Have I liked one too many Conspiracy Theory tiktok videos or tweets? I've been seeing a bit of this on my various social media timeliness. ( BRIC countries trying to usurp the US Dollar as the world's reserve currency). I'm sure it would be a decade + to make any headway but that would have enormous economic implications for the US. The Ukraine War & fallout seems to be accelerating the process.
https://foreignpolicy.com/2023/04/24/brics-currency-end-dollar-dominance-united-states-russia-china/
https://dailyinvestor.com/world/14318/dollar-to-remain-dominant-despite-brics-currency-challenge/the
Quote from: bennydorano on May 03, 2023, 10:17:52 AM
Have I liked one too many Conspiracy Theory tiktok videos or tweets? I've been seeing a bit of this on my various social media timeliness. ( BRIC countries trying to usurp the US Dollar as the world's reserve currency). I'm sure it would be a decade + to make any headway but that would have enormous economic implications for the US. The Ukraine War & fallout seems to be accelerating the process.
https://foreignpolicy.com/2023/04/24/brics-currency-end-dollar-dominance-united-states-russia-china/
https://dailyinvestor.com/world/14318/dollar-to-remain-dominant-despite-brics-currency-challenge/the
Was one of the reasons the Yanks went to war in Iraq not that Saddam was threatening to sell their oil in Euros?
I've been tipping away at the Crypto market. Mostly Bitcoin. Happy enough with how it's going. I think there's another big up coming.
Quote from: johnnycool on May 03, 2023, 10:41:15 AM
Quote from: bennydorano on May 03, 2023, 10:17:52 AM
Have I liked one too many Conspiracy Theory tiktok videos or tweets? I've been seeing a bit of this on my various social media timeliness. ( BRIC countries trying to usurp the US Dollar as the world's reserve currency). I'm sure it would be a decade + to make any headway but that would have enormous economic implications for the US. The Ukraine War & fallout seems to be accelerating the process.
https://foreignpolicy.com/2023/04/24/brics-currency-end-dollar-dominance-united-states-russia-china/
https://dailyinvestor.com/world/14318/dollar-to-remain-dominant-despite-brics-currency-challenge/the
Was one of the reasons the Yanks went to war in Iraq not that Saddam was threatening to sell their oil in Euros?
They say Gaddaffi was looking to do similar in Africa, start a centralised African currency.
Quote from: johnnycool on May 03, 2023, 10:41:15 AM
Quote from: bennydorano on May 03, 2023, 10:17:52 AM
Have I liked one too many Conspiracy Theory tiktok videos or tweets? I've been seeing a bit of this on my various social media timeliness. ( BRIC countries trying to usurp the US Dollar as the world's reserve currency). I'm sure it would be a decade + to make any headway but that would have enormous economic implications for the US. The Ukraine War & fallout seems to be accelerating the process.
https://foreignpolicy.com/2023/04/24/brics-currency-end-dollar-dominance-united-states-russia-china/
https://dailyinvestor.com/world/14318/dollar-to-remain-dominant-despite-brics-currency-challenge/the
Was one of the reasons the Yanks went to war in Iraq not that Saddam was threatening to sell their oil in Euros?
That was a theory which Robert Fisk also peddled, it was far from his finest. There is not enough trade in oil to have an impact on the value of the USD.
Reserve currency status usually goes to the most powerful country in the world. Before WW2 that was the UK with sterling and after WW2 it was the US.
Quote from: seafoid on May 03, 2023, 08:34:46 PM
Reserve currency status usually goes to the most powerful country in the world. Before WW2 that was the UK with sterling and after WW2 it was the US.
This.
There are a lot of things you can buy with dollars, therefore there are a lot of people willing to buy dollars, therefore USD is the world reserve currency.
Quote from: trailer on May 03, 2023, 11:02:10 AM
I've been tipping away at the Crypto market. Mostly Bitcoin. Happy enough with how it's going. I think there's another big up coming.
And what would that bit of "thinking" be based upon?
Quote from: johnnycool on May 03, 2023, 10:41:15 AM
Quote from: bennydorano on May 03, 2023, 10:17:52 AM
Have I liked one too many Conspiracy Theory tiktok videos or tweets? I've been seeing a bit of this on my various social media timeliness. ( BRIC countries trying to usurp the US Dollar as the world's reserve currency). I'm sure it would be a decade + to make any headway but that would have enormous economic implications for the US. The Ukraine War & fallout seems to be accelerating the process.
https://foreignpolicy.com/2023/04/24/brics-currency-end-dollar-dominance-united-states-russia-china/
https://dailyinvestor.com/world/14318/dollar-to-remain-dominant-despite-brics-currency-challenge/the
Was one of the reasons the Yanks went to war in Iraq not that Saddam was threatening to sell their oil in Euros?
Was it really? Any evidence?
I recall someone spouting that at the time. When they went on to state that countries tried to maximise the value of their own currency then I knew they were a crackpot.
Quote from: dec on May 03, 2023, 08:47:47 PM
Quote from: seafoid on May 03, 2023, 08:34:46 PM
Reserve currency status usually goes to the most powerful country in the world. Before WW2 that was the UK with sterling and after WW2 it was the US.
This.
There are a lot of things you can buy with dollars, therefore there are a lot of people willing to buy dollars, therefore USD is the world reserve currency.
Bretton Woods agreement 1944
https://www.transwap.com/blog/us-dollar-how-it-became-the-global-currency
Good article, history of and other future options.
Joe will sink the US , happening everyday already
It's felt like the last days of the Roman Empire in regards to the US for a long time. I reckon China will eventually invade Taiwan and the US will be entangled, overstretched & exposed, it will hasten the demise.
I don't see much risk to the US$ not being the currency that is used the most throughout the world.
