Gold is officially replacing the US dollar June 28th (when NDAA takes effect)

[jmdrake]

Didn't India do something similar?

Yep.

http://seekingalpha.com/article/3218...n-move-to-gold

[jmdrake]

June 30:

China dumps 1 trillion dollars worth of US bonds on the market, plummeting the worth of the dollar.

+rep. And China can match us militarily.

[jmdrake]

It will be yet ANOTHER example of Infowars/Ickle style fear mongreling which discredits the libertarian movement.

So now Forbes = Infowars?

[Zippyjuan]

So now Forbes = Infowars?

Yes- I would say somebody is trying to give it an Infowars- like spin.
The Forbes article doesn't say that the dollar will officially be replaced by gold (nor is that headline from the Forbes piece- that comes from another source- Jim Sinclair: http://www.gold-speculator.com/jim-s...th-2012-a.html ) or even say that China will definately use gold to pay for its imports from Iran. It speculates that China MAY start buying oil from Iran with gold. It also suggests that they may use other currencies or silver as well or even toiletries or food:

The Forbes headline:

The Best Reason in the World to Buy Gold

But it also cautions:

Gold bugs, however, shouldn’t get too happy about Iran’s plight. There are five principal factors that will depress anticipated demand for gold used to buy Iranian oil. First, other countries will also be bartering agricultural and manufactured goods. Russia and Pakistan, for instance, will undoubtedly continue wheat-for-petroleum arrangements.

So how can Beijing keep both Iran’s ayatollahs and President Obama happy at the same time? Simple, the Chinese can avoid the U.S. sanctions through barter. China has already been trading its produce for Iran’s petroleum, but there is only so much gai lan and bok choy the Iranians can eat. That’s why Iran is also accepting, among other goods, Chinese washing machines, refrigerators, toys, clothes, cosmetics, and toiletries.

Second, Tehran, out of apparent desperation, in February said it would also accept local currencies, thereby avoiding the U.S. financial system. As a result, the Indians announced in January that they would not request a waiver from the Obama administration, and they began opening rupee accounts to pay for as much as 45% of their oil purchases with their currency. In 2011, India exported only $2.7 billion to Iran while buying $9.5 billion in oil. Similarly, the Chinese, smelling blood in the water, will surely press the Iranians to accept the non-convertible renminbi.

To repeat the Forbes link: http://www.forbes.com/sites/gordonch...d-to-buy-gold/

[GreenBulldog]

The Forbes article doesn't say that the dollar will officially be replaced by gold (nor is that headline from the Forbes piece- that comes from another source- Jim Sinclair: http://www.gold-speculator.com/jim-s...th-2012-a.html ) or even say that China will definately use gold to pay for its imports from Iran. It speculates that China MAY start buying oil from Iran with gold. It also suggests that they may use other currencies or silver as well or even toiletries or food:

Think about it: Iran is going to have to buy SOME THINGS with the gold it gets from China. Which would you have: Gold from Iran or dollars?

China is going to have to get gold. How? Sell dollars for gold.

What happens to T-bills? Who's going to want them? The Fed.

What happens when the Fed buys? Value of the dollar drops.

Then gold looks even better.

[GreenBulldog]

June 30:

China dumps 1 trillion dollars worth of US bonds on the market, plummeting the worth of the dollar.

June 31:

Fed buys shitload of T-bills to keep interest down.

July 1:

Runaway inflation causes the rest of the world to dump their bonds.

July 2:

The Greatest Depression starts in the US.

July 3:

US military withdraws all its troop cause they're broke. Ron Paul says, "I told you so."

July 4:

Rest of the US: "Ron Paul was right....again."

[Zippyjuan]

If China dumps its Treasuries the value of their currency relative to the dollar soars and so does the cost of goods we import from China so we stop or dramatically cut back on them. Now China is facing high unemployment and social unrest at home- things the ruling party will want to avoid if at all possible. All their foreign policy actions are based on one premise- what is going to be best for the Chinese economy? That would seem to rule out any dumping of Treasuries or US dollars.

[GreenBulldog]

If China dumps its Treasuries the value of their currency relative to the dollar soars and so does the cost of goods we import from China so we stop or dramatically cut back on them.

If their currency soars, their purchasing power increases and they're able to buy more stuff.

