Orderly reduction of US$ holdings. . .

derryb

. . . so far. This is one of the fundamental reasons to be in PMs and not in dollars.

a currency crisis that the Fed won't be able to stop

Baley

by "dollars" do you mean federal reserve notes/bank balances, or do you mean any asset denominated in dollars, except for PMs?

because you make it sound like those are the only 2 choices to "be in".. and if everyone took your advice and left everything and went all in metals, wouldn't that pretty much end the economy?

or, since, obviously, cash and precious metals are only two of many stores of wealth, assets, investments, whatever you want to call things of value, do you advocate being "in" any other things such as stocks, real estate, other commodities, other currencies, other tangible assets, bonds, anything at all?

I don't know many investors who keep all their risk capital in cash equivalents, will nothing do well in the future, besides metals, in your view? Metals over everything?

Or just metals over dollars?

jmski52

by "dollars" do you mean federal reserve notes/bank balances, or do you mean any asset denominated in dollars, except for PMs?

because you make it sound like those are the only 2 choices to "be in".. and if everyone took your advice and left everything and went all in metals, wouldn't that pretty much end the economy?

or, since, obviously, cash and precious metals are only two of many stores of wealth, assets, investments, whatever you want to call things of value, do you advocate being "in" any other things such as stocks, real estate, other commodities, other currencies, other tangible assets, bonds, anything at all?

I don't know many investors who keep all their risk capital in cash equivalents, will nothing do well in the future, besides metals, in your view? Metals over everything?

Or just metals over dollars?

Baley, you're starting to understand. Bravo. Keep in mind that nobody "wants" to trash the economy. Anyhow, that's already being done by the administration. And would you be trashing the economy, or just the corrupt banking system?

People will still transact whether or not the banks are siphoning off your money or not. People will still go to work unless there is no reward in doing so. The system is being CHANGED so that the reward for productive work will be shrinking dramatically. The new LAWS haven't been implemented, but they are REAL. We can continue to debate this after the 2013 tax year.

You still have an education and skills. Your company will still transact. The distinction is that the banks don't need your investment dollars in order to generate capital anymore. They just create their own.

We have debt that is unsustainable on all levels. I would contend that an individual has no way to protect his assets from a confiscatory (and rigged) banking & governmental system unless he puts distance between himself and their paper creations. This WOULD include the asset classes you mentioned - "other things such as stocks, real estate, other commodities, other currencies, other tangible assets, bonds, anything at all"

I would also contend that the nominal valuations for these real assets will be wildly volatile in the forseeable future - but only in nominal dollar terms. I do think that there's a wierdly imaginary financial structure in place, and that it's days are numbered. Sure, stocks rallied in the Great Depression and they will rally again. If you can trust the financial institutions that deal in stocks, all is good. I just happen to think that it's not so good for individuals in most paper markets until real integrity returns. That's not now.

derryb

PMs vs. dollars? My only advice is to do your research and make your own decisions. It should be clear by now where I stand on the issue - I have little faith that those controlling the dollar are acting in the best interst of those whose financial future is dependent on the value of the dollar. Consider my sharing of links and personal opinions to be nothing more than stimulus for those interested in discussing the pros and cons of PMs - after all, this is the PM forum.

Baley

thanks, both of you. I wouldn't query and enjoy your posts if I didn't care about the subject matter or respect your views

ricko

I learn something here every day... Cheers, RickO

derryb

<< <i>thanks, both of you. I wouldn't query and enjoy your posts if I didn't care about the subject matter or respect your views >>


and I appreciate you making me think twice (sometimes three times) about my pessimistic opinion.

jmski52

Yep, Baley. You provide good counterpoints, and that makes a good test for any pro vs. con analysis.

Timbuk3

Thanks for the information, interesting !!!

cohodk

I fail to see where China has reduced its holdings. Perhaps increasing at a slower rate, but still increasing.

China's holdings of U.S securities edged up 7% up to $1.73 trillion as of June 30, translating into an increase of $115 billion from 12 months earlier

roadrunner

<< <i>I fail to see where China has reduced its holdings. Perhaps increasing at a slower rate, but still increasing.

China's holdings of U.S securities edged up 7% up to $1.73 trillion as of June 30, translating into an increase of $115 billion from 12 months earlier >>



It's dollars/ longer term Bonds/notes where this issue is relevant. Saw a bar graph yesterday in an article concerning China's growth in gold and decrease in liquid paper assets.
It was quite clear that gold has essentially been growing as a % of reserves each and every year for some time now. China may well be buying US securities/stocks if they
believe there is an inflationary booster lit under them. Seems to be a lot of forecasts for 13,500-14,000+ later this year, an outcome of not so well hidden QE3 (M2 in 2011),
QE4 (Trill+ US to Euro currency swaps during 2011 crisis) and now $700 BILL in EU bank support via LTRO EU/IMF/Fed (QE5)

Chinese longer term TBond/note holdings lowest since June 2010

Apparently they are buying short term debt as they lower long term debt. Then again, we have to believe what the Chinese put in print.

Chinese % of US dollar holdings falls from 75% to 54% from 2002 - 2011

cohodk

My point is that if China increased their gold holdings from 1% to 2%, the the headlines would scream, "China Doubles Gold Reserves". So China reduces the rate of increase of dollar holdings and the story talks about the "dollar going out". Me thinks this is wishful thinking, rather than accurate reporting. But hey, this is why they are called blogs, which rhymes with bogs, which may contain quicksand.

roadrunner

China has significantly reduced their dollar holdings and more than doubled their gold holdings. I don't see any room for debate there. They've probably tripled
their gold holdings. But based on the furor they caused when reporting the near doubling to 1054 tons a couple of yrs back, I don't think they're going to make that
mistake again. Annually they are absorbing the 350 tons or so produced from Chinese mines and importing hundreds of tonnes more. That doesn't include what their
citizens are socking away. I'd guesstimate they are increasing CB gold holdings by 600-1000 tonnes per year.

jmski52

China's reduction of US Bond holdings.

cohodk

<< <i>China's reduction of US Bond holdings. >>



Current holdings appear to be the same as last winter and more than March. They bought and sold over the last year. I see no systematic reduction in holdings.

Remember, this is China's savings account. Maybe to keep their economy rolling they need to dip into savings? Would that mean they are DUMPING the USA? I dont think so. China NEEDS the USA and EUROPE more they we need them, and they know it. I wouldnt be suprised to see a huge increase in EURO holdings as the Chinese look to bail out Europe. A small investment of $300 billion into the European coffers would pay handsomely to keep the Chinese economy rolling and the Chinese people working.


I've been hearing this "China selling" garbage for years, yet go back and look at the data and you will see that Chinas holdings increase every year.