However, I can see it's days as being the world's reserve asset (ie countries save the majority of their surpluses in US Treasuries) being numbered. Gold will go back to being a bigger part of countries storing their savings, note it hit an all time high valuation yesterday with the continued difficulty of US regional banks, as will Bitcoin (not "Crypto", but Bitcoin). The valuation of gold will have to rise significantly in price if it is used to settle net trading accounts as the energy trading surpluses / defecits are many multiples of the value of the gold being produced.
The change didn't start with the US sanctioning Russia's FX reserves, but it certainly accelerated the speed of this change.
Energy producers have known for some time that it doesn't make any sense for them to store the profits of their energy sales in US Treasuries when their fossil fuels are finite yet the value of the USD decreases every year due to inflation. They would literally be safer keeping their excess exports in the ground as it will hold it's purchasing power better for future years. But storing their reserves in gold is different as gold has historically kept its value compared to the price of oil; something the USD definitely hasn't done in the last 40 / 50 years.
Quote from: Smokin Joe on May 04, 2023, 07:04:03 AM
I don't see much risk to the US$ not being the currency that is used the most throughout the world.
However, I can see it's days as being the world's reserve asset (ie countries save the majority of their surpluses in US Treasuries) being numbered. Gold will go back to being a bigger part of countries storing their savings, note it hit an all time high valuation yesterday with the continued difficulty of US regional banks, as will Bitcoin (not "Crypto", but Bitcoin). The valuation of gold will have to rise significantly in price if it is used to settle net trading accounts as the energy trading surpluses / defecits are many multiples of the value of the gold being produced.
The change didn't start with the US sanctioning Russia's FX reserves, but it certainly accelerated the speed of this change.
Energy producers have known for some time that it doesn't make any sense for them to store the profits of their energy sales in US Treasuries when their fossil fuels are finite yet the value of the USD decreases every year due to inflation. They would literally be safer keeping their excess exports in the ground as it will hold it's purchasing power better for future years. But storing their reserves in gold is different as gold has historically kept its value compared to the price of oil; something the USD definitely hasn't done in the last 40 / 50 years.
Would tracking oil prices be good?
Oil prices are 50% of what they were in 2007. And 3 years ago they were 13% of their 2007 value. I can only imagine the consequences of sovereign wealth fluctuating like that. I think that is one of the reasons why oil producing countries have tried to invest in alternative assets.
Quote from: smelmoth on May 04, 2023, 07:30:54 AM
Quote from: Smokin Joe on May 04, 2023, 07:04:03 AM
I don't see much risk to the US$ not being the currency that is used the most throughout the world.
However, I can see it's days as being the world's reserve asset (ie countries save the majority of their surpluses in US Treasuries) being numbered. Gold will go back to being a bigger part of countries storing their savings, note it hit an all time high valuation yesterday with the continued difficulty of US regional banks, as will Bitcoin (not "Crypto", but Bitcoin). The valuation of gold will have to rise significantly in price if it is used to settle net trading accounts as the energy trading surpluses / defecits are many multiples of the value of the gold being produced.
The change didn't start with the US sanctioning Russia's FX reserves, but it certainly accelerated the speed of this change.
Energy producers have known for some time that it doesn't make any sense for them to store the profits of their energy sales in US Treasuries when their fossil fuels are finite yet the value of the USD decreases every year due to inflation. They would literally be safer keeping their excess exports in the ground as it will hold it's purchasing power better for future years. But storing their reserves in gold is different as gold has historically kept its value compared to the price of oil; something the USD definitely hasn't done in the last 40 / 50 years.
Would tracking oil prices be good?
Oil prices are 50% of what they were in 2007. And 3 years ago they were 13% of their 2007 value. I can only imagine the consequences of sovereign wealth fluctuating like that. I think that is one of the reasons why oil producing countries have tried to invest in alternative assets.
It's certainly better than the historical alternative, storing their profits in US Treasuries as oil has increased from $2 per barrel to what is now a low of $67 (and occassionally over $100 per barrel)
Quote from: bennydorano on May 03, 2023, 11:09:24 PM
It's felt like the last days of the Roman Empire in regards to the US for a long time. I reckon China will eventually invade Taiwan and the US will be entangled, overstretched & exposed, it will hasten the demise.
This, like everything is a bit more complex as the Chinese economy is heavily dependent on Taiwanese silicone chip manufacturing output and they still don't have the fab facilitates for the high end chip manufacturing as yet. Invade Taiwan and a few well place incendiary devices could be a devastating blow to the Chinese economy, and the US will also feel the impact of this as they're trying to ramp up US chip manufacturing but are dependent on German fab technology...
It's a complex web the electronics world.
Quote from: johnnycool on May 04, 2023, 08:29:54 AM
Quote from: bennydorano on May 03, 2023, 11:09:24 PM
It's felt like the last days of the Roman Empire in regards to the US for a long time. I reckon China will eventually invade Taiwan and the US will be entangled, overstretched & exposed, it will hasten the demise.
This, like everything is a bit more complex as the Chinese economy is heavily dependent on Taiwanese silicone chip manufacturing output and they still don't have the fab facilitates for the high end chip manufacturing as yet. Invade Taiwan and a few well place incendiary devices could be a devastating blow to the Chinese economy, and the US will also feel the impact of this as they're trying to ramp up US chip manufacturing but are dependent on German fab technology...
It's a complex web the electronics world.
Interesting, didn't know this. Surprising that the US and China aren't producing their own!
Quote from: Smokin Joe on May 04, 2023, 07:47:13 AM
Quote from: smelmoth on May 04, 2023, 07:30:54 AM
Quote from: Smokin Joe on May 04, 2023, 07:04:03 AM
I don't see much risk to the US$ not being the currency that is used the most throughout the world.
However, I can see it's days as being the world's reserve asset (ie countries save the majority of their surpluses in US Treasuries) being numbered. Gold will go back to being a bigger part of countries storing their savings, note it hit an all time high valuation yesterday with the continued difficulty of US regional banks, as will Bitcoin (not "Crypto", but Bitcoin). The valuation of gold will have to rise significantly in price if it is used to settle net trading accounts as the energy trading surpluses / defecits are many multiples of the value of the gold being produced.
