO was created to keep the Soviet Union out, the Americans in, and the Germans down." - Lord Ismay
"The most important event of the 20th century was the decoupling of the dollar from gold on August 15, 1971.
Since then, mankind has really seen the emergence of a financial empire that has brought the entire human race to its financial system."
- Shijie Xinwenbao
"Never believe anything in politics until it has been officially denied" - Otto von Bismarck
I wonder what the paper gold market leverage is in London and NYC.
They can just deliver physical gold upon request and increase the leverage in the paper gold market so that the price of gold is suppressed and the devaluation of the USD against gold is less obvious.
"To preserve our independence, we must not let our rulers load us with perpetual debt. It is incumbent on every generation to pay its own debt as it goes." - Thomas Jefferson
If one nation uses its currency as the reserve currency for the world, it must run ever-growing deficits to supply the currency needed for the global economy.
These deficits drive a significant hallowing out of domestic productive assets and cause foreign creditors to question the issuing nation's ability to repay sovereign debt in real terms.
- Triffin Dilemma
"The United States has no tools to make all others use the dollar other than a truncheon." - Sergey Glazyev
"The U.S. will try everything, including war, to maintain the dollar's dominance in global trading." - Qiao Liang
In 2015, US Federal debt (excluding Medicare, Medicaid, Social Security and Federal obligations) was $18T.
In 2023, it is $34T (almost doubled in 8 years).
"Gentlemen, we have run out of money. It is time to start thinking." - Ernest Rutherford
"Ben Bernanke is the anti Robin Hood - he takes from the poor to give to the rich"
"If I didn't think the government was going to act, I wouldn't be doing anything this week.
I might be trying to undo things this week.
I'm to some extent betting on the fact that the government will do the rational thing.
It would be a mistake to be buying anything if the government would walk away."
- Warren Buffett on why he bought bank stocks in 2008