Share
347 Posts.
lightbulb Created with Sketch. 56
clock Created with Sketch. 30/01/22
08:23
Share
Originally posted by DavidW:
↑
I remember when Keating floated the dollar many people did not understand the consequences and many businesses went out and borrowed overseas in the belief the interest rates were lower. Financial advisors of the time obviously lacking an understanding of economics promoted the cheap rates. The did not take into account the falling $Au and many businesses went to the wall because the could not meet the repayment value given the dollar depreciated. Same thing may happen with a rising yield if the $US dollar falls in comparison to other key world currencies. Europe traditionally rushes to the US dollar in tough times. Note the DAX is rising and both Japan and China are not reducing money supply. Germany would not contribute to arms for the Ukraine. Interesting? It seems there are long memories when Germany had to wait 5 years to have its gold repatriated from the states when it was first refused during the GFC. Later there was also a takedown of the Euro. The outcome of which assisted money flow to the US and higher demand for $US. Then you had Brexit. European BIS membership appears to have outvoted London and New York and sided with Russia and China who were pushing for a basket of currencies inclusive of gold for use as international reserves. Russia supplies Europe with gas. As Kissinger said, there are only interests. London used to do the daily gold fix which was communicated to New York. Yet to see what will happen here with new BIS rules.
Expand
Good analysis DavidW. US Dollars are held in sovereign accounts all over the world. There appears to be a growing distrust in the US Dollar today, the result being, many of these US Dollars are being exchanged for gold.