The change didn't start with the US sanctioning Russia's FX reserves, but it certainly accelerated the speed of this change.
Energy producers have known for some time that it doesn't make any sense for them to store the profits of their energy sales in US Treasuries when their fossil fuels are finite yet the value of the USD decreases every year due to inflation. They would literally be safer keeping their excess exports in the ground as it will hold it's purchasing power better for future years. But storing their reserves in gold is different as gold has historically kept its value compared to the price of oil; something the USD definitely hasn't done in the last 40 / 50 years.
Would tracking oil prices be good?
Oil prices are 50% of what they were in 2007. And 3 years ago they were 13% of their 2007 value. I can only imagine the consequences of sovereign wealth fluctuating like that. I think that is one of the reasons why oil producing countries have tried to invest in alternative assets.
It's certainly better than the historical alternative, storing their profits in US Treasuries as oil has increased from $2 per barrel to what is now a low of $67 (and occassionally over $100 per barrel)
Are you for real?
If you invested to hold in 2007 and your chosen store of wealth was oil then today you would have lost 50% of your capital and received no income in the intervening 15 years. The comforting news being 3 years ago you would have lost 87% of your capital.
You are stating that USD has done worse. What are the numbers you are using?
Quote from: johnnycool on May 04, 2023, 08:29:54 AM
Quote from: bennydorano on May 03, 2023, 11:09:24 PM
It's felt like the last days of the Roman Empire in regards to the US for a long time. I reckon China will eventually invade Taiwan and the US will be entangled, overstretched & exposed, it will hasten the demise.
This, like everything is a bit more complex as the Chinese economy is heavily dependent on Taiwanese silicone chip manufacturing output and they still don't have the fab facilitates for the high end chip manufacturing as yet. Invade Taiwan and a few well place incendiary devices could be a devastating blow to the Chinese economy, and the US will also feel the impact of this as they're trying to ramp up US chip manufacturing but are dependent on German fab technology...
It's a complex web the electronics world.
And the USA is by far the largest importer of Chinese goods, with Japan not that far behind.
Quote from: Main Street on May 04, 2023, 12:17:42 PM
Quote from: johnnycool on May 04, 2023, 08:29:54 AM
Quote from: bennydorano on May 03, 2023, 11:09:24 PM
It's felt like the last days of the Roman Empire in regards to the US for a long time. I reckon China will eventually invade Taiwan and the US will be entangled, overstretched & exposed, it will hasten the demise.
This, like everything is a bit more complex as the Chinese economy is heavily dependent on Taiwanese silicone chip manufacturing output and they still don't have the fab facilitates for the high end chip manufacturing as yet. Invade Taiwan and a few well place incendiary devices could be a devastating blow to the Chinese economy, and the US will also feel the impact of this as they're trying to ramp up US chip manufacturing but are dependent on German fab technology...
It's a complex web the electronics world.
And the USA is by far the largest importer of Chinese goods, with Japan not that far behind.
Quote from: CK_Redhand on May 04, 2023, 12:56:05 PM
Quote from: Main Street on May 04, 2023, 12:17:42 PM
Quote from: johnnycool on May 04, 2023, 08:29:54 AM
Quote from: bennydorano on May 03, 2023, 11:09:24 PM
It's felt like the last days of the Roman Empire in regards to the US for a long time. I reckon China will eventually invade Taiwan and the US will be entangled, overstretched & exposed, it will hasten the demise.
This, like everything is a bit more complex as the Chinese economy is heavily dependent on Taiwanese silicone chip manufacturing output and they still don't have the fab facilitates for the high end chip manufacturing as yet. Invade Taiwan and a few well place incendiary devices could be a devastating blow to the Chinese economy, and the US will also feel the impact of this as they're trying to ramp up US chip manufacturing but are dependent on German fab technology...
It's a complex web the electronics world.
And the USA is by far the largest importer of Chinese goods, with Japan not that far behind.
So near and yet so far
Quote from: smelmoth on May 04, 2023, 09:40:02 AM
Quote from: Smokin Joe on May 04, 2023, 07:47:13 AM
Quote from: smelmoth on May 04, 2023, 07:30:54 AM
Quote from: Smokin Joe on May 04, 2023, 07:04:03 AM
I don't see much risk to the US$ not being the currency that is used the most throughout the world.
However, I can see it's days as being the world's reserve asset (ie countries save the majority of their surpluses in US Treasuries) being numbered. Gold will go back to being a bigger part of countries storing their savings, note it hit an all time high valuation yesterday with the continued difficulty of US regional banks, as will Bitcoin (not "Crypto", but Bitcoin). The valuation of gold will have to rise significantly in price if it is used to settle net trading accounts as the energy trading surpluses / defecits are many multiples of the value of the gold being produced.
The change didn't start with the US sanctioning Russia's FX reserves, but it certainly accelerated the speed of this change.
Energy producers have known for some time that it doesn't make any sense for them to store the profits of their energy sales in US Treasuries when their fossil fuels are finite yet the value of the USD decreases every year due to inflation. They would literally be safer keeping their excess exports in the ground as it will hold it's purchasing power better for future years. But storing their reserves in gold is different as gold has historically kept its value compared to the price of oil; something the USD definitely hasn't done in the last 40 / 50 years.
Would tracking oil prices be good?
Oil prices are 50% of what they were in 2007. And 3 years ago they were 13% of their 2007 value. I can only imagine the consequences of sovereign wealth fluctuating like that. I think that is one of the reasons why oil producing countries have tried to invest in alternative assets.
It's certainly better than the historical alternative, storing their profits in US Treasuries as oil has increased from $2 per barrel to what is now a low of $67 (and occassionally over $100 per barrel)
Are you for real?