They outbid us for everything, including our #1 import-oil, and we're stuck with weak paper dollars that can't buy shit.

Now China is facing high unemployment and social unrest at home- things the ruling party will want to avoid if at all possible.

If things go the way they are now, they WILL have social unrest; however, if their purchasing power go up, their people would be able to live a more comfortable life because they'll be able buy more stuff. Who's going to fight then?

All their foreign policy actions are based on one premise- what is going to be best for the Chinese economy? That would seem to rule out any dumping of Treasuries or US dollars.

They don't know what's best for the Chinese economy or for their people. They are, just like us, put priority on their special interest group.

With that being said, maybe you're right. Under normal circumstances, they won't dump T-bills or dollars because they're there to help their special interest groups, one of which are exporters. In this case (US declaring war on China), no.

[Bern]

There are more dots to connect in weaving this tapestry. You have to see with a helicopter view and not focus too much on a tunnel...

Gold, copper and other commodities could be paid for in yuan within a decade or two, bankers and traders said on Wednesday, provided China pursues its policy of gradually freeing up trade in the currency.

Already the world's biggest consumer of commodities such as industrial metals and oil, China's economy is growing more than three times faster than most developed countries.

Chinese customers and end-consumers such as refiners and fabricators now typically pay for such imports with dollars, but bankers at a Financial Times commodities conference in Switzerland think that will change, possibly quite rapidly.

They expect the yuan, also known as the renminbi, to be used increasingly to settle contracts into China and eventually as the basis for commodities trading, at least in Asia.
...

http://www.mineweb.com/mineweb/view/...0194&sn=Detail

... the dominance of the U.S. dollar was almost entirely dependent on the grip it had over oil producers and this allowed the oil price to be designnated in the U.S. dollar. The U.S. has gone to war in Kuwait and Iraq over this issue under the guise of destroying "weapons of Mass Destruction" as it appears on the verge of doing in Iran. It is no coincidence that Iran has long since ceased using the dollar to price its oil. It has also eliminated the U.S. dollar from its reserves.

THE SWIFT SETTLEMENT SYSTEM

But of greater importance to the emerging world has been the use of the Belgian-based SWIFT system of international settlements. Not only has the move stopped the sale of Iranian oil, but it has also interfered with an important source of oil to the emerging world.

Right now there are ongoing discussions between the BRICS (Brazil, Russia, India, China and South Africa) countries over their use of the SWIFT system of international settlements as a 'weapon' against Iran. The full extent of the impact of this appears to have been ignored. With China and India as two of Iran's clients, they found that the U.S. could hurt them considerably with this action. If they can hurt them in this way, then they can hurt them the same way on other issues. So the question that the BRIC nations are now asking is, "Must we be subject to the financial will of the U.S.?"

The question has long-term implications that could affect these nations' freedom of financial activity. The question demands to see just how powerful the U.S. really is. It is very clear to these emerging nations that if they are to keep on growing, unfettered by the U.S. will, they must set up a system that is not vulnerable to U.S. influence and to reduce the influence of the dollar itself.

What is being realized slowly is that the actions that come out of this conference may well mark a watershed in the shift of power from West to East and the significant reduction in the power of the U.S. as the globe's main financial influence. Consequently, these nations will have to lower the influence of the U.S. dollar on their affairs if they are to achieve real financial independence. This has to be a future and extremely negative influence on the international value of the U.S. dollar.

While the SWIFT settlement system is a Belgian-based international banking settlement agency, the U.S. influence over it was sufficient to halt all Iranian interbank transfers. It is not the system that is faulty but the influence of the U.S. over it that is the danger to the BRIC nations.
...
The latest moves by the U.S. are deeply disturbing to China, as they have the power to directly hurt the spread of the Yuan on a global basis, if the U.S. so decides. Consequently, China is threatened right now! China has been working on alternatives so far, but the moves on the SWIFT system by the U.S. have made the issue urgent as she now faces a security threat. As China continues to develop, she will face a massive demand to be able to provide financing for expensive capital goods. China can no longer afford to depend on the U.S. dollar as the financing currency for its goods, as it is technically possible, although unlikely, at the moment, to face threats from the U.S. even on this subject.

