Canada joins the dollar dumping team, signs a deal with China to bypass it

[pattu1]

Is there a dollar dumping team?
Looking at the USD reserves held outside the US, I think they are easily outnumbered by the dollar hoarding team.

[1714706741]

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[1714706741]

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[Lethn]

Is there a dollar dumping team?
Looking at the USD reserves held outside the US, I think they are easily outnumbered by the dollar hoarding team.

The problem is this 'majority' of holders doesn't have very much production and wealth coming from their countries so all they're really holding is paper, America took the gold of most of these countries ages ago in return for USD.

[worle1bm]

The problem is this 'majority' of holders doesn't have very much production and wealth coming from their countries so all they're really holding is paper,

Got any sources for this ridiculous statement?

[Lethn]

The problem is this 'majority' of holders doesn't have very much production and wealth coming from their countries so all they're really holding is paper,

Got any sources for this ridiculous statement?

Well you asked for it

https://www.youtube.com/watch?v=GxKvTepymxs

http://www.washingtonsblog.com/2013/01/the-real-reasons-that-germany-is-demanding-that-the-u-s-return-its-gold.html

http://nsnbc.me/2013/07/31/mystery-about-germany%C2%B4s-gold-in-the-us-solved/

If you knew anything about history, you'd know that at one time the dollar was backed by a 1:1 ratio of Gold and the same was to be the case for the other currencies and also a ratio on how much of a savers account can be lent out to a borrower. However now there are either very loose limits or no limits at all and we have absolutely no idea where necessarily all the precious metals have gone, even here in the UK Gordon Brown actually sold off 40% of the gold reserves so we don't know where that's gone off to either and as I said before Germany is trying to get it's gold back. Switzerland is also having a vote on the repatriation of it's gold to get it back because all the countries are now realising what America is up to and they're trying to find out what happened to their precious metals.

http://www.bbc.co.uk/blogs/legacy/thereporters/robertpeston/2008/03/gold_and_gordon_brown.html

ooooo! Found this little gem I'm going to do more background research on, gold reserve act of 1934

http://en.wikipedia.org/wiki/Gold_Reserve_Act

[worle1bm]

The problem is this 'majority' of holders doesn't have very much production and wealth coming from their countries so all they're really holding is paper,

Got any sources for this ridiculous statement?

Well you asked for it

https://www.youtube.com/watch?v=GxKvTepymxs

http://www.washingtonsblog.com/2013/01/the-real-reasons-that-germany-is-demanding-that-the-u-s-return-its-gold.html

This has nothing to do with your statement that "this 'majority' of holders doesn't have very much production and wealth coming from their countries" and it's some guys blog, which uses sources like Zero Hedge (hahahaha) and a hodge-podge of conspiracy sites. True quality.

http://nsnbc.me/2013/07/31/mystery-about-germany%C2%B4s-gold-in-the-us-solved/

This has nothing to do with your statement that "this 'majority' of holders doesn't have very much production and wealth coming from their countries"

If you knew anything about history, you'd know that at one time the dollar was backed by a 1:1 ratio of Gold and the same was to be the case for the other currencies and also a ratio on how much of a savers account can be lent out to a borrower. However now there are either very loose limits or no limits at all and we have absolutely no idea where necessarily all the precious metals have gone, even here in the UK Gordon Brown actually sold off 40% of the gold reserves so we don't know where that's gone off to either and as I said before Germany is trying to get it's gold back. Switzerland is also having a vote on the repatriation of it's gold to get it back because all the countries are now realising what America is up to and they're trying to find out what happened to their precious metals.

This has nothing to do with your statement that "this 'majority' of holders doesn't have very much production and wealth coming from their countries"

http://www.bbc.co.uk/blogs/legacy/thereporters/robertpeston/2008/03/gold_and_gordon_brown.html

This has nothing to do with your statement that "this 'majority' of holders doesn't have very much production and wealth coming from their countries"

ooooo! Found this little gem I'm going to do more background research on, gold reserve act of 1934

http://en.wikipedia.org/wiki/Gold_Reserve_Act

This has nothing to do with your statement that "this 'majority' of holders doesn't have very much production and wealth coming from their countries"

[dontCAREhair]

Is there a dollar dumping team?
Looking at the USD reserves held outside the US, I think they are easily outnumbered by the dollar hoarding team.