If you invested to hold in 2007 and your chosen store of wealth was oil then today you would have lost 50% of your capital and received no income in the intervening 15 years. The comforting news being 3 years ago you would have lost 87% of your capital.
You are stating that USD has done worse. What are the numbers you are using?
OK, you chose 2007, so I'm not picking the time comparison.
In 2007 you could buy approx 10 barrels of oil for ounce of gold (source: https://www.macrotrends.net/1380/gold-to-oil-ratio-historical-chart) and today you can buy 26 barrels of oil for an ounce of gold, so gold has increased in value by 2.6 times vs oil.
In USD terms in 2007 a barrel of oil cost cost approx $70 per barrel which is pretty much the same price as today. So the USD has stayed at parity vs oil since 2007.
This is what I mean by a net exporting country is much better to store their reserves in gold than US Treasuries as it maintains their purchasing power of real life commodities much better than USD does. Yes, you forego an interest, but the interest you receive is less than the underlying currency is being devalued by.
This isn't just my opinion, in a speech Putin gave in June last year he said:
"According to the IMF, global currency reserves are at $7.1 trillion and 2.5 trillion euros now. These reserves are devalued at an annual rate of about 8 percent. Moreover, they can be confiscated or stolen any time if the United States dislikes something in the policy of the states involved. ...
According to analyst estimates, and this is an objective analysis, a conversion of global reserves will begin just because there is no room for them with such shortages. They will be converted from weakening currencies into real resources like food, energy commodities and other raw materials. Other countries will be doing this, of course. Obviously, this process will further fuel global dollar inflation."
Quote from: Armagh18 on May 04, 2023, 09:24:04 AM
Quote from: johnnycool on May 04, 2023, 08:29:54 AM
Quote from: bennydorano on May 03, 2023, 11:09:24 PM
It's felt like the last days of the Roman Empire in regards to the US for a long time. I reckon China will eventually invade Taiwan and the US will be entangled, overstretched & exposed, it will hasten the demise.
This, like everything is a bit more complex as the Chinese economy is heavily dependent on Taiwanese silicone chip manufacturing output and they still don't have the fab facilitates for the high end chip manufacturing as yet. Invade Taiwan and a few well place incendiary devices could be a devastating blow to the Chinese economy, and the US will also feel the impact of this as they're trying to ramp up US chip manufacturing but are dependent on German fab technology...
It's a complex web the electronics world.
Interesting, didn't know this. Surprising that the US and China aren't producing their own!
Trump started it, Biden is continuing it, but yeah, the US is trying to reshore chip manufacturing. Passed more than $50 billion in federal funding last summer and new plants are on the way or planned in various states. They've a lot of work to do in getting a skilled workforce together for it.
Quote from: Smokin Joe on May 04, 2023, 09:38:40 PM
Quote from: smelmoth on May 04, 2023, 09:40:02 AM
Quote from: Smokin Joe on May 04, 2023, 07:47:13 AM
Quote from: smelmoth on May 04, 2023, 07:30:54 AM
Quote from: Smokin Joe on May 04, 2023, 07:04:03 AM
I don't see much risk to the US$ not being the currency that is used the most throughout the world.
However, I can see it's days as being the world's reserve asset (ie countries save the majority of their surpluses in US Treasuries) being numbered. Gold will go back to being a bigger part of countries storing their savings, note it hit an all time high valuation yesterday with the continued difficulty of US regional banks, as will Bitcoin (not "Crypto", but Bitcoin). The valuation of gold will have to rise significantly in price if it is used to settle net trading accounts as the energy trading surpluses / defecits are many multiples of the value of the gold being produced.
The change didn't start with the US sanctioning Russia's FX reserves, but it certainly accelerated the speed of this change.
Energy producers have known for some time that it doesn't make any sense for them to store the profits of their energy sales in US Treasuries when their fossil fuels are finite yet the value of the USD decreases every year due to inflation. They would literally be safer keeping their excess exports in the ground as it will hold it's purchasing power better for future years. But storing their reserves in gold is different as gold has historically kept its value compared to the price of oil; something the USD definitely hasn't done in the last 40 / 50 years.
Would tracking oil prices be good?
Oil prices are 50% of what they were in 2007. And 3 years ago they were 13% of their 2007 value. I can only imagine the consequences of sovereign wealth fluctuating like that. I think that is one of the reasons why oil producing countries have tried to invest in alternative assets.
It's certainly better than the historical alternative, storing their profits in US Treasuries as oil has increased from $2 per barrel to what is now a low of $67 (and occassionally over $100 per barrel)
Are you for real?
If you invested to hold in 2007 and your chosen store of wealth was oil then today you would have lost 50% of your capital and received no income in the intervening 15 years. The comforting news being 3 years ago you would have lost 87% of your capital.
You are stating that USD has done worse. What are the numbers you are using?
OK, you chose 2007, so I'm not picking the time comparison.
In 2007 you could buy approx 10 barrels of oil for ounce of gold (source: https://www.macrotrends.net/1380/gold-to-oil-ratio-historical-chart) and today you can buy 26 barrels of oil for an ounce of gold, so gold has increased in value by 2.6 times vs oil.
In USD terms in 2007 a barrel of oil cost cost approx $70 per barrel which is pretty much the same price as today. So the USD has stayed at parity vs oil since 2007.
This is what I mean by a net exporting country is much better to store their reserves in gold than US Treasuries as it maintains their purchasing power of real life commodities much better than USD does. Yes, you forego an interest, but the interest you receive is less than the underlying currency is being devalued by.
This isn't just my opinion, in a speech Putin gave in June last year he said:
"According to the IMF, global currency reserves are at $7.1 trillion and 2.5 trillion euros now. These reserves are devalued at an annual rate of about 8 percent. Moreover, they can be confiscated or stolen any time if the United States dislikes something in the policy of the states involved. ...
According to analyst estimates, and this is an objective analysis, a conversion of global reserves will begin just because there is no room for them with such shortages. They will be converted from weakening currencies into real resources like food, energy commodities and other raw materials. Other countries will be doing this, of course. Obviously, this process will further fuel global dollar inflation."
