Post From Philosophy of Metrics
Link To Earlier Post
Reader Comments On “Re-Introducing Gold To The International Monetary System (Freepom)”
Alan Thanks JC. I’m quite serious. This article genuinely helped me along with understanding better the developing roadmap, future goals and possibilities of macroeconomic monetary policy and gold.
Peter JC as I have stated before I have a limited background base in which to understand all of this, especially the SDR – this many headed complicated beast :) . Most of what I have learned over the last 2 years stems from POM articles, which I then have to breakdown and simplify with more research.
Still SDR remains the hardest thought process to crack as it impacts on so many levels.
However, am I correct in thinking to counteract individual country greed and hoarding it would be wise to first let the the RMB basket take place then start the process and allow Gold to depreciate in order for other countries a chance to buy at a lower price then once the world feels an even balanced sovereign portfolio has been achieved to allow Gold a spot in the SDR basket and then to appreciate.
Peter Continues This would facilitate a transition better would it not and dispel notions of hoarding?
Perhaps even extend the timeline to 3 to 4 years as to much fluctuation would just be counter productive. To many people are looking and theorizing at the moment and more practical plans need to come to pass to appease markets/people.
Anyway am I understanding things correctly or is there a flaw in this hypothesis. Man… I need a beer :) ……….also psst insider tip pls (any chance of a 3 month POM discount coming in the future )
David Aylward (@Aylward5) The dollar will depreciate 20 to 30% against what?
JC Collins The currencies of its major trading partners. Thus the subsequent adjustment to trade deficits and trade surpluses.
Greatest post ever!
JC Collins Could still happen, as I referenced in the recent post, if renminbi and SDR liquidity expands and gold isn’t added to the composition this time around. I’m not ready to consider that analysis a failure yet.
Muad'Grumps If you haven’t noticed there is an ongoing credit collapse all about. We’ve reached the point at which the CBs have lost the narrative. No matter what they do deflation will win. Capital will flee equities and eventually bonds to gold. Nobody will want to hold a liability of a CB. Then the CBs will have no choice but restructure their own balance sheets.
JC Collins There’s a credit collapse happening? Central banks have lost the narrative? Okay. Thank you for correcting me.
NuTroll Doug Eberhardt has a similar case for Gold
In his scenario the dollar becomes the last perceived safe haven , and the inverse relationship between it and gold pushes gold sub 1000$ (he said around 850). Eventually the dollar loses this status and gold shoots up (which would pair with your analysis of gold being included in the SDR basket)
Muad'Grumps Are you aware of what’s happening with the Italian banks? They’ve been dead for awhile. Check out the charts of some of the European financials since Brexit. Some are now penny stocks and are not recovering with today’s short covering rally in general equities. We may have multiple Lehmans already out there.
JC Collins Banks have failed before. The world keeps going around. Thanks for the updates from Zero Hedge.
Muad'Grumps You really have no idea how levered the system is. Anybody remember Creditanstalt? Ironic that its descendant, DB, is at the nexus of this Winter’s credit event.
JC Collins Of course I don’t understand. Teach me please. Hahaha. People like you crack me up. Because I don’t agree with you I must be missing something right. There’s nothing you can bring forth here that I haven’t researched or considered. And you do nothing to counter my proven facts and trends.
Ian Le Cheminant How does the Canadian dollar fare in this, against the US and other major currencies? If you have already answered this in earlier writing please post the link. Thanks.
JC Collins I would expect that the Canadian and US dollars would reach purchasing power parity at some point. The calls this week to renew the North American Union would suggest this could be the case. Outside of that, a depreciation in the USD will logically see an appreciation in the CAD against the dollar. The CAD will strengthen as crude prices climb as well. So its a win win for the looney.