My name is Shawn Ozbun, and our goal is to keep you up to date with what’s going on in the world of Gold and Silver by providing you with current news and precious metals pricing.
The Silvertowne Vault Cast is brought to you by www.Silvertowne.com
Today I’m going to be asking a question, and the question is, what will happen to the US dollar when other countries start rejecting the US dollar as the reserve currency? If you have an opinion or a thought about this then I encourage you to share those thoughts in the comment section of our YouTube channel or in the iTunes store.
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Now lets go ahead and get into today's precious metals pricing!
Gold - $1726.55 up $6.93
Silver - $33.91 up $.15
Platinum - $1615 up $13.50
Palladium - $674.16 up $8.58
Financial News
The Giant Currency Superstorm That Is Coming To The Shores Of America When The Dollar Dies
By recklessly printing, borrowing and spending money, our authorities are absolutely shredding confidence in the U.S. dollar. The rest of the world is watching this nonsense, and at some point they are going to give up on the U.S. dollar and throw their hands up in the air. When that happens, it is going to be absolutely catastrophic for the U.S. economy. Right now, we export a lot of our inflation. Each year, we buy far more from the rest of the world than they buy from us, and so the rest of the world ends up with giant piles of U.S. dollars. This works out pretty well for them, because the U.S. dollar is the primary reserve currency of the world and is used in international trade far more than any other currency is. Back in 1999, the percentage of foreign exchange reserves in U.S. dollars peaked at 71 percent, and since then it has slid back to 62.2 percent. But that is still an overwhelming amount. We can print, borrow and spend like crazy because the rest of the world is there to soak up our excess dollars because they need them to trade with one another. But what will happen someday if the rest of the world decides to reject the U.S. dollar? At that point we would see a tsunami of U.S. dollars come flooding back to this country. Just take a moment and think of the worst superstorm that you can possibly imagine, and then replace every drop of rain with a dollar bill. The giant currency superstorm that will eventually hit this nation will be far worse than that. Most Americans don't realize that there are far more dollars in use in the rest of the world than in the United States itself. Read More...
Gold Convertibility and Reserve Currencies
Lately we have seen many articles about China and many other central banks continuing to buy and increase their holdings of gold as part of their effort to continue diversifying out of foreign paper currencies. Who can blame them? Would you want to hold paper promises to pay off financial obligations from countries that are essentially bankrupt as a part of your currency reserve? China is doing what is the right thing and in the best interest of China, buying more gold to hold as a part of your reserves in order to make your currency more marketable. They want to make the yuan a competing currency to the other major currencies around the world and they will succeed and owning gold is part of their strategy.
There is some speculation that China is increasing its gold holding to make the yuan a gold-backed currency in an effort to make it a world currency reserve. While it is an interesting concept, it will most likely never happen. In order to back a currency, their gold holdings must increase or decrease alongside the increase or decrease in the number of currency units in the system. A gold backed currency would entail having a fixed rate of convertibility for each ounce of gold to a specific number currency units issued by that country. There is probably no country in the world that will honour convertibility on a fixed basis, it would be financial suicide and is part of the reason why Nixon closed the gold window. Also having a gold backed currency would mean the country would be continually increasing gold purchases to match the inflation of currency units issued. Tracking the amount of gold that is backing currency would also be next to impossible since there is a complete lack of transparency around the amount of currency units being issued by central banks and the amount of gold held by them. Currently currencies can be converted to gold on a floating basis at market price, but going to a gold backed currency would likely never happen. Read More...
Gold Heads for Biggest Loss in Three Weeks on U.S. Economic Data
Gold headed for the biggest drop in more than three weeks on speculation that improving U.S. economic data will curb demand for the metal as a protection of wealth.
Reports showed yesterday that consumer confidence in the U.S. rose to a four-year high and home prices gained by the most since 2010. U.S. Senate Majority Leader Harry Reid said he is “disappointed” in the lack of progress in talks to avoid the fiscal cliff of spending cuts and tax increases in January. Gold-backed exchange-traded-product holdings reached a record.
“Despite on-going concerns over looming public spending cuts and tax hikes into 2013, macro numbers in the U.S. remain relatively positive,” Andrey Kryuchenkov, an analyst at VTB Capital in London, wrote today in a report. “Market participants will remain cautious about adding to their already substantial longs, given bullish U.S. data like yesterday,” he said, referring to bets on higher gold prices. Read More...
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[Disclaimer] Shawn Ozbun is not a licensed financial adviser, there is risk associated with all investment including gold and silver. You should seek advise from a licensed financial expert before making a purchase.
