De-Dollarisation.

[Manny]

Andrew, Manny gold is priced in US dollars.

No.

Trading in gold is older than America. 

[WestCoast]

Andrew, Manny gold is priced in US dollars.

No.

Trading in gold is older than America. 

Oil and its uses and the trading of oil is also older than the US, but we all that's priced in US dollars.

[andrewfi]

The pricing in gold as dollars is what enables Russia and China to dump their dollars. 

However, one can choose to value and sell the stuff in whatever currency takes your fancy. I can buy gold in Euros, or sterling, or pesos. A move away from using the dollar as an intermediary currency for gold dealing would, just as is happening to the dollar and oil (petrodollar), mean that each dollar NOT used for a transaction previously intermediated by the dollar is a dollar that ends up back in the United States.

Each dollar that is added to the US economy without a corresponding increase in productivity in the US means that the value of ALL dollars in the national economy is diluted - that means that there is a general price rise so that all the dollars are used up and put to work - that is inflation for you. Every exported dollar is exported inflation. That exported inflation has been like a tax on the global economy - except for the US which received the taxation as a discount on all purchase made around the world.

Now, one is forced to wonder how it can be that the US economy is soooo inefficient that even with all those exported dollars, trillions and trillions of the buggers, that the US STILL has debts of trillions and trillions of dollars as well. And yes, there is something of a circularity here because some of the debt is also exported dollars but, even so, the clear implication is that US productivity is very, very poor. Now, this is not a surprise, it has been known about for decades but nobody really bothered as the system kinda worked on a global basis. Now, well, it is broken.

So, where is that inefficiency?
There's probably two main areas that spring to mind, but there will be many more:
the military, which eats money and gives nothing back
corruption which is a dead weight on the economy (again circularity because the military industrial complex is probably the engine of the greatest volume of that corruption)

People talk of corruption in Russia - it ain't NOTHING in comparison to the US.

[WestCoast]

The pricing in gold as dollars is what enables Russia and China to dump their dollars. 

However, one can choose to value and sell the stuff in whatever currency takes your fancy. I can buy gold in Euros, or sterling, or pesos.

True, you can buy gold in, for example, euros. The price is quoted in USDs and then converted to euros.

A move away from using the dollar as an intermediary currency for gold dealing would, just as is happening to the dollar and oil (petrodollar), mean that each dollar NOT used for a transaction previously intermediated by the dollar is a dollar that ends up back in the United States.

Andrew where are you getting the idea that USD used to by oil in, for example Germany, means that the USD ends up back in the US? USDs printed in the US are sent to banks all over the world. There's no rule that says they must return to the US, other than for destruction and even that might be done overseas.

Each dollar that is added to the US economy without a corresponding increase in productivity in the US means that the value of ALL dollars in the national economy is diluted - that means that there is a general price rise so that all the dollars are used up and put to work - that is inflation for you. Every exported dollar is exported inflation. That exported inflation has been like a tax on the global economy - except for the US which received the taxation as a discount on all purchase made around the world.

Total rubbish. Please explain how someone buying USD priced gold in Paris results taxes on the global economy?

Now, one is forced to wonder how it can be that the US economy is soooo inefficient that even with all those exported dollars, trillions and trillions of the buggers, that the US STILL has debts of trillions and trillions of dollars as well. And yes, there is something of a circularity here because some of the debt is also exported dollars but, even so, the clear implication is that US productivity is very, very poor. Now, this is not a surprise, it has been known about for decades but nobody really bothered as the system kinda worked on a global basis. Now, well, it is broken.

So, where is that inefficiency?
There's probably two main areas that spring to mind, but there will be many more:
the military, which eats money and gives nothing back
corruption which is a dead weight on the economy (again circularity because the military industrial complex is probably the engine of the greatest volume of that corruption)

People talk of corruption in Russia - it ain't NOTHING in comparison to the US.

My God Andrew what a total load of BS. Have you been practicing your BS creation in my absence? Not a single reference to back up anything you've posted. A true load of BS.