Crude oil was USD140 in June 2008. It was USD70 this week. That is not a store of value. Since that 2008 date it has also hit a low of USD19.8. In the last year values have got from USD111 to USD70. There is no logical argument for using something as volatile as this as a reserve currency.
Quote from: smelmoth on May 05, 2023, 05:55:27 PM
Quote from: Smokin Joe on May 04, 2023, 09:38:40 PM
Quote from: smelmoth on May 04, 2023, 09:40:02 AM
Quote from: Smokin Joe on May 04, 2023, 07:47:13 AM
Quote from: smelmoth on May 04, 2023, 07:30:54 AM
Quote from: Smokin Joe on May 04, 2023, 07:04:03 AM
I don't see much risk to the US$ not being the currency that is used the most throughout the world.
However, I can see it's days as being the world's reserve asset (ie countries save the majority of their surpluses in US Treasuries) being numbered. Gold will go back to being a bigger part of countries storing their savings, note it hit an all time high valuation yesterday with the continued difficulty of US regional banks, as will Bitcoin (not "Crypto", but Bitcoin). The valuation of gold will have to rise significantly in price if it is used to settle net trading accounts as the energy trading surpluses / defecits are many multiples of the value of the gold being produced.
The change didn't start with the US sanctioning Russia's FX reserves, but it certainly accelerated the speed of this change.
Energy producers have known for some time that it doesn't make any sense for them to store the profits of their energy sales in US Treasuries when their fossil fuels are finite yet the value of the USD decreases every year due to inflation. They would literally be safer keeping their excess exports in the ground as it will hold it's purchasing power better for future years. But storing their reserves in gold is different as gold has historically kept its value compared to the price of oil; something the USD definitely hasn't done in the last 40 / 50 years.
Would tracking oil prices be good?
Oil prices are 50% of what they were in 2007. And 3 years ago they were 13% of their 2007 value. I can only imagine the consequences of sovereign wealth fluctuating like that. I think that is one of the reasons why oil producing countries have tried to invest in alternative assets.
It's certainly better than the historical alternative, storing their profits in US Treasuries as oil has increased from $2 per barrel to what is now a low of $67 (and occassionally over $100 per barrel)
Are you for real?
If you invested to hold in 2007 and your chosen store of wealth was oil then today you would have lost 50% of your capital and received no income in the intervening 15 years. The comforting news being 3 years ago you would have lost 87% of your capital.
You are stating that USD has done worse. What are the numbers you are using?
OK, you chose 2007, so I'm not picking the time comparison.
In 2007 you could buy approx 10 barrels of oil for ounce of gold (source: https://www.macrotrends.net/1380/gold-to-oil-ratio-historical-chart) and today you can buy 26 barrels of oil for an ounce of gold, so gold has increased in value by 2.6 times vs oil.
In USD terms in 2007 a barrel of oil cost cost approx $70 per barrel which is pretty much the same price as today. So the USD has stayed at parity vs oil since 2007.
This is what I mean by a net exporting country is much better to store their reserves in gold than US Treasuries as it maintains their purchasing power of real life commodities much better than USD does. Yes, you forego an interest, but the interest you receive is less than the underlying currency is being devalued by.
This isn't just my opinion, in a speech Putin gave in June last year he said:
"According to the IMF, global currency reserves are at $7.1 trillion and 2.5 trillion euros now. These reserves are devalued at an annual rate of about 8 percent. Moreover, they can be confiscated or stolen any time if the United States dislikes something in the policy of the states involved. ...
According to analyst estimates, and this is an objective analysis, a conversion of global reserves will begin just because there is no room for them with such shortages. They will be converted from weakening currencies into real resources like food, energy commodities and other raw materials. Other countries will be doing this, of course. Obviously, this process will further fuel global dollar inflation."
Crude oil was USD140 in June 2008. It was USD70 this week. That is not a store of value. Since that 2008 date it has also hit a low of USD19.8. In the last year values have got from USD111 to USD70. There is no logical argument for using something as volatile as this as a reserve currency.
You misundertand my point. I am talking about oil exporting nations (ie they generate surpluses) storing their excess "profits" in gold, as opposed to USD which is what they have done since 1971 when the US went off the gold standard. Storing them in USD is pointless as it doesn't keep up with the price of oil. Gold, on the other hand, does.
More and more nations are reducing their holdings of USTs as reserve assets and replacing them with holding physical gold.
Quote from: Smokin Joe on May 05, 2023, 06:11:13 PM
Quote from: smelmoth on May 05, 2023, 05:55:27 PM
Quote from: Smokin Joe on May 04, 2023, 09:38:40 PM
Quote from: smelmoth on May 04, 2023, 09:40:02 AM
Quote from: Smokin Joe on May 04, 2023, 07:47:13 AM
Quote from: smelmoth on May 04, 2023, 07:30:54 AM
Quote from: Smokin Joe on May 04, 2023, 07:04:03 AM
I don't see much risk to the US$ not being the currency that is used the most throughout the world.
However, I can see it's days as being the world's reserve asset (ie countries save the majority of their surpluses in US Treasuries) being numbered. Gold will go back to being a bigger part of countries storing their savings, note it hit an all time high valuation yesterday with the continued difficulty of US regional banks, as will Bitcoin (not "Crypto", but Bitcoin). The valuation of gold will have to rise significantly in price if it is used to settle net trading accounts as the energy trading surpluses / defecits are many multiples of the value of the gold being produced.
The change didn't start with the US sanctioning Russia's FX reserves, but it certainly accelerated the speed of this change.
Energy producers have known for some time that it doesn't make any sense for them to store the profits of their energy sales in US Treasuries when their fossil fuels are finite yet the value of the USD decreases every year due to inflation. They would literally be safer keeping their excess exports in the ground as it will hold it's purchasing power better for future years. But storing their reserves in gold is different as gold has historically kept its value compared to the price of oil; something the USD definitely hasn't done in the last 40 / 50 years.
