Gold collapsing. Bitcoin UP.

[molecular]

USD back over 80.  Yo Baby!

USDX doesn't mean much about the value of the currency (just an indicator to see how USD is doing against EUR, JPY, GBP and others)
Nice comex open so far 

+1. USD "performance" (together with other FIAT) should simply be measured against some sensible commodity basked (gold/silver/crude/corn/bitcoin. Maybe the VEN) in order to fullfill the meaning most people use USDX for (namely as a measure for the general strength of the Dollar).

USDX is just an indicator of how far ahead the FED is of other central banks in the "race to the bottom" (see. Beggar thy Neighbor)

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[silverbox]

Whats that magic number again Cypher?  1793??

[cypherdoc]

Whats that magic number again Cypher?  1793??

it is 1793.  can u get it sustainably above that?  it won't turn me into a bull tho.  just less bearish.

[Dusty]

I've seen no vast coverage of this turn of events that should be relevant for the dollar, what do you guys think about it?

Dollar no longer primary oil currency as China begins to sell oil using Yuan

On Sept. 11, Pastor Lindsey Williams, former minister to the global oil companies during the building of the Alaskan pipeline, announced the most significant event to affect the U.S. dollar since its inception as a currency. For the first time since the 1970's, when Henry Kissenger forged a trade agreement with the Royal house of Saud to sell oil using only U.S. dollars, China announced its intention to bypass the dollar for global oil customers and began selling the commodity using their own currency.

indsey Williams: "The most significant day in the history of the American dollar, since its inception, happened on Thursday, Sept. 6. On that day, something took place that is going to affect your life, your family, your dinner table more than you can possibly imagine."

"On Thursday, Sept. 6... just a few days ago, China made the official announcement. China said on that day, our banking system is ready, all of our communication systems are ready, all of the transfer systems are ready, and as of that day, Thursday, Sept. 6, any nation in the world that wishes from this point on, to buy, sell, or trade crude oil, can do using the Chinese currency, not the American dollar. - Interview with Natty Bumpo on the Just Measures Radio network, Sept. 11

This announcement by China is one of the most significant sea changes in the global economic and monetary systems, but was barely reported on due to its announcement taking place during the Democratic convention last week. The ramifications of this new action are vast, and could very well be the catalyst that brings down the dollar as the global reserve currency, and change the entire landscape of how the world purchases energy.

[ The article continues ]

[tvbcof]

I've seen no vast coverage of this turn of events that should be relevant for the dollar, what do you guys think about it?

Dollar no longer primary oil currency as China begins to sell oil using Yuan
...

I'd say that it is just a matter of time before we 'do' Iran (up to the mountains, at least.)  Hopefully it won't start WWW-III, but a lot of countries have demographic issues which may be considered something of a silver lining by various leaderships.  Given a choice between ouster by an angry populous which has outgrown the carrying capacity of the environment (be it nutritional or financial), or leadership over a smaller population, I suspect that many leaderships would choose the latter.

[kjj]

I've seen no vast coverage of this turn of events that should be relevant for the dollar, what do you guys think about it?

Dollar no longer primary oil currency as China begins to sell oil using Yuan

FOREX.  Look it up.  The currency of settlement for oil purchases is unimportant.

[molecular]

I've seen no vast coverage of this turn of events that should be relevant for the dollar, what do you guys think about it?

Dollar no longer primary oil currency as China begins to sell oil using Yuan

FOREX.  Look it up.  The currency of settlement for oil purchases is unimportant.

Can you explain this as if I was a five-year old?

[tvbcof]

I've seen no vast coverage of this turn of events that should be relevant for the dollar, what do you guys think about it?

Dollar no longer primary oil currency as China begins to sell oil using Yuan

FOREX.  Look it up.  The currency of settlement for oil purchases is unimportant.

Can you explain this as if I was a five-year old?

Simple assertions of fact are the most effective way to communicate with those who have underdeveloped minds (by virtue of age and other issues...)  That is a likely factor in explaining why they are so popular in certain branches of the political thought.  It drives us progressives up the wall, but what can ya do?

For what it's worth, I studied this paper a decade ago now and it had a profound (and highly beneficial) impact on my investment strategies since that time.  Does it have a basis in truth?  Dunno.  To me the arguments seem to have a high degree of power in explaining some events which otherwise seem quite baffling.

  http://www.ratical.org/ratville/CAH/RRiraqWar.html

[kjj]

I've seen no vast coverage of this turn of events that should be relevant for the dollar, what do you guys think about it?

Dollar no longer primary oil currency as China begins to sell oil using Yuan

FOREX.  Look it up.  The currency of settlement for oil purchases is unimportant.

Can you explain this as if I was a five-year old?

Say that you could only trade oil for dollars.  If an oil-buyer didn't have dollars, they'd have to buy some, using whatever they do have, to use to buy oil.  If an oil-seller doesn't want to hold dollars, they'll have to sell the dollars they get from the sale in order to get whatever it is that they do want.

So, if the buyer can get dollars just before the purchase, and the seller can get rid of them just after the purchase, where could a net demand for dollars possibly come from?  It can only come from the desire to hold dollars.