[cufflinks]

Hmm I might be missing something but each dollar that comes back to the USA Fed and Treasury is a dollar available to Mr. Trump to build a wall and rebuild American Infrastructure; transport, STEM and Energy - Productivity Problem solved to the tune of 30 Million+ new US jobs.

Works for me.

[Donhollio]

My God Andrew what a total load of BS. Have you been practicing your BS creation in my absence? Not a single reference to back up anything you've posted. A true load of BS.

 Andy stop with the lies! Get on Skype and talk to your mate about making a better counter offensive to your dishonesty and fabrication of this web of deceit you've tangled yourself in.

 Westy he has been running wild here while you were away enriching your life, can't say the same about Andy though.  Moby trounces him when the Andy gets dishonest, but the guy never knows when to stop pecking away at the PC. We tolerate him and value his words much like newspaper is used in the bird cage.

[AvHdB]

Andrew, I am curious is there some one who pays you to be stupid? 

While your post #152 has some truth in it, the majority is so fallacious that it boggles common sense. Congratulations. 

[JeanClaude]

Russia has just traded US dollars for a commodity traded in US dollars. Russia still has $100 million in US dollars, Russia has simply traded US dollars for a commodity priced and traded in US dollars.

What kind of total nonsense is this, gold is priced in USD/EUR/GBP/CHF because the mayor vaults are located in New York, London, Zurich, Frankfurt.

[JeanClaude]

Hmm I might be missing something

Yeah you are missing somthing.

but each dollar that comes back to the USA Fed and Treasury is a dollar available to Mr. Trump to build a wall and rebuild American Infrastructure;

Jesus H Christ, another Zimbabwen economist   (or Kenyan? lol)   The whole point of the global reserve currency is having the whole planet pay the "inflation tax" of the USD. Dollars going back to he US is very very bad for the US. ... and very very very good for the rest of the planet.

[AvHdB]

Russia has just traded US dollars for a commodity traded in US dollars. Russia still has $100 million in US dollars, Russia has simply traded US dollars for a commodity priced and traded in US dollars.

What kind of total nonsense is this, gold is priced in USD/EUR/GBP/CHF because the mayor vaults are located in New York, London, Zurich, Frankfurt.

I think some are confused by Andrew assertion and that of Westy there are different values being applied. The benchmark price for the majority of commodities are set in a preferred currency. With oil and gold it is US dollars. From there it is converted to what ever currency you wish to pay with.

Think about it; if there would multiple chances to earn (and loss) massive amounts of money if the price was set in different currencies that change in value on a daily basis. We are talking about a financial Tower of Babel.

While the assumption of Manny that Russia would like to see a different foundation to the US Dollar. It is at this time two steps backward and one step forward.

I would throw out something that perhaps many will disagree with and have far differing views and standpoints. PERHAPS a de-Dollarisation would not be such a bad thing for the US. But I suspect it will not China, Russia or India that will lead this but something along the lines of bit-coin.

[WestCoast]

Russia has just traded US dollars for a commodity traded in US dollars. Russia still has $100 million in US dollars, Russia has simply traded US dollars for a commodity priced and traded in US dollars.

What kind of total nonsense is this, gold is priced in USD/EUR/GBP/CHF because the mayor vaults are located in New York, London, Zurich, Frankfurt.

I think some are confused by Andrew assertion and that of Westy there are different values being applied. The benchmark price for the majority of commodities are set in a preferred currency. With oil and gold it is US dollars. From there it is converted to what ever currency you wish to pay with.

Think about it; if there would multiple chances to earn (and loss) massive amounts of money if the price was set in different currencies that change in value on a daily basis. We are talking about a financial Tower of Babel.

While the assumption of Manny that Russia would like to see a different foundation to the US Dollar. It is at this time two steps backward and one step forward.

I would throw out something that perhaps many will disagree with and have far differing views and standpoints. PERHAPS a de-Dollarisation would not be such a bad thing for the US. But I suspect it will not China, Russia or India that will lead this but something along the lines of bit-coin.

