The trouble with too many gold coins, the weight would tear a hole in your pocket. Imagine going up an elevator and all your gold coins rolling down to the next level.
Opinion Robert Burgess https://www.bloomberg.com/opinion/a...rong-dollar-good-for-stocks?srnd=premium-asia The Strong Dollar Is About to Pay Some Dividends Faith in the currency draws capital to the US in tumultuous times and will cushion asset price declines. The pound’s slide is a reminder of the benefits of Robert Rubin’s strong dollar stance. Photographer: Matt Cardy/Getty Images Europe By Robert Burgess 25 September 2022 In times like these I’m reminded of Robert Rubin. The former US Treasury Secretary in the Clinton administration was unequivocal that a strong dollar was in the country’s best interests, and the government should be careful not to undermine trust in the currency. The UK’s plan to ignite growth with tax cuts and borrowings has knocked down the pound and sparked fears of capital flight. With a federal budget deficit of more than 3% of gross domestic product, no one would call the US fiscally conservative. But it increasingly looks like the cleanest of the dirty shirts among major economies. That’s reflected in the greenback. The Bloomberg Dollar Index that measures the currency against its major peers rose by the most since March 2020 at one point on Friday, extending its gain since the middle of last year to more than 17%. Other measures put the dollar at its strongest in two decades. The knee-jerk reaction would be that the currency’s appreciation is hurting exports by making American goods more expensive on the world stage. The Trump administration at times suggested that the dollar was too strong, and a weaker currency would benefit the US by boosting exports and cutting the trade deficit. Such notions lose sight of the true benefits of the dollar being a dependable store of value. The assurance attracts foreign capital, which services America’s budget and trade deficits while keeping a relative lid on borrowing costs. Just last week, the Treasury Department said foreign holdings of US Treasuries and related securities rose by $70.4 billion in July to $7.50 trillion. The amount foreigners own has climbed 50% over the last decade, despite increased borrowing and bigger deficits. US companies also benefit from faith in the dollar, which can be seen in stock valuations. Although share prices have suffered mightily this year as inflation accelerated and the Federal Reserve raised interest rates, investors are putting a premium on US companies relative to their global counterparts. At about 18.6 times, the MSCI US Index’s price-to-earnings ratio exceeds the 11.1 times of the MSCI All-Country World Index excluding the US. The current gap of 7.5 is wider than the typical 4 to 5 in the years prior to the pandemic, according to data compiled by Bloomberg. Traders are betting the dollar’s rise is far from over. Bullish positioning among hedge funds and other large speculators is about eight times higher than the average of the past two decades, Commodity Futures Trading Commission data show. The dollar has been the world’s reserve currency since the US and its allies agreed at the 1944 Bretton Woods conference to peg it to a rate of $35 per ounce of gold. According to the International Monetary Fund, the dollar’s share of global reserves stands at 58.9%, far above the euro at 20.1%. After the euro, there’s a steep drop to No. 3 — Japan’s yen at 5.36%. While the dollar’s share has declined in recent years from about 70%, it’s still comfortably above the lows of around 45% in the early 1990s. The benefit to holding dollars is that US markets are so much deeper and more liquid than any other. At $23 trillion, the US Treasury market is more than double the size of Japan's government bond market. And even if you wanted to buy so-called JGBs, you probably couldn’t because the Bank of Japan owns the vast majority, so much so that there’s no JGB trading on some days. As for Europe, the UK, French, Italian and German bond markets are all smaller than $3 trillion. And while America’s brand of democracy can seem messy at times — especially in recent years — foreign investors take comfort in the country’s adherence to the rule of law that draws capital from all around the world in good times and bad. When global foreign-direct investment flows surged 77% to an estimated $1.65 trillion in 2021, the US experienced an even bigger 114% jump to $323 billion, according to the United Nations Conference on Trade and Development. All this doesn’t mean that a bad year for financial assets can’t get worse. What it does mean is that the US is likely to be the beneficiary of turmoil in markets elsewhere, as global investors seek refuge in dollars. That will cushion the downside in financial assets. As Rubin said, a strong dollar is always in America’s best interests.
