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Showing posts with label dumping dollars. Show all posts
Showing posts with label dumping dollars. Show all posts

Friday, December 16, 2016

Turkey's stabilization of the Lira came by dumping dollars and having their citizens rush into gold

Earlier today a new report out showed that China continued dumping dollars in November at the rate of $30 billion, taking their 12 month totals to $404 billion.  At the same time, demand for gold has skyrocketed in China where premiums on the metal are ranging between $50 - $800 per ounce.

And now we are discovering that Turkey's recent call for their citizens to get rid of their dollars and either buy gold or Lira has resulted in a slowdown in the devaluation of their currency, and a stabilization of the Lira over a short period of time.

Asked by their President Recep Tayyip Erdogan to shun the dollar, Turks are favoring gold over liras. 
On the face of it, the appeal to defend the Turkish currency worked. It arrested the biggest three-week surge in foreign-currency deposits since August as Turks drew down a net $450 million from these accounts in the week ended Dec. 9. But residents also boosted their precious metal holdings, traditionally denominated in dollars, by $700 million, a hint that confidence in their currency remains tenuous, according to Nomura Inc. - Bloomberg Markets
Gold demand around the world has been red hot over the past month as confidence in nearly all currencies falls to decades long lows.  And contrary to the dollar's recent moves over 103 on the dollar index, much of this has been due to nations like China, Turkey, Belgium and others dumping Treasuries and their dollars reserves.

As governments look towards creating policies to try to ban cash as a way to protect their dying monetary systems, more and more people are realizing that the current fiat money system that has been prevalent around the world since the 1970's is collapsing around them.  And those that are agile enough to move out of their devaluing currencies and into a sounder form of money such as gold before the supply becomes completely unaffordable, are the ones who will, just like what is slowly taking place in Turkey, be prepared during this emerging currency and banking crisis where even the dollar is no longer safe.

Friday, May 20, 2016

Global central banks buy gold for 21st straight month as dumping of dollars continues to accelerate

For the 21st straight month, central banks around the world having been buying physical gold as a way to protect their currencies, and create monetary reserves that are not based on dollar assets.

The rush to replace dollars has become a high priority, especially for emerging nations, as the reserve currency loses much of its luster.  In fact, since the beginning of the year foreigners have dumped $123 billion in U.S. Treasuries which is the largest amount in the first three months of a year since 1978.
Led by Russia, central banks remained strong buyers of gold in the first quarter of the year purchasing 109 tonnes. This represents the 21st consecutive quarter that central banks have been net purchasers of gold as they continue to diversify away from the US dollar according to the latest World Gold Council report. 
Despite the steady buying most developing countries still hold less than 10% of their reserves in gold, compared to 60% or more in places like the US, Germany and Greece. The much higher share in developed economies is mainly a legacy of the Gold Standard, but but even the European Central Bank, established long after the introduction of fiat currencies, holds more than 25% of its reserves in gold. - Mining.com
What this also means is that sometime very soon, the price of gold will have to be revalued higher to act as a backstop for the world's massive debt currently held by most of the above central banks.  And this in turn will be the catalyst for not only using gold as a monetary reserve for debt, but as an eventual backstop for currencies that are screaming for real assets to once again be the standard for money rather than simply sovereign confidence.

March saw global central banks dump dollars at a record clip

Since the middle of 2015, global central banks have been dumping Treasuries and other dollar reserves at record levels to accommodate a number of different needs within their own monetary policies.  For some like China, the dumping of dollars has helped the Far East economy protect their currency and ensure exports remain at the lowest costs achievable.  And for nations like Russia and Saudi Arabia, the selling of dollars has been a necessity to boost their budgets during the advent of low oil prices.
But perhaps the biggest reason behind the dumping of dollars en masse by central banks has been the rush out of the reserve currency, which is becoming less a requirement now that direct bi-lateral trade has returned to the global economy.
Dollar
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Wednesday, April 27, 2016

As gold replaces the dollar as the world's new safe haven, the U.S. currency's chances of collapse are skyrocketing

Since the beginning of the year there has been not just a reversal in market sentiment for gold and silver, but a complete sea change in what is the right safe haven to move one's assets into.  Prior to January of 2016, the U.S. dollar was by far the currency in which central banks and foreigners put their money to protect against their own monetary policies of devaluation.  But as gold broke through its five year Bear market technicals in January, the dichotomy between the rise of the precious metal and the decline of the dollar has become much more profound.