AvHdB you're correct, that's probably one of the reasons why gold and other commodities are priced in US dollars. The USD is the most trusted currency, it's global and most everyone and every company and country has access to it. Not so with the ruble or yuan.

Before the age of everything being computerized the rich and connected were able to use a technique called arbitrage to make a quick buck on the price difference in a commodity such as gold. There'd occasionally be a difference in the price of a commodity such as gold quoted in, for example, London and in New York. Buy at the low price in NYC and sell at the high price in London and the price difference is all profit (minus fees of course). To do this one had to have lots of money and connections, meaning the rich got richer.

In today's computerized, globally connected markets that's not supposed to be possible but there still has to be a commonly agreed upon currency for the commodity to be quoted in. Some currency that everyone can agree upon and that isn't being manipulated at the whim of a government. Currently for many commodities, but not all, that's the USD.

[AvHdB]

I tried to keep it simple, words like arbitrage might confound Andrew or Jean Claude.

[Manny]

I suspect it will not China, Russia or India that will lead this but something along the lines of bit-coin.

China and Russia are already leading the de-dollarisation movement. Read the links referenced in the article on post one.

[Markje]

Andrew, Manny gold is priced in US dollars.

No.

Trading in gold is older than America. 

Oil and its uses and the trading of oil is also older than the US, but we all that's priced in US dollars.

Gold is priced in all currencies in the world, but if you want to get rid of dollars, it makes sense to use them to buy gold.

[AvHdB]

Andrew, Manny gold is priced in US dollars.

No.

Trading in gold is older than America. 

Oil and its uses and the trading of oil is also older than the US, but we all that's priced in US dollars.

Gold is priced in all currencies in the world, but if you want to get rid of dollars, it makes sense to use them to buy gold.

Mark, You are correct, but try to pay for your groceries at Albert with a chunk of gold. Av

[Manny]

Try and pay for your groceries in Europe in dollars - they will laugh you out of the store.

[Markje]

Mark, You are correct, but try to pay for your groceries at Albert with a chunk of gold. Av

Try to buy them with Dollars. Equally moot point.

[Manny]

A rather good article on de-dollarisation here: http://journal-neo.org/2015/02/02/rus-dedollarizatsiya-i-ssha/

[andrewfi]

Avhdb, many folks, including you don't seem to get the difference between a thing of value and a piece of paper.
The dollar is currency, it has no intrinsic value. There is nothing 'backing' the dollar.
While one might choose to discuss why gold should be seen as having intrinsic value there is no doubt that our global civilisation does imbue gold with intrinsic value.

So, actually, if one were to wander into a shop with an enterprising owner and spend enough money then the chances are the owner would accept gold, at a suitable margin.

For the last 35 years I have worn and always traveled with a gold bracelet. The thing was given to me as a gift. I was not then, nor am I now, one given to wearing jewelry. And, given that it has my name engraved upon it, I am not known to be, yet, needing to be reminded of my name.

The purpose of the bracelet was to provide me with the ability to always be able to buy a flight ticket from wherever I was to wherever I needed to be.

Even if currency fails us that object will still carry value. The dollar or any other current would, in extremis, be useless. I can always find a buyer for my gold, I know from first hand experience that the same is absolutely not the case for currency.

[WestCoast]

Avhdb, many folks, including you don't seem to get the difference between a thing of value and a piece of paper.
The dollar is currency, it has no intrinsic value. There is nothing 'backing' the dollar.
While one might choose to discuss why gold should be seen as having intrinsic value there is no doubt that our global civilisation does imbue gold with intrinsic value.

So, actually, if one were to wander into a shop with an enterprising owner and spend enough money then the chances are the owner would accept gold, at a suitable margin.

For the last 35 years I have worn and always traveled with a gold bracelet. The thing was given to me as a gift. I was not then, nor am I now, one given to wearing jewelry. And, given that it has my name engraved upon it, I am not known to be, yet, needing to be reminded of my name.

The purpose of the bracelet was to provide me with the ability to always be able to buy a flight ticket from wherever I was to wherever I needed to be.