Gold and silver can be used as a very inconvenient form of money, but as a sovereign currency fiat isn't just better, it's much better.
It has now become so much more than a US-only inflation fighting story, but a global currency crisis with all major currencies crashing against USD, making Europe and Asia vulnerable to capital flights, especially Europe given China and Japan have capital controls (they do exist in Japan under the surface). When the currency crisis narrative surfaces (surfacing), people will start talking about the Euro crisis and Asian financial crisis, weakening sentiment further. The Fed is not just sinking US risk assets, but begetting a global financial crisis whilst a potential nuclear war
Dollar is strong becasue its in a 3rd wave up. No other reasons matter. Not even because Nitrene came in thru' the bathroom window
%% Good points; how would i know what Mr B Gates has in silver + gold + farmland?? Me, i like US $$, some silver, farmland, guns + ammo, guns, cash savings, full tank of gas in hurricane season, Roth account, some dividend ETfs,, occasional inverse ETFs, [empty brass + other metals also/LOL]; One metals dealer /talking his book; said someone that owns US dollars + no silver or gold coins= is like someone that goes to WMT + at the cashier gives her the coffee + walks off with the coffee label. LOL He trades silver +_ gold for US $$/LOL......................................................................
China tells state banks to prepare for a massive dollar dump and yuan buying spree as Beijing's prior interventions have failed to stem its currency's worst year since 1994 Phil Rosen 22 hours ago https://markets.businessinsider.com...rency-markets-economy-beijing-fed-hike-2022-9 Chinese President Xi Jinping. Kevin Frayer/Getty Images Reuters reported that China told state-owned banks to get ready to sell dollars and buy yuan in an effort to prop up the local currency. The move could stem the yuan's fall, as it remains on track for its largest annual loss against the dollar since 1994. A hawkish Fed has pushed the dollar to 20-year highs this year, pressuring currencies around the world. The People's Bank of China has told major state-run banks to prepare to shed dollar holdings while snapping up offshore yuan, which has continued to fall despite prior interventions, sources told Reuters. The scale of this latest effort to prop up the yuan will be big and could provide a floor to the Chinese currency, according to the report. The amount of dollars to be sold hasn't been decided yet, but Reuters said it will primarily involve the state banks' currency reserves. Their offshore branches, including those based in Hong Kong, New York and London, were ordered to review offshore yuan holdings and check to see that dollar reserves are ready. On Thursday, the yuan fell 0.9% to 7.1340 against the dollar and is on track for its worst annual decline since 1994, having lost more than 11% so far this year. Earlier this week, China's offshore yuan this week depreciated to a record-low against the greenback, and its domestic unit fell to its weakest level since the 2008 financial crisis. The Federal Reserve's hawkish policy path has bolstered the dollar to 20-year highs this year, putting pressure on other central banks and triggering a "reverse currency war." While a weaker currency can sometimes be beneficial, as it means exports get cheaper, the yuan's recent decline below the psychological threshold of 7-per-dollar has raised concerns. The People's Bank of China has consistently imposed a strong bias to its currency reference rate to help support the yuan. Central bank officials have also issued verbal warnings against speculating on the yuan and increased the cost of shorting the currency. But it has refrained from raising benchmark rates and instead has been easing them in an effort to spark growth in an economy that's been dragged down by COVID-19 lockdowns, a real estate crash, and supply chain snags.
No amount of intervention can alter an extant TREND direction. At best Chino will only succeed in throwing some potholes in King Dollar's path. Their efforts will be in vain. Only the KING hsself can bestow goodies on Chino by correcting as expected ................... Then the audience will say, "Look Ma, Chino caused King to correct!" Yeah, deeg eet Mahn, let's have sum Rum & coke