Would tracking oil prices be good?
Oil prices are 50% of what they were in 2007. And 3 years ago they were 13% of their 2007 value. I can only imagine the consequences of sovereign wealth fluctuating like that. I think that is one of the reasons why oil producing countries have tried to invest in alternative assets.
It's certainly better than the historical alternative, storing their profits in US Treasuries as oil has increased from $2 per barrel to what is now a low of $67 (and occassionally over $100 per barrel)
Are you for real?
If you invested to hold in 2007 and your chosen store of wealth was oil then today you would have lost 50% of your capital and received no income in the intervening 15 years. The comforting news being 3 years ago you would have lost 87% of your capital.
You are stating that USD has done worse. What are the numbers you are using?
OK, you chose 2007, so I'm not picking the time comparison.
In 2007 you could buy approx 10 barrels of oil for ounce of gold (source: https://www.macrotrends.net/1380/gold-to-oil-ratio-historical-chart) and today you can buy 26 barrels of oil for an ounce of gold, so gold has increased in value by 2.6 times vs oil.
In USD terms in 2007 a barrel of oil cost cost approx $70 per barrel which is pretty much the same price as today. So the USD has stayed at parity vs oil since 2007.
This is what I mean by a net exporting country is much better to store their reserves in gold than US Treasuries as it maintains their purchasing power of real life commodities much better than USD does. Yes, you forego an interest, but the interest you receive is less than the underlying currency is being devalued by.
This isn't just my opinion, in a speech Putin gave in June last year he said:
"According to the IMF, global currency reserves are at $7.1 trillion and 2.5 trillion euros now. These reserves are devalued at an annual rate of about 8 percent. Moreover, they can be confiscated or stolen any time if the United States dislikes something in the policy of the states involved. ...
According to analyst estimates, and this is an objective analysis, a conversion of global reserves will begin just because there is no room for them with such shortages. They will be converted from weakening currencies into real resources like food, energy commodities and other raw materials. Other countries will be doing this, of course. Obviously, this process will further fuel global dollar inflation."
Crude oil was USD140 in June 2008. It was USD70 this week. That is not a store of value. Since that 2008 date it has also hit a low of USD19.8. In the last year values have got from USD111 to USD70. There is no logical argument for using something as volatile as this as a reserve currency.
You misundertand my point. I am talking about oil exporting nations (ie they generate surpluses) storing their excess "profits" in gold, as opposed to USD which is what they have done since 1971 when the US went off the gold standard. Storing them in USD is pointless as it doesn't keep up with the price of oil. Gold, on the other hand, does.
More and more nations are reducing their holdings of USTs as reserve assets and replacing them with holding physical gold.
How did gold do as a store of value between 1980 and the millennium? Has it much of a store of value then?
Quote from: smelmoth on May 06, 2023, 01:37:42 PM
Quote from: Smokin Joe on May 05, 2023, 06:11:13 PM
Quote from: smelmoth on May 05, 2023, 05:55:27 PM
Quote from: Smokin Joe on May 04, 2023, 09:38:40 PM
Quote from: smelmoth on May 04, 2023, 09:40:02 AM
Quote from: Smokin Joe on May 04, 2023, 07:47:13 AM
Quote from: smelmoth on May 04, 2023, 07:30:54 AM
Quote from: Smokin Joe on May 04, 2023, 07:04:03 AM
I don't see much risk to the US$ not being the currency that is used the most throughout the world.
However, I can see it's days as being the world's reserve asset (ie countries save the majority of their surpluses in US Treasuries) being numbered. Gold will go back to being a bigger part of countries storing their savings, note it hit an all time high valuation yesterday with the continued difficulty of US regional banks, as will Bitcoin (not "Crypto", but Bitcoin). The valuation of gold will have to rise significantly in price if it is used to settle net trading accounts as the energy trading surpluses / defecits are many multiples of the value of the gold being produced.
The change didn't start with the US sanctioning Russia's FX reserves, but it certainly accelerated the speed of this change.
Energy producers have known for some time that it doesn't make any sense for them to store the profits of their energy sales in US Treasuries when their fossil fuels are finite yet the value of the USD decreases every year due to inflation. They would literally be safer keeping their excess exports in the ground as it will hold it's purchasing power better for future years. But storing their reserves in gold is different as gold has historically kept its value compared to the price of oil; something the USD definitely hasn't done in the last 40 / 50 years.
Would tracking oil prices be good?
Oil prices are 50% of what they were in 2007. And 3 years ago they were 13% of their 2007 value. I can only imagine the consequences of sovereign wealth fluctuating like that. I think that is one of the reasons why oil producing countries have tried to invest in alternative assets.
It's certainly better than the historical alternative, storing their profits in US Treasuries as oil has increased from $2 per barrel to what is now a low of $67 (and occassionally over $100 per barrel)
Are you for real?
If you invested to hold in 2007 and your chosen store of wealth was oil then today you would have lost 50% of your capital and received no income in the intervening 15 years. The comforting news being 3 years ago you would have lost 87% of your capital.
You are stating that USD has done worse. What are the numbers you are using?
OK, you chose 2007, so I'm not picking the time comparison.
In 2007 you could buy approx 10 barrels of oil for ounce of gold (source: https://www.macrotrends.net/1380/gold-to-oil-ratio-historical-chart) and today you can buy 26 barrels of oil for an ounce of gold, so gold has increased in value by 2.6 times vs oil.
In USD terms in 2007 a barrel of oil cost cost approx $70 per barrel which is pretty much the same price as today. So the USD has stayed at parity vs oil since 2007.
This is what I mean by a net exporting country is much better to store their reserves in gold than US Treasuries as it maintains their purchasing power of real life commodities much better than USD does. Yes, you forego an interest, but the interest you receive is less than the underlying currency is being devalued by.
