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Precious Metals
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Re: Prudent store of wealth---buy gold
I think it's too early to tell, but I'll give my 2 cents for what it is worth.
- If one looks at it from the perspective of the change in % my take away is as follows.
From the US$ perspective there is basically no reduction in its weight. I believe this is
intentional as "they " are not yet ready to remove reserve status from the $$. Also, it
might have been an enticement so as the US would not balk as much (just
speculation on my part). Thus it will minimize the effect on US$$ and balance sheets
as countries rebalance.
From the IMF perspective it was a way to get China into the game and pursue their
overall strategy of eventually diminishing the US$$ status (small steps). Consider that
the IMF as well as China have stated such (Elimination of US$$ reserve status). I
also might presume that "they" think the US$$ will continue to be the strongest of the
weakest for a while longer!
However the one that seems to have taken the biggest hit is the EURO where they
are dropped by a little over 7% versus a tad over or under 1% for Pound Sterling ,
Japan Yen. Looking at the EURO drop one has to wonder what is behind the larger
reduction.? Are "they" concerned that the Euro will weaken further? Are "they" afraid
that the EURO will get stronger and also challenge US$$ along with the China Yuan?
Anyone's guess as we peons are not privy to the discussions. Regardless EURO is
on notice? Now we know the Yen is a basket case as Abenomics rolls on and the
Pound could go either way given their vote on officially joining the EU or not!
- What the change did do was officially make China a member of the club.
It legitimizes the Yuan and gives China a foot hold. China is the clear winner and
although this re-jigging does not officially take place until Oct 1 2016 you can bet this
will not stop China from continuing to make side agreements for trade in each
country's currency. This will now be easier for China as they are
now "official". This will no doubt open up more currency doors for China at the
expense of the US$$ regardless of the level of Official rebalancing that will take
place.
- This is the first step to minimize the US$$. Due to the long run of the US$$ reserve status they cannot just drop it without causing world chaos. Too many $$ are part of others balance sheets and there is currently no other currency as deeply ingrained and available to keep the charade going so small but deliberate steps it is. However make no mistake about it this is another shot across the US$$ bow and we all should be prepared as best we can as the message is clear.
- The way events have been moving of late I would expect we will start to see the effects of this change sooner than later. The problem is that it is hard to tell what these actual effects will be as we are not privy to what the endgame actually is. IMF has theirs (game) China has its objectives as does the US and what I am totally sure about is that they aren't necessarily after the same objectives. We can only speculate and attempt to join the dots. However I believe this all ties in with the accumulation of Gold by China, Russia and other Asian nations as well as the geopolitical turmoil in play.
Again all speculation and my thoughts!
Best
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Msg # | Subject | Author | Recs | Date Posted |
157897 | Re: Prudent store of wealth---buy gold | sheikafinance | 1 | 11/30/2015 7:25:52 PM |
157904 | Re: Prudent store of wealth---buy gold | easygoodpics | 0 | 11/30/2015 10:12:45 PM |