[notme]

I've seen no vast coverage of this turn of events that should be relevant for the dollar, what do you guys think about it?

Dollar no longer primary oil currency as China begins to sell oil using Yuan

FOREX.  Look it up.  The currency of settlement for oil purchases is unimportant.

Can you explain this as if I was a five-year old?

Say that you could only trade oil for dollars.  If an oil-buyer didn't have dollars, they'd have to buy some, using whatever they do have, to use to buy oil.  If an oil-seller doesn't want to hold dollars, they'll have to sell the dollars they get from the sale in order to get whatever it is that they do want.

So, if the buyer can get dollars just before the purchase, and the seller can get rid of them just after the purchase, where could a net demand for dollars possibly come from?  It can only come from the desire to hold dollars.

Assuming the purchase takes 0 time.  Here in reality where everything takes nonzero time there will always be a certain amount tied up because of in-progress transactions.  This creates a net demand which will disappear when other currencies are used.  Sure, it's small compared to the total transactions over a longer period, but it is not insignificant.

[labestiol]

So you think oil exporters don't pile up some USD ? I would think so.
What if they pile up everything in treasuries, what's the effect on USD ?

[tvbcof]

So you think oil exporters don't pile up some USD ? I would think so.
What if they pile up everything in treasuries, what's the effect on USD ?

The best analogy I've heard is that one can write as many checks as one likes as long as one has confidence that the recipient won't cash them.  Offering to disrupt someone's energy supply in the case of China, or allow their kingdoms to be undone in the case of the Saudis, is a pretty powerful incentive to induce them to keep piling up treasuries even if interest does not keep pace with inflation and it is kind of obvious that they will never be repaid.  The effect is the same as the US getting a discount on oil (among other things) and we could use it since the military machine (which makes things possible in the first place) is a big consumer.

I believe that there is some level of accuracy to the scenario I've layed out above.  It's been breaking down a bit, but QE can fill in the gaps.  I see things as tenuous and any geo-political miscalculations could go very bad very fast.  OTOH, if well managed things could go on in roughly the current form for decades.

I've thought for many years that the whole Iran thing has basically zero to do with nukes.  That issue is simply there as a rational to bomb at will, and is needed to pressure China.  The trouble with 'doing' Iran is that once it is done the pressure is gone.  We need replacements to serve this purpose before telling Israel to light the fuse, and we probably don't want China's only option to be all-out war as they have a lot of boots.  The pressure exists not in that we 'take' the oil, but rather that China does not end up with it due to disruptions.  It might be that the only practical way forward would be to actually take the oil this time so we can more efficiently direct supplies (vs. just bombing things to rubble which was desirable in Iraq in Gulf-I and Gulf-II in order to manipulate global supply and preserve future supplies.)

[SkRRJyTC]

Gold and silver are going to go under their lows from 5 days ago (~1740 or ~34), but not below major support at ~1650 or ~30, before continuing to higher highs.

Just thought I should put one of my predictions to the test as well as bashing Cypher's

[silverbox]

It's oh so close.. I so badly want to see it breech 1793 so that Cypher can turn that frown upside down!! 

Go Bulls!

[SkRRJyTC]

[cypherdoc]

silverbox update:

gold:  +6%

Bitcoin:  141%

diff:  135% advantage Bitcoin

gold not collapsing (yet).  i'll still stick with Bitcoin.

[silverbox]

Whats that magic number again Cypher?  1793??

it is 1793.  can u get it sustainably above that?  it won't turn me into a bull tho.  just less bearish.

It's ok, you can do it.. Just try it out.. Repeat after me "Gold is in a Bull Market"  "Gold prices in USD will rise" 

[cypherdoc]

Whats that magic number again Cypher?  1793??

it is 1793.  can u get it sustainably above that?  it won't turn me into a bull tho.  just less bearish.

It's ok, you can do it.. Just try it out.. Repeat after me "Gold is in a Bull Market"  "Gold prices in USD will rise" 

nope.  sorry.  can't do it.  like i said, i'll stick with my Bitcoin.  and you can stick with your tungsten.

[silverbox]

Whats that magic number again Cypher?  1793??

it is 1793.  can u get it sustainably above that?  it won't turn me into a bull tho.  just less bearish.

It's ok, you can do it.. Just try it out.. Repeat after me "Gold is in a Bull Market"  "Gold prices in USD will rise" 

nope.  sorry.  can't do it.  like i said, i'll stick with my Bitcoin.  and you can stick with your tungsten.

My Tungsten is where it belongs, in my shotgun shells

[tvbcof]

Whats that magic number again Cypher?  1793??

it is 1793.  can u get it sustainably above that?  it won't turn me into a bull tho.  just less bearish.

It's ok, you can do it.. Just try it out.. Repeat after me "Gold is in a Bull Market"  "Gold prices in USD will rise" 

nope.  sorry.  can't do it.  like i said, i'll stick with my Bitcoin.  and you can stick with your tungsten.

I'll stick with what was previously your gold

[I don't want to spoil the joke, but of course we both know that I, and I think all other PM bugs here, are also speculating in Bitcoin and will not be terribly heartbroken if we happen to make a killing on it.]