The View From 1776

Bond Investment Guru Predicts Dollar to Lose International Reserve Status

Interest rates have begun to rise, and there is little the Fed can do about it without triggering further rapid decline in the exchange value of the dollar.

Posted by .(JavaScript must be enabled to view this email address) on 05/29 at 09:44 PM
  1. I go to http://www.kitco.com to get spot price quotes. Being in the coin and collectibles industry for 17 years, I read some but not all of the articles. Late last year, I kept noticing that the wholesale price and availability of the hard asset gold in collectible gold form was completely disjointed from the spot price of gold. Now, I'm seeing more canaries hitting the bottom of the cage.
    The U.S. Mint has stopped minting small denomination gold. I've also discovered the reason for this was that the Mint couldn't supply enough gold coin blanks to mint all the bullion coins requested. The U.S. Mint was importing coin blanks (called planchets) from another country's mint. That mint has also said it will not be minting small denomination gold. A large coin seller had a representative in from a large foreign mint to discuss a four year program. One of the account executives asked if that mint was experiencing difficulties in getting gold for coins. The response was "Yes. And it's getting more difficult." If any mint in the world should have access to gold, it would be this mint.
    I ask potential new, but reluctant clients "How often have you heard people say 'I wish I'd brought gold at $300/$500/$700 ?' " The response is "A lot." My statement then is "Why aren't you buying now?" "Well, spot gold at $900+ is expensive." "But you didn't buy at $300. And it was cheap then. So, if you're not buying at $900+ spot, you must then believe that gold is going to become cheaper. Do you believe that?" "No." "Well, so you say that you believe that gold will go higher. Much higher in some cases.That there will be inflation. And I've shown you that spot gold is sorely disconnected to hard gold availability. So, again, why aren't you buying gold?" At this point there is some mumbling or silence or an emergency situation that needs immediate attention.
    And BTW, bullion is not, repeat NOT the way to own gold!
    Posted by Amendment X  on  05/30  at  12:28 PM
  2. The German government wants the U.S. to return the gold it has stored here. The UAE is calling for their gold stored in England to be returned.

    Some are speculating that the U.S. has leased the gold they had stored, out and can't return it. I don't think that is the case but, just the demand for their gold is interesting.

    We have China buying gold and building up their gold reserves. Russia, same thing. Something is up and many believe it is due to the belief the dollar will fall dramatically and stop being the world's reserve currency.

    The big argument has been what currency will replace it. The answer? None nor is any needed although eventually one will arise or the SDR's may be used.

    China is proof that there doesn't need to be a replacement. It is making deal after deal with nations that it buys raw materials from that it will accept their currency and they will accept China's. Thus, Brazil trades reals/yuan. Argentina, its currency for yuan. Brazil and Argentina have agreed to stop using the dollar between them and accept each others currency.

    In other words, no one currency is replacing the dollar. Each nation is making separate deals that avoid using the dollar.

    There is so much going on all over the world that adds risk to the dollar, it isn't funny. Yet, our media seldom mentions any of this.
    Posted by JanPBurr  on  05/30  at  12:49 PM
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