There are a very large number of countries that hold US dollars as the majority of their foreign currency reserves. I would say that more countries probably have some level of dollars in their reserves then do not hold dollars in their reserves

[Lethn]

This has nothing to do with your statement that "this 'majority' of holders doesn't have very much production and wealth coming from their countries"

It does, you're just choosing to ignore it all as I expected and you clearly have an incorrect or very little knowledge of currency history.

[picolo]

Is there a dollar dumping team?
Looking at the USD reserves held outside the US, I think they are easily outnumbered by the dollar hoarding team.

There are a very large number of countries that hold US dollars as the majority of their foreign currency reserves. I would say that more countries probably have some level of dollars in their reserves then do not hold dollars in their reserves

For a lot of central banks it is not about dumping Dollars but keeping the Dollar and Treasuries reserves to the same value while the total reserves increase and so do the total amount of Dollar that exist so it is very bearish for Dollar and for Treasuries

[troy112]

Is there a dollar dumping team?
Looking at the USD reserves held outside the US, I think they are easily outnumbered by the dollar hoarding team.

There are a very large number of countries that hold US dollars as the majority of their foreign currency reserves. I would say that more countries probably have some level of dollars in their reserves then do not hold dollars in their reserves

For a lot of central banks it is not about dumping Dollars but keeping the Dollar and Treasuries reserves to the same value while the total reserves increase and so do the total amount of Dollar that exist so it is very bearish for Dollar and for Treasuries

Every country reserves USD, even Russian! You have to otherwise there will be no imports! As you have to pay them in Dollars!

[BootstrapCoinDev]

More and more countries entering into direct currency trade with China. It's because they realize the US Dollar (it's actually the Federal Reserve Note) will soon become confetti. If you still want to sell things, watch the big hands at the table.

[Armadillo]

If the Yuan rises against the dollar, China will lose its only competitive advantage. All that slave labor won't be so attractive anymore.
I don't see a great drive for the Chinese oppressors to let that happen anytime soon.
Until China gets a decent intellectual base it will be stuck as a low cost producer. They are making progress and have a lot of our cash, but it takes time to build a generation of intelligentsia.

[picolo]

Running around in a panic? I've calculated this, all that's left for me now is to accumulate as many Bitcoins, Gold and Silver and in my case Gemstones as I can and I'll be pretty damn secure, it's the poor sods who actually listen to people like you who are in denial about the state of the economy that I'm worried about.

I could go through all the detail of the money supply and how currency is created but I seriously doubt you're going to pay any attention to that.

If you are thinking about a terrible collapse, alcohol and food can be a good thing to save; having a flat you are renting or Gold in a safe oversea is a good idea too.

[Robert Paulson]

Running around in a panic? I've calculated this, all that's left for me now is to accumulate as many Bitcoins, Gold and Silver and in my case Gemstones as I can and I'll be pretty damn secure, it's the poor sods who actually listen to people like you who are in denial about the state of the economy that I'm worried about.

I could go through all the detail of the money supply and how currency is created but I seriously doubt you're going to pay any attention to that.

If you are thinking about a terrible collapse, alcohol and food can be a good thing to save; having a flat you are renting or Gold in a safe oversea is a good idea too.

there won't be any shortage of food, the farmers are still there, the retail stores are still there.
its just they won't accept useless pieces of paper.

[picolo]

Running around in a panic? I've calculated this, all that's left for me now is to accumulate as many Bitcoins, Gold and Silver and in my case Gemstones as I can and I'll be pretty damn secure, it's the poor sods who actually listen to people like you who are in denial about the state of the economy that I'm worried about.

I could go through all the detail of the money supply and how currency is created but I seriously doubt you're going to pay any attention to that.

If you are thinking about a terrible collapse, alcohol and food can be a good thing to save; having a flat you are renting or Gold in a safe oversea is a good idea too.

there won't be any shortage of food, the farmers are still there, the retail stores are still there.
its just they won't accept useless pieces of paper.

I understand your point but not all farmers will survive, importations will slow down and in case of riots and martial law you may not get food easily.

If you have Silver, Gold or Bitcoin you will be able to exchange it against what you need. Having bottles of liquor may help too in some cases.

[tabnloz]

If this would have been done 10 years ago, the US would have ensured Canada got bitch slapped.

The fact that Canada and the rest of the countries commit to these deals without fear of repercussion speaks volumes.

The question for me is

1.) whether this is in a way co-ordinated globally, a way of 'weaning' off the USD slowly and moving into a new paradigm

Note on #1, China maintains a peg to USD. As US FED tapers big banks take up the slack (purchasing UST in same amounts as Fed cuts) and Japan increases its QE program.

2.) unco-ordinated and privately hostile.

Note on #2, that (geopolitically) Russia reacting to US/NATO encroaching in Eastern Europe has resulted in financial war tactics that are hurting the Russian economy. Ruble is getting belted. Oil, the cost of which is vital to Russia, is also being punished.

[worle1bm]

This has nothing to do with your statement that "this 'majority' of holders doesn't have very much production and wealth coming from their countries"

It does, you're just choosing to ignore it all as I expected and you clearly have an incorrect or very little knowledge of currency history.

Explain it more to me, then. I would really like to see economic output statistics to back up your statement:

"this 'majority' of holders doesn't have very much production and wealth coming from their countries"

[Kluge]

at this pace dollar reserves will become useless real soon and will be dumped.
thats when America gets to import its inflation back.

Can you explain why the dollar will become useless?

because once no one holds it in their reserves because they can just trade directly using their own national currencies people will dump it on the open markets creating massive inflation in America.

Ok, so how much is this currency swap between Canada and China worth total, and as a percentage of dollars held as reserves in Canada?

USG is going to need a "reset" in 2-3 decades, so a crash really wouldn't be that bad, right? It's not like people take on boat-loads of debt, then hold onto the cash - they use it for major one-off expenses, generally. I don't really see why the "dollar" is looked at as something we have to protect, as if it magically *is* the economy. If the dollar died, industry would move on to a new currency, pay off their near-worthless debts (hope you don't have an ARM!), and rev up the economy like it's the WW2 boom again.

However, the US as a whole is in a pretty good position compared to many other countries because while it does hold a lot in debts, it also has an exceptionally high relative amount in free, productive assets which are not currently "taxed into money" (that is, sold to cover taxation). The US government's going to have trouble paying its bills, but if the government's prevented from collecting that from the people and businesses, turning productivity into government expenditure, I think a USD collapse would end up being a net benefit for a majority. The longer we keep tax rates low, the longer we can prepare our industry for the boom, and the stronger it'll be. To get things restarted "right," though, the government will need to start taxing at rates which cover its expenses, and hopefully that comes with some massive budget-trimming and an overhaul of how our legislative system works, where lawmakers stuff hundreds or thousands of unpopular appropriations (and worse) into bills which "must" pass.

I think a lot gold bugs and the like look at things like PMs and recognize how valuable hard assets would be in the event of a USD crash, but then don't recognize how much more valuable it is to have machines and other infrastructure to convert hard assets into something usable -- rather, they undervalue the actual US economy because they spend so much time looking at scary numbers indicating bad times for the USD or USG. A USD crash doesn't necessarily mean there's going to be a US economy crash, as far as the productive, non-parasitic economy's concerned. I could be way off-base, though... I'm kind of trolling just so someone can show me where my thinking's wrong. There're so many variables, it's difficult to get concise explanations.

[picolo]

at this pace dollar reserves will become useless real soon and will be dumped.
thats when America gets to import its inflation back.

Can you explain why the dollar will become useless?

because once no one holds it in their reserves because they can just trade directly using their own national currencies people will dump it on the open markets creating massive inflation in America.

Ok, so how much is this currency swap between Canada and China worth total, and as a percentage of dollars held as reserves in Canada?

USG is going to need a "reset" in 2-3 decades, so a crash really wouldn't be that bad, right? It's not like people take on boat-loads of debt, then hold onto the cash - they use it for major one-off expenses, generally. I don't really see why the "dollar" is looked at as something we have to protect, as if it magically *is* the economy. If the dollar died, industry would move on to a new currency, pay off their near-worthless debts (hope you don't have an ARM!), and rev up the economy like it's the WW2 boom again.