This isn't just my opinion, in a speech Putin gave in June last year he said:
"According to the IMF, global currency reserves are at $7.1 trillion and 2.5 trillion euros now. These reserves are devalued at an annual rate of about 8 percent. Moreover, they can be confiscated or stolen any time if the United States dislikes something in the policy of the states involved. ...
According to analyst estimates, and this is an objective analysis, a conversion of global reserves will begin just because there is no room for them with such shortages. They will be converted from weakening currencies into real resources like food, energy commodities and other raw materials. Other countries will be doing this, of course. Obviously, this process will further fuel global dollar inflation."
Crude oil was USD140 in June 2008. It was USD70 this week. That is not a store of value. Since that 2008 date it has also hit a low of USD19.8. In the last year values have got from USD111 to USD70. There is no logical argument for using something as volatile as this as a reserve currency.
You misundertand my point. I am talking about oil exporting nations (ie they generate surpluses) storing their excess "profits" in gold, as opposed to USD which is what they have done since 1971 when the US went off the gold standard. Storing them in USD is pointless as it doesn't keep up with the price of oil. Gold, on the other hand, does.
More and more nations are reducing their holdings of USTs as reserve assets and replacing them with holding physical gold.
How did gold do as a store of value between 1980 and the millennium? Has it much of a store of value then?
Anyone can cherry pick a date range where you can make most things look good or bad. I was trying to be constructive and explain how the USD is seeing a reduction in its use as a global reserve asset.
Maybe the Central Banks that are stacking gold instead of USTs have it wrong as there is an aribtrary period over which gold decreases in value against oil: https://twitter.com/LukeGromen/status/1641431605452369921
Quote from: Smokin Joe on May 06, 2023, 04:57:57 PM
Quote from: smelmoth on May 06, 2023, 01:37:42 PM
Quote from: Smokin Joe on May 05, 2023, 06:11:13 PM
Quote from: smelmoth on May 05, 2023, 05:55:27 PM
Quote from: Smokin Joe on May 04, 2023, 09:38:40 PM
Quote from: smelmoth on May 04, 2023, 09:40:02 AM
Quote from: Smokin Joe on May 04, 2023, 07:47:13 AM
Quote from: smelmoth on May 04, 2023, 07:30:54 AM
Quote from: Smokin Joe on May 04, 2023, 07:04:03 AM
I don't see much risk to the US$ not being the currency that is used the most throughout the world.
However, I can see it's days as being the world's reserve asset (ie countries save the majority of their surpluses in US Treasuries) being numbered. Gold will go back to being a bigger part of countries storing their savings, note it hit an all time high valuation yesterday with the continued difficulty of US regional banks, as will Bitcoin (not "Crypto", but Bitcoin). The valuation of gold will have to rise significantly in price if it is used to settle net trading accounts as the energy trading surpluses / defecits are many multiples of the value of the gold being produced.
The change didn't start with the US sanctioning Russia's FX reserves, but it certainly accelerated the speed of this change.
Energy producers have known for some time that it doesn't make any sense for them to store the profits of their energy sales in US Treasuries when their fossil fuels are finite yet the value of the USD decreases every year due to inflation. They would literally be safer keeping their excess exports in the ground as it will hold it's purchasing power better for future years. But storing their reserves in gold is different as gold has historically kept its value compared to the price of oil; something the USD definitely hasn't done in the last 40 / 50 years.
Would tracking oil prices be good?
Oil prices are 50% of what they were in 2007. And 3 years ago they were 13% of their 2007 value. I can only imagine the consequences of sovereign wealth fluctuating like that. I think that is one of the reasons why oil producing countries have tried to invest in alternative assets.
It's certainly better than the historical alternative, storing their profits in US Treasuries as oil has increased from $2 per barrel to what is now a low of $67 (and occassionally over $100 per barrel)
Are you for real?
If you invested to hold in 2007 and your chosen store of wealth was oil then today you would have lost 50% of your capital and received no income in the intervening 15 years. The comforting news being 3 years ago you would have lost 87% of your capital.
You are stating that USD has done worse. What are the numbers you are using?
OK, you chose 2007, so I'm not picking the time comparison.
In 2007 you could buy approx 10 barrels of oil for ounce of gold (source: https://www.macrotrends.net/1380/gold-to-oil-ratio-historical-chart) and today you can buy 26 barrels of oil for an ounce of gold, so gold has increased in value by 2.6 times vs oil.
In USD terms in 2007 a barrel of oil cost cost approx $70 per barrel which is pretty much the same price as today. So the USD has stayed at parity vs oil since 2007.
This is what I mean by a net exporting country is much better to store their reserves in gold than US Treasuries as it maintains their purchasing power of real life commodities much better than USD does. Yes, you forego an interest, but the interest you receive is less than the underlying currency is being devalued by.
This isn't just my opinion, in a speech Putin gave in June last year he said:
"According to the IMF, global currency reserves are at $7.1 trillion and 2.5 trillion euros now. These reserves are devalued at an annual rate of about 8 percent. Moreover, they can be confiscated or stolen any time if the United States dislikes something in the policy of the states involved. ...
According to analyst estimates, and this is an objective analysis, a conversion of global reserves will begin just because there is no room for them with such shortages. They will be converted from weakening currencies into real resources like food, energy commodities and other raw materials. Other countries will be doing this, of course. Obviously, this process will further fuel global dollar inflation."
Crude oil was USD140 in June 2008. It was USD70 this week. That is not a store of value. Since that 2008 date it has also hit a low of USD19.8. In the last year values have got from USD111 to USD70. There is no logical argument for using something as volatile as this as a reserve currency.
You misundertand my point. I am talking about oil exporting nations (ie they generate surpluses) storing their excess "profits" in gold, as opposed to USD which is what they have done since 1971 when the US went off the gold standard. Storing them in USD is pointless as it doesn't keep up with the price of oil. Gold, on the other hand, does.
