Dollar to be Debased?
Australian gold nugget
On March 24th, the People’s Bank of China’s (PBoC) chief Zhou Xiaochuan, emphasized his worry over the inflationary risks from the Fed’s money printing scheme, by proposing to replacing the US dollar with the SDR currency, that is controlled by the IMF, as the new global reserve currency. Suresh Tendulkar, an adviser to Indian Prime Minister Manmohan Singh, is urging New Delhi to diversify its $265 billion foreign exchange reserves and hold fewer US dollars.
China’s holdings of US Treasury debt have soared by $257 billion from a year ago, to $763 billion today, exceeding Japan’s holdings of $686 billion. Increasingly, the functioning of the massively indebted American economy is dependent upon China’s willingness to recycle much of its export earnings (largely dependent on sales to the US consumer), to provide loans to the US government.
Yet, any precipitous move by Beijing to become a net seller of US Treasury debt, runs the risk of igniting a US dollar selling panic, triggering massive losses in China’s own portfolio of Treasuries, and the collapse of its main export market, the United States. India’s economic adviser Tendulkar says US dollar holders face a “prisoner’s dilemma” in terms of managing their bond holdings.
White’s gold metal detector
Thanks for writing this! Most people should have some investments in Gold …. the US dollar is sure to fall further.
I too thing the dollar will go lower! Thanks for writing, I very much liked your newest post. I think you should post more frequently, you evidently have natural ability for blogging!
Oh thank you for this informative gold post!
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Thanks for writing, I liked it very much
To understand how gold really did during late 2008′s devastating stock panic, you really need to consider all these currencies concurrently. The takeaway is gold’s panic performance ranged from excellent to spectacular in 7/10ths of these currencies which include the very important euro and British pound. Only the US, Japan, and China saw local-currency gold charts that looked weaker than investors hoped during the panic episode.
In much of the world, gold not only held all of its value, it hit all time highs at the end of 2008.
California gold
Japan and China with their hoards of U.S. dollars have and are continuing to manipulate their currencies to the dollar (they want to keep selling us their production) and supporting the value of the dollar holds gold prices lower than international events really dictate.
Australian gold nuggets
A list of the foreign owners of U.S. Treasury securities is listed by the U.S. Treasury:
Foreign owners of US Treasury Securities (July 2008)
Nation billions of dollars percentage
Japan 593.4 – 22.17%
Mainland China 518.7 – 19.38%
United Kingdom 290.8 – 10.87%
Oil exporters 173.9 – 6.50%
Gold Prospecting
The US debt in the hands of foreign governments is 25% of the total, virtually double the 1988 figure of 13%. Despite the declining willingness of foreign investors to continue investing in US-dollar–denominated instruments as the US Dollar has fallen in 2007, the U.S. Treasury statistics indicate that, at the end of 2006, foreigners held 44% of federal debt held by the public. About 66% of that 44% was held by the central banks of other countries, in particular the central banks of Japan and China. In total, lenders from Japan and China held 47% of the foreign-owned debt.
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