Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24
How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - 17th Feb 24
Why Rising Shipping Costs Won't Cause Inflation - 17th Feb 24
Intensive 6 Week Stock Market Elliott Wave Training Course - 17th Feb 24
INFLATION and the Stock Market Trend - 17th Feb 24
GameStop (GME): 88% Shellacking Yet No Lesson Learned - 17th Feb 24
Nick Millican Explains Real Estate Investment in a Changing World - 17th Feb 24
US Stock Market Addicted to Deficit Spending - 7th Feb 24
Stocks Bull Market Commands It All For Now - 7th Feb 24
Financial Markets Narrative Nonsense - 7th Feb 24
Gold Price Long-Term Outlook Could Not Look Better - 7th Feb 24
Stock Market QE4EVER - 7th Feb 24
Learn How to Accumulate and Distribute (Trim) Stock Positions to Maximise Profits - Investing 101 - 5th Feb 24
US Exponential Budget Deficit