More and more nations are reducing their holdings of USTs as reserve assets and replacing them with holding physical gold.
How did gold do as a store of value between 1980 and the millennium? Has it much of a store of value then?
Anyone can cherry pick a date range where you can make most things look good or bad. I was trying to be constructive and explain how the USD is seeing a reduction in its use as a global reserve asset.
Maybe the Central Banks that are stacking gold instead of USTs have it wrong as there is an aribtrary period over which gold decreases in value against oil: https://twitter.com/LukeGromen/status/1641431605452369921
but you do accept that during that significant period that gold collapsed in value and it wasn't a last minute collapse it was a relentless steady erosion of value?
Quote from: smelmoth on May 06, 2023, 09:32:33 PM
Quote from: Smokin Joe on May 06, 2023, 04:57:57 PM
Quote from: smelmoth on May 06, 2023, 01:37:42 PM
Quote from: Smokin Joe on May 05, 2023, 06:11:13 PM
Quote from: smelmoth on May 05, 2023, 05:55:27 PM
Quote from: Smokin Joe on May 04, 2023, 09:38:40 PM
Quote from: smelmoth on May 04, 2023, 09:40:02 AM
Quote from: Smokin Joe on May 04, 2023, 07:47:13 AM
Quote from: smelmoth on May 04, 2023, 07:30:54 AM
Quote from: Smokin Joe on May 04, 2023, 07:04:03 AM
I don't see much risk to the US$ not being the currency that is used the most throughout the world.
However, I can see it's days as being the world's reserve asset (ie countries save the majority of their surpluses in US Treasuries) being numbered. Gold will go back to being a bigger part of countries storing their savings, note it hit an all time high valuation yesterday with the continued difficulty of US regional banks, as will Bitcoin (not "Crypto", but Bitcoin). The valuation of gold will have to rise significantly in price if it is used to settle net trading accounts as the energy trading surpluses / defecits are many multiples of the value of the gold being produced.
The change didn't start with the US sanctioning Russia's FX reserves, but it certainly accelerated the speed of this change.
Energy producers have known for some time that it doesn't make any sense for them to store the profits of their energy sales in US Treasuries when their fossil fuels are finite yet the value of the USD decreases every year due to inflation. They would literally be safer keeping their excess exports in the ground as it will hold it's purchasing power better for future years. But storing their reserves in gold is different as gold has historically kept its value compared to the price of oil; something the USD definitely hasn't done in the last 40 / 50 years.
Would tracking oil prices be good?
Oil prices are 50% of what they were in 2007. And 3 years ago they were 13% of their 2007 value. I can only imagine the consequences of sovereign wealth fluctuating like that. I think that is one of the reasons why oil producing countries have tried to invest in alternative assets.
It's certainly better than the historical alternative, storing their profits in US Treasuries as oil has increased from $2 per barrel to what is now a low of $67 (and occassionally over $100 per barrel)
Are you for real?
If you invested to hold in 2007 and your chosen store of wealth was oil then today you would have lost 50% of your capital and received no income in the intervening 15 years. The comforting news being 3 years ago you would have lost 87% of your capital.
You are stating that USD has done worse. What are the numbers you are using?
OK, you chose 2007, so I'm not picking the time comparison.
In 2007 you could buy approx 10 barrels of oil for ounce of gold (source: https://www.macrotrends.net/1380/gold-to-oil-ratio-historical-chart) and today you can buy 26 barrels of oil for an ounce of gold, so gold has increased in value by 2.6 times vs oil.
In USD terms in 2007 a barrel of oil cost cost approx $70 per barrel which is pretty much the same price as today. So the USD has stayed at parity vs oil since 2007.
This is what I mean by a net exporting country is much better to store their reserves in gold than US Treasuries as it maintains their purchasing power of real life commodities much better than USD does. Yes, you forego an interest, but the interest you receive is less than the underlying currency is being devalued by.
This isn't just my opinion, in a speech Putin gave in June last year he said:
"According to the IMF, global currency reserves are at $7.1 trillion and 2.5 trillion euros now. These reserves are devalued at an annual rate of about 8 percent. Moreover, they can be confiscated or stolen any time if the United States dislikes something in the policy of the states involved. ...
According to analyst estimates, and this is an objective analysis, a conversion of global reserves will begin just because there is no room for them with such shortages. They will be converted from weakening currencies into real resources like food, energy commodities and other raw materials. Other countries will be doing this, of course. Obviously, this process will further fuel global dollar inflation."
Crude oil was USD140 in June 2008. It was USD70 this week. That is not a store of value. Since that 2008 date it has also hit a low of USD19.8. In the last year values have got from USD111 to USD70. There is no logical argument for using something as volatile as this as a reserve currency.
You misundertand my point. I am talking about oil exporting nations (ie they generate surpluses) storing their excess "profits" in gold, as opposed to USD which is what they have done since 1971 when the US went off the gold standard. Storing them in USD is pointless as it doesn't keep up with the price of oil. Gold, on the other hand, does.
More and more nations are reducing their holdings of USTs as reserve assets and replacing them with holding physical gold.
How did gold do as a store of value between 1980 and the millennium? Has it much of a store of value then?
Anyone can cherry pick a date range where you can make most things look good or bad. I was trying to be constructive and explain how the USD is seeing a reduction in its use as a global reserve asset.
Maybe the Central Banks that are stacking gold instead of USTs have it wrong as there is an aribtrary period over which gold decreases in value against oil: https://twitter.com/LukeGromen/status/1641431605452369921
but you do accept that during that significant period that gold collapsed in value and it wasn't a last minute collapse it was a relentless steady erosion of value?
Yes, if you take your starting point of 1980, which was a local high in the price of gold.
And do you accept that since 2008 (oh, and I wonder what might have happened then to change the dynamics of financial markets) that gold has been on a continual rise?
There is a clear rise of central banks storing their surpluses in gold since 2013, or do you think they aren't?