Gold Chart

Dollar Chart

And in an interview today with esteemed statistician John Williams, the creator of ShadowStats.com said that not only are foreigners dumping their dollars in increasing levels, but the direction of this trend has the potential to collapse the dollar as trillions in currency holdings are being sent back by nations who no longer have confidence in the global reserve.
We have started to see selling pressure on the dollar.  It has been inching lower.  It’s down year to year now. . . . The selling is going to intensify, not only with large central banks, but with corporations that will be beginning to dump their Treasury holdings. . . . Nobody wants to be the last one out the door when you have a panic like this.  It’s not a panic yet, but the potential certainly is there.” 
Williams also says, “The dollar will blow up, and when I say blow up, it will collapse. There will be panic selling of the dollar, and that will intensify the inflation.  The problem is they don’t have a way of avoiding it.  If they could somehow get the economy back on track, they would have some room to work, I think, but the economy has never recovered.  That’s being seen now in these revisions.  At the end of this week, we are going to see bench mark revisions to retail sales. . . . So, you are going to see some downside revisions to the retail sales.  You already have it with industrial production, and now you are going to have it with retail sales.  We are very close to turning negative with the first quarter GDP . . . We are in a recession now, and they would be inclined to call it that once they get a contracting GDP, and everything else is beginning to show that. . . . You are going to see a formal recession declaration not too far down the road.  It hasn’t happened yet, but it will.” - USA Watchdog

Monday, April 18, 2016

Saudi’s pressure Washington not reveal classified 9/11 documents by threatening to dump dollars

As the White House ponders unclassifying 28 pages of the 9/11 commission report that may or may not implicate Saudi involvement in the terror attacks on New York City, the Saudi government on April 16 threatened Washington with dumping hundreds of billions in dollar assets as a punishment if they revealed to the public the contents of those pages.
For a long time, Saudi Arabia is believed to have been directly involved in the attacks on 9/11, with 15 of the 18 terrorists being from and funded by the Saudi Kingdom.
Saudi Arabia has told the Obama administration and members of Congress that it will sell off hundreds of billions of dollars’ worth of American assets held by the kingdom if Congress passes a bill that would allow the Saudi government to be held responsible in American courts for any role in the Sept. 11, 2001, attacks.
The Obama administration has lobbied Congress to block the bill’s passage, according to administration officials and congressional aides from both parties, and the Saudi threats have been the subject of intense discussions in recent weeks between lawmakers and officials from the State Department and the Pentagon. The officials have warned senators of diplomatic and economic fallout from the legislation. - New York Times
911-attacks

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Monday, March 28, 2016

Did the world declare war on the dollar at the G20 summit?

On March 24, economist Jim Rickards published an interesting analysis of something that may have taken place last month at the G20 Summit in Shanghai, China.  According to evidence that Rickards and others pieced together, a secret conclave occurred between members tied to the IMF’s SDR basket of currencies, and appears to have ordered a hit on the dollar to devalue it at a time when the global economy is falling fast into heavy recession.
And judging by the dollar chart from February 26 (time of the summit) to one month later, something has occurred which has caused the dollar to experience its biggest decline since the middle of last year.
dollar chart
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Thursday, March 17, 2016

Foreigners dump dollars in January at the highest rate on record

From August of last year through December, foreigners dumped more than $550 billion in dollar based assets as the demise of the petrodollar in global trade continues to expand.  And as we begin 2016, a new report out for January shows that more treasuries were dumped in that month alone than in any month on record.
The previous high of $48.1 billion in treasuries sent back to the U.S. was shattered in January as foreigners dumped their dollars at a rate of $57.2 billion.  Much of this was tied to country’s using their dollar reserves to shore up their own currencies, but a large part also included less need for dollars to purchase oil and other commodities as the global economy moved strongly into recession.

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Tuesday, December 22, 2015

Everyone rushing to dump U.S. dollars as October sees decline of almost $150 billion

A new report came out on Dec. 15 from the U.S. Treasury Department showing the overall foreign holdings of U.S. Treasuries and dollar based reserve instruments.  And for the month of October, nearly $150 billion was divested from global accounts, and marks the biggest dumping of dollars in any month of this year.
A combination of the acceptance and expansion of the Yuan currency, and the need for nations to protect their economies by dissolving their reserves are primarily to account for this dollar dumping.  And it is expected that when we get to see November and December’s numbers by the Treasury Department, the selloff will be much greater as more options become available for nations to transact outside the reserve currency.

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Thursday, December 10, 2015

China dumps more dollars, holds reserves at lowest level in nearly three years

As China continues to prepare and expand the Yuan for full internationalization, there is less and less need for them to hold massive amounts of dollars as a reserve for their financial system.  And while the Chinese central bank has rightly chosen not to dump their treasuries onto the market in one massive sale, their slow dissolution of their dollar reserves has the country holding the fewest it has held in almost three years.
In November, China dumped another $87.2 billion in treasuries and t-bills, dropping their overall reserves to $3.44 trillion, which is their lowest level since February of 2013.

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