Even if currency fails us that object will still carry value. The dollar or any other current would, in extremis, be useless. I can always find a buyer for my gold, I know from first hand experience that the same is absolutely not the case for currency.

Andrew you've had an experience when your gold was more easily sold than legitimate currency? Currency such as the US dollar, the euro or the UK pound? I can see gold being more easily sold than say the Zimbabwean dollar or some other currency under pressure from inflation but not any major global currency.

Please Andrew let's here your tale where your gold was more easily liquidated than the US dollar, euro or UK pound.

[JeanClaude]

The dollar is currency, it has no intrinsic value. There is nothing 'backing' the dollar.

Any fiat currency has VALUE, because the guns of the state say so! (aka you are required to pay taxes in said currency, so you need to acquire it).

[Anteros]

Avhdb, many folks, including you don't seem to get the difference between a thing of value and a piece of paper.
The dollar is currency, it has no intrinsic value. There is nothing 'backing' the dollar.
While one might choose to discuss why gold should be seen as having intrinsic value there is no doubt that our global civilisation does imbue gold with intrinsic value.

So, actually, if one were to wander into a shop with an enterprising owner and spend enough money then the chances are the owner would accept gold, at a suitable margin.

For the last 35 years I have worn and always traveled with a gold bracelet. The thing was given to me as a gift. I was not then, nor am I now, one given to wearing jewelry. And, given that it has my name engraved upon it, I am not known to be, yet, needing to be reminded of my name.

The purpose of the bracelet was to provide me with the ability to always be able to buy a flight ticket from wherever I was to wherever I needed to be.

Even if currency fails us that object will still carry value. The dollar or any other current would, in extremis, be useless. I can always find a buyer for my gold, I know from first hand experience that the same is absolutely not the case for currency.

Jewelry is scrap gold; which is what is your bracelet is. Only Bullion has real value during an economic crisis.  Were there to be a total economic unraveling as bad or worse than 2008, you will quickly learn how little value scrap gold has as you wait in a very long line with all the other persons desperate to sell scrap gold.  Those having official mint Bullion will be whisked to the front of the line and quickly get a high value for what they wish to sell.

In regards to your silly comment that the US dollar has nothing backing it I suggest you go back to College and learn what it means to have the largest economy in the World as well as the most powerful military in the World.

The USA can and will seize any and all oil fields and any other valuable commodities we wish to should the need arise.

[Anteros]

The dollar is currency, it has no intrinsic value. There is nothing 'backing' the dollar.

Any fiat currency has VALUE, because the guns of the state say so! (aka you are required to pay taxes in said currency, so you need to acquire it).

Correct.  Besides the fact that our fractional reserve system backs up our currency with real Gold deposits as well as the power of the most dynamic economy in the World.

[Manny]

In regards to your silly comment that the US dollar has nothing backing it I suggest you go back to College and learn what it means to have the largest economy in the World

Yes, lets ask China. 

as well as the most powerful military in the World.

Is that why Putin has to go in and sort out the camel jockeys for you?

[andrewfi]

There's another two who don't know what they are going on about.
At least Jean Claude understands the basis upon which a Fiat currency operates - that is: it is what it is because we say it is.
There is no underlying asset against which one piece of paper can be exchanged. There used to be: gold.

Here's an easy to understand article that explains what paper money is and why the US dollar has no inherent value - nothing 'backing it'.
http://www.hitxp.com/articles/economics/promise-pay-bearer-currency-history-federal-bank/

It is sad, very sad, that people with such strong opinions basis them upon such a poor foundation of knowledge.

By the way,  Ant,  one of the singular benefits of gold is that it does not oxidise or break down. That immutability is the underlying basis of our choice to imbue gold with the import which we do. Of course I know that i can not sell that bracelet for the same price per ounce as I could as part of a good delivery bar. But unlike almost any portable asset it can be assayed and valued easily almost anywhere and have value to a buyer almost anywhere. Try flogging your watch,  in extremis, and see what happens 'but it's a Rolex' you whine as you get offered a cup of coffee for its exchange.