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The Great Rotation/Decline of the Dollar ?


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Given recent economic news, I've been trying to work out if the US Dollar is about to ho wobbly, perhaps even losing reserve status.

I spoke with a colleague who was insisting that he'd make a mint by investing in the US post COVID......"Ah the US always recovers so quickly, I'm sticking all my funds there."

Me, "I am not so sure. I agree Bank Deposits are rubbish, but look at the US' debt levels and spending. Trump is desperate to keep prices up, but I reckon this could weaken the Dollar which is historically strong. I'm not sure which way things will go, so I'm diversified at the moment."

Well it seems to be paying off as a consolidation strategy at the moment. Having made gains on the rebound, the trick is to lock them in for the Long Term and so far my mixed portfolio seems to be doing this.

From here I can see the USD declining now, not disastrously, but enough to eat gains from the US markets. The US probably needs this to increase exports.

There is also a real risk the Dollar might be about to lose reserve status. Not sure we'll be banking in China yet, so may be this glows back into the Euro - which I guess Europe could do without.

https://www.bloomberg.com/amp/news/articles/2020-07-28/goldman-warns-dollar-s-role-as-world-reserve-currency-is-at-risk

The one thing I do see going mad is Gold. I've got a decent holding of e-Gold (probably not enough) and some physical. But in reality, what the Dollar falling really means is inflation. 

If inflation happens, then we may well get a great rotation. Finally Bond prices will drop (interest rates will rise) and following a reset and subsequent stabilisation, it may make sense once again to keep cash in the bank.

Edited by Mikhail Liebenstein
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Hmmm, could be...  confused-face-smiley-emoticon.gif

... or more likely the Squid prop trading desk are planning to T/P on their massive $ short, so they're looking to spoof a few retail punters to minimize slippage.

Remember their $200 oil call:lol:

 

 

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53 minutes ago, Deckard said:

Hmmm, could be...  confused-face-smiley-emoticon.gif

... or more likely the Squid prop trading desk are planning to T/P on their massive $ short, so they're looking to spoof a few retail punters to minimize slippage.

Remember their $200 oil call:lol:

 

 

Yes, never easy to tell when Squiddly Diddly is involved!

 

CA7E5BB4-985E-49E3-ABB1-7CCB443DB0C9.png

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Schiff has been forecasting the death of the dollar for a while. You can listen to his latest thoughts in his podcast. He thinks the world will go back to the gold standard whether the Federal Reserve wants to or not. 

 

 

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34 minutes ago, Warlord said:

Schiff has been forecasting the death of the dollar for a while. You can listen to his latest thoughts in his podcast. He thinks the world will go back to the gold standard whether the Federal Reserve wants to or not. 

 

 

I remember reading The Demise of the Dollor by Addison Wiggin back in 2007.

https://www.amazon.co.uk/Demise-Dollar-Great-Investments-Agora/dp/0471746010

As usual in finance/economics, the author is right, but the markets can remain insane.

 

 

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41 minutes ago, Warlord said:

Schiff has been forecasting the death of the dollar for a while. You can listen to his latest thoughts in his podcast. He thinks the world will go back to the gold standard whether the Federal Reserve wants to or not

The world will not go back to the gold standard, and you can take that to the bank.

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31 minutes ago, thecrashingisles said:

The world will not go back to the gold standard, and you can take that to the bank.

Not even if the Chinese do so? What if they link to gold and reveal "substantial" holdings that can be inspected independently (imagine that).

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Posted (edited)
5 minutes ago, Roman Roady said:

Seeing as his opponent is going to be "sleepy creepy hid'n Biden", he may not have to.

Biden looks like a walking presidential  shoe in for his VP pick.

Edited by Mikhail Liebenstein
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30 minutes ago, thecrashingisles said:

The world will not go back to the gold standard, and you can take that to the bank.

Tend to agree with this. Never is a very strong word, but the only way I see a gold standard being reintroduced is if the loss of faith in fiat is so catastrophic that it is believed a *something* standard is necessary to reboot the system. Whether something is gold or not I don't know.

But it is hard to see how politicians would agree to a gold standard because by its very nature it prevents manipulation of the financial system, which is exactly what politicians want to do.

On the other hand it does make you ask the question why central banks feel the need to store tons of the stuff. After all, if you are not going to use it for something what is the point of having it.

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Just now, Gigantic Purple Slug said:

Tend to agree with this. Never is a very strong word, but the only way I see a gold standard being reintroduced is if the loss of faith in fiat is so catastrophic that it is believed a *something* standard is necessary to reboot the system. Whether something is gold or not I don't know.

But it is hard to see how politicians would agree to a gold standard because by its very nature it prevents manipulation of the financial system, which is exactly what politicians want to do.

On the other hand it does make you ask the question why central banks feel the need to store tons of the stuff. After all, if you are not going to use it for something what is the point of having it.

 

The equivalent to the Gold Standard without an official Gold Standard is Gold at $20,000 an Ounce.

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The world powers will NEVER return to the Gold Std. How utterly a charlatan is Schiff.

Post FED (tomorrow) for several weeks, expect a rally in US$.
From about September expect the US$ to crash well into next year, perhaps for a few years.

