Options
The dollar vs. gold
derryb
Posts: 36,203 ✭✭✭✭✭
Why the dollar cannot be devalued and why gold is a threat
"Since the dollar is the reserve currency of all Central Banks in the world, all other currencies, the euro included, are only derivatives of the dollar. The proof of this statement is that the value of each and every currency in the world is calculated in dollars. The world's currencies are devalued or revalued against the dollar in the world's currency markets every day of the year."
"The US cannot declare an official devaluation of the dollar because there is nothing against which it may devalue, or rather, it does not wish to recognize the existence of gold as money, against which it might devalue. A rising price of gold does not devalue the dollar, because there is no official link between gold and the dollar. The world's monetary and financial systems have no link to gold. Gold can be any price without causing any effect upon those systems. We have seen gold at $1900 dollars per ounce, and things were running just as they were when gold was $300 dollars per ounce."
"Since the dollar is the reserve currency of all Central Banks in the world, all other currencies, the euro included, are only derivatives of the dollar. The proof of this statement is that the value of each and every currency in the world is calculated in dollars. The world's currencies are devalued or revalued against the dollar in the world's currency markets every day of the year."
"The US cannot declare an official devaluation of the dollar because there is nothing against which it may devalue, or rather, it does not wish to recognize the existence of gold as money, against which it might devalue. A rising price of gold does not devalue the dollar, because there is no official link between gold and the dollar. The world's monetary and financial systems have no link to gold. Gold can be any price without causing any effect upon those systems. We have seen gold at $1900 dollars per ounce, and things were running just as they were when gold was $300 dollars per ounce."
Keep an open mind, or get financially repressed -Zoltan Pozsar
0
Comments
Hard to argue with that.
Knowledge is the enemy of fear
I'll take the USdollar for $800, Alex.
and the appearance of it not being related to money value in some way, maybe it could actually go flat as well.
Keep an open mind, or get financially repressed -Zoltan Pozsar
I knew it would happen.
<< <i>As the article points out, China has seen this movie before and is planning accordingly. The dollar most certainly is being devalued. Not officially, because that would cause the politicians more headaches than their crappy policies have already caused - but if you truly think that the dollar isn't being devalued then it is you in the make-believe world, not someone who holds precious metals. >>
The article is pointing out that the dollar cannot be devalued, say overnight, by official decree. When it was tied to gold all it took was an announcement of a change in the "official" price of gold.
Keep an open mind, or get financially repressed -Zoltan Pozsar
I knew it would happen.
<< <i>what about revaluing gold?... >>
Anything can be revalued.
How about this scenerio, today an ounce of gold is worth about the same as a cow. One cow = one ounce gold. Now suppose we get the eagerly anticipated doomsday scenario and the grocery stores are empty. How much gold are you gonna have to pay to get that to feed your family? 1oz, 2 oz, 10 oz, or maybe no amount of gold could buy that cow? Gold could easily lose 1/2 its value overnight.
Knowledge is the enemy of fear
<< <i>One cow = one ounce gold. >>
Can you please translate to unsalted raw almonds!
<< <i>
<< <i>One cow = one ounce gold. >>
Can you please translate to unsalted raw almonds!
about 125 lbs
If gold is $20 per ounce or $2K, I can work on the spread.
Dollars are dollars. They work faster than checks or credit cards.
<< <i>what about revaluing gold?... >>
When the US quit redeeming gold for dollars it lost the power to set the price of gold. Gold is now revalued daily by the market.
Keep an open mind, or get financially repressed -Zoltan Pozsar
Keep an open mind, or get financially repressed -Zoltan Pozsar