It is clear to the BRICS nations that they need to set up institutions at the heart of the present world financial systems to act as an alternative to the World Bank and the International Monetary Fund and perhaps a replacement to the SWIFT system for transactions with the emerging world. It will not be sufficient to just have an important role in the developed world institutions. It will also be inappropriate to rely on the U.S. dollar as the currency of the emerging world as it is now.
...

More: http://www.mineweb.com/mineweb/view/...ail&pid=102055

Far from Delhi's decked-up roundabouts and sanitised hotels, Robert Zoellick was aboard a boat on Wednesday, crossing the river Bhitarkanika on his way to a village in Orissa. After greeting the villagers with folded hands, the World Bank president sat down to talk to a global news agency. A few stock questions later, the Bank chief turned his attention to the proposed BRICS bank. "It's a complicated venture which will have a hard time getting off the ground and match the expertise of the World Bank," Zoellick said.

It was hard to miss the symbolism of Zoellick's foray into a dark corner of India and raise doubts about a new development bank just one day before the leaders of Brazil, Russia, India, China and South Africa (BRICS) met in the Capital to thrash out the nitty-gritty of the Delhi Declaration. It was clear that the Bank didn't want a new global rival that couldn't be controlled from Washington.

But by Thursday evening, BRICS leaders had proposed to trade among themselves in their local currencies, made significant progress on the setting up of the new development bank, expressed their concern at the slow pace of quota and governance reforms in IMF, and decided to abide by UN sanctions and not the unilateral ones imposed by the US and European countries on Iran and Syria. "We wish to see these countries living in peace and regain stability and prosperity as respected members of the global community," the declaration said.

This was a giant leap forward, much more than what skeptics like Zoellick had expected. In the days leading to the summit, the air was thick with negativity. "What do they talk at these summits? It's just a talk shop and a photo op," an American diplomat had said, making no effort to hide biting sarcasm. The same day, an op-ed piece in the New York Times argued that the focus of the new bank was misplaced. "It is the fundamental incompatibility of the BRICS nations, not their lack of organisation, which prevents this collection of emerging economies from acting as a meaningful force on the world stage," the op-ed said. In this western worldview, BRICS is an idea whose time hasn't come.

By Thursday evening, however, the mood at the summit was upbeat, with ministers, diplomats, businessmen and journalists smelling a change in the air. "BRICS is not an idea. It's already a reality. The balance of the existing global order is tipping," says Jackson Schneider, vice-president of Embraer, the Brazilian aviation giant. "If BRICS has no force, why is the NYT wasting so much ink and time on us?"
...

More: http://articles.timesofindia.indiati...ick-world-bank

Re: India, this is the last I heard:

The Indian government will offer tax incentives to exporters for sales in rupees to Iran, in the latest effort by New Delhi to bolster exports in return for oil from the Islamic Republic squeezed by Western sanctions, a finance ministry official said.
...
To skirt the sanctions, India this year decided to buy oil through a mechanism that lets refiners deposit rupees, which are not freely traded on global markets, for about 45 percent of Iranian crude purchases in an account at India's UCO Bank.

India sent a trade delegation in March to Iran to boost merchandise exports as a way of securing oil in return. But the delegation came back empty handed, and Indian exporters have complained of difficulties in trading through the new mechanism.

In response, the finance ministry will now offer tax incentives in the range of 4-12 percent of the value of products to exporters for sales to Iran in rupees. That brings them on a level playing field with exports sold in freely convertible currencies, such as the dollar.
...

More: http://www.reuters.com/article/2012/...8340JN20120405

[LibForestPaul]

If their currency soars, their purchasing power increases and they're able to buy more stuff.

They outbid us for everything, including our #1 import-oil, and we're stuck with weak paper dollars that can't buy shit.



If things go the way they are now, they WILL have social unrest; however, if their purchasing power go up, their people would be able to live a more comfortable life because they'll be able buy more stuff. Who's going to fight then?



They don't know what's best for the Chinese economy or for their people. They are, just like us, put priority on their special interest group.

With that being said, maybe you're right. Under normal circumstances, they won't dump T-bills or dollars because they're there to help their special interest groups, one of which are exporters. In this case (US declaring war on China), no.

Yes, but dumping dollars (currency manipulation) buying oil (natural resource raid) and relations with Iran (terrorist cohort) seems like it would lead somewhere bad.