Unless.... it recaptures, strongly, the 200 W MA. Which is unlikely.

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There will be no gold standard. Not even a new Bitcoin standard. The currency will be (is?) based on debt. The more debt a country holds, the more money it can issue. No possibility of "default" because more debt can be issued, which means more currency, to pay off the debt. It really is very simple and very clever.

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11 hours ago, Roman Roady said:

Not even if the Chinese do so? What if they link to gold and reveal "substantial" holdings that can be inspected independently (imagine that).

Why would they want to do that? Gold would be a massive hindrance to them.

Dollar will stay, to much entrenchment worldwide.

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1 hour ago, Peter Hun said:

Why would they want to do that? Gold would be a massive hindrance to them.

Dollar will stay, to much entrenchment worldwide.

 

12 hours ago, thecrashingisles said:

Why on earth would they want to do that?

Well I think it depends upon your view point as to whether its is if or when they become the global hegemonic power.

It sounds like both of you are in the "if" camp. If so then there is no reason...end of chat.

But if  you think it is a question of "when", then we need to consider timing...and has there ever been a better time to try to topple the US in its global dominance?

An unpopular, incompetent and incoherent POTUS in election year who's up against someone who in many ways is worse. In fact if sleepy creepy Joe wins, the world will be paying VERY close attention to his running mate.

The economies of the west still reeling from COVID with possibly the worse yet to come. We are already expecting Great Depression levels of poverty without the second wave.

There may never be a better time to move against the west and it cant be long before the US picks a fight at its own leisure.

They cant beat our military yet but they sure as hell can take down our economies which all hang of the FIAT Dollar IMPO.

Sorry to go all "Schiff" on you!

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Just now, Roman Roady said:

Well I think it depends upon your view point as to whether its is if or when they become the global hegemonic power.

It sounds like both of you are in the "if" camp. If so then there is no reason...end of chat.

But if  you think it is a question of "when", then we need to consider timing...and has there ever been a better time to try to topple the US in its global dominance?

An unpopular, incompetent and incoherent POTUS in election year who's up against someone who in many ways is worse. In fact if sleepy creepy Joe wins, the world will be paying VERY close attention to his running mate.

The economies of the west still reeling from COVID with possibly the worse yet to come. We are already expecting Great Depression levels of poverty without the second wave.

There may never be a better time to move against the west and it cant be long before the US picks a fight at its own leisure.

They cant beat our military yet but they sure as hell can take down our economies which all hang of the FIAT Dollar IMPO.

Sorry to go all "Schiff" on you!

A gold-backed currency ultimately depends on trust no less than a fiat currency.  How would China launching a gold-backed currency do anything in itself to change the power structure?

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8 minutes ago, thecrashingisles said:

A gold-backed currency ultimately depends on trust no less than a fiat currency.  How would China launching a gold-backed currency do anything in itself to change the power structure?

They could store the gold in a hollowed out volcano.

Sharks with laser beams could patrol the outside of the island.

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15 hours ago, Mikhail Liebenstein said:

Given recent economic news, I've been trying to work out if the US Dollar is about to ho wobbly, perhaps even losing reserve status.

I spoke with a colleague who was insisting that he'd make a mint by investing in the US post COVID......"Ah the US always recovers so quickly, I'm sticking all my funds there."

Me, "I am not so sure. I agree Bank Deposits are rubbish, but look at the US' debt levels and spending. Trump is desperate to keep prices up, but I reckon this could weaken the Dollar which is historically strong. I'm not sure which way things will go, so I'm diversified at the moment."

Well it seems to be paying off as a consolidation strategy at the moment. Having made gains on the rebound, the trick is to lock them in for the Long Term and so far my mixed portfolio seems to be doing this.

From here I can see the USD declining now, not disastrously, but enough to eat gains from the US markets. The US probably needs this to increase exports.

There is also a real risk the Dollar might be about to lose reserve status. Not sure we'll be banking in China yet, so may be this glows back into the Euro - which I guess Europe could do without.

https://www.bloomberg.com/amp/news/articles/2020-07-28/goldman-warns-dollar-s-role-as-world-reserve-currency-is-at-risk

The one thing I do see going mad is Gold. I've got a decent holding of e-Gold (probably not enough) and some physical. But in reality, what the Dollar falling really means is inflation. 

If inflation happens, then we may well get a great rotation. Finally Bond prices will drop (interest rates will rise) and following a reset and subsequent stabilisation, it may make sense once again to keep cash in the bank.

agree on this 

 

been running a momentum strategy on US stocks since mid April but gains now being given back in exchange rate. I am ok for now as I bought the $ the day after the election for 136 I think but its now close to 1.30

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15 minutes ago, thecrashingisles said:

A gold-backed currency ultimately depends on trust no less than a fiat currency.  How would China launching a gold-backed currency do anything in itself to change the power structure?

Trust, not gained by a gold backed currency but lost by the FIATs.

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Central banks are buying gold why?  When the dollar loses its status the world will go back to the gold standard because gold is money and has been for thousands of years. The  fiat system we have had since 74 will soon be over thank god.

 

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  • 415 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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