gold, page-14371

Unfortunately sovereign debts are perpetual and based on trust. This trust is defined by the rating agencies. Let's not debate if the rating agencies are corrupt because this is the system and I don't change it, merely use it to make informed decisions. If you strip it right down, the whole system is a PONZI system. If you have a better system of monetary transactions/system of valuation then by all means provide your thesis for Nobel prize considerations.

China may well have over 10,000 tonnes of gold and may keep hoarding them. One day they may need to monetise it fast to use as emergency measures like 2015 Shangcomp meltdown. Can you imagine if they dump say 200-300 Bil USD worth of physical as reported by the media on their USTB liquidation. How would gold price react? As for those USTB prices, it caused a blip in pricing because they are the deepest in the world. Do you think the Chinese accumulated their USTB positioning out of a novel experience?

China is spending/buying a lot of supply chain of raw materials to build their infrastructure form Zero. The developed world have been indulging in this sovereign spend for a 100 years from the Industrial revolution. Where d o you think the US money flowed to as the Brics economy took off? A lot have been written about the ills of the largest and most powerful economy in the world. I flip the USDx and last time I looked it has not collapsed. The last time I also checked, it is still the reserve ccy and majority of global trade transactions is determined in USD contracts. How many Aussies travelling around the globe flash their AUD when exchanging goods and services? How many countries will recognize them as acceptable ccy as opposed to the local ones? Flip out some USD bills and almost instant acceptance in the 4 corners of this world.


As more of the third world better themselves economically, the global trade will grow. China is only half way through their developmental cycle if that. India is waiting in the wings of potentially continuing the super cycle of economic activity. By some account Africa has one of the highest rate of growth so there is still scope for soft and hard commodity. When will this Ponzi scheme end? Maybe WW3 when the lucky few will have the star trek experience as they populate new worlds from a toxic one they left behind.

Meantime I am not about to start prepping myself for economic armageddon because when it comes, it is usually accompanied with major wars. Gold ain't gonna protect an individual when the country is being belted by the enemy.