However, the US as a whole is in a pretty good position compared to many other countries because while it does hold a lot in debts, it also has an exceptionally high relative amount in free, productive assets which are not currently "taxed into money" (that is, sold to cover taxation). The US government's going to have trouble paying its bills, but if the government's prevented from collecting that from the people and businesses, turning productivity into government expenditure, I think a USD collapse would end up being a net benefit for a majority. The longer we keep tax rates low, the longer we can prepare our industry for the boom, and the stronger it'll be. To get things restarted "right," though, the government will need to start taxing at rates which cover its expenses, and hopefully that comes with some massive budget-trimming and an overhaul of how our legislative system works, where lawmakers stuff hundreds or thousands of unpopular appropriations (and worse) into bills which "must" pass.

I think a lot gold bugs and the like look at things like PMs and recognize how valuable hard assets would be in the event of a USD crash, but then don't recognize how much more valuable it is to have machines and other infrastructure to convert hard assets into something usable -- rather, they undervalue the actual US economy because they spend so much time looking at scary numbers indicating bad times for the USD or USG. A USD crash doesn't necessarily mean there's going to be a US economy crash, as far as the productive, non-parasitic economy's concerned. I could be way off-base, though... I'm kind of trolling just so someone can show me where my thinking's wrong. There're so many variables, it's difficult to get concise explanations.

Very interesting point of view; there is a lot of positive in the US but the social pensions and health benefits are invested in government debt so it will be a problem; the trade deficit is running at 500billions a year and big government means less economic freedom, less innovation, less wealth creation.

[pattu1]

USG is going to need a "reset" in 2-3 decades, so a crash really wouldn't be that bad, right? It's not like people take on boat-loads of debt, then hold onto the cash - they use it for major one-off expenses, generally. I don't really see why the "dollar" is looked at as something we have to protect, as if it magically *is* the economy. If the dollar died, industry would move on to a new currency, pay off their near-worthless debts (hope you don't have an ARM!), and rev up the economy like it's the WW2 boom again.

However, the US as a whole is in a pretty good position compared to many other countries because while it does hold a lot in debts, it also has an exceptionally high relative amount in free, productive assets which are not currently "taxed into money" (that is, sold to cover taxation). The US government's going to have trouble paying its bills, but if the government's prevented from collecting that from the people and businesses, turning productivity into government expenditure, I think a USD collapse would end up being a net benefit for a majority. The longer we keep tax rates low, the longer we can prepare our industry for the boom, and the stronger it'll be. To get things restarted "right," though, the government will need to start taxing at rates which cover its expenses, and hopefully that comes with some massive budget-trimming and an overhaul of how our legislative system works, where lawmakers stuff hundreds or thousands of unpopular appropriations (and worse) into bills which "must" pass.

I think a lot gold bugs and the like look at things like PMs and recognize how valuable hard assets would be in the event of a USD crash, but then don't recognize how much more valuable it is to have machines and other infrastructure to convert hard assets into something usable -- rather, they undervalue the actual US economy because they spend so much time looking at scary numbers indicating bad times for the USD or USG. A USD crash doesn't necessarily mean there's going to be a US economy crash, as far as the productive, non-parasitic economy's concerned. I could be way off-base, though... I'm kind of trolling just so someone can show me where my thinking's wrong. There're so many variables, it's difficult to get concise explanations.

If the USD does crash, the government would have failed in one of its key responsibilities of keeping inflation under control. People with mortgages would be happy - their debts would be easier to pay off. The weakest sections of society would be hit the hardest - the poor and the pensioners.

[RoadTrain]

The Chinese have said that if the US doesn't reduce its debt it will start offloading its US Treasuries/bonds - and when their export markets have expanded and domestic demand has grown they might well be in a position to do just that. Even the odd threat of it causes the dollar to plunge.

Quite frankly, the US debt market is exactly what allows Chinese to keep yuan undervalued by buying dollars.

As long as China wants to be an exporting country, they will have to amass dollars (or any currency of their trading partners), either directly (via CB) or indirectly (via outward private investment).

Economic adjustment doesn't happen overnight. By the time Chinese reorient their economy the dollar exchange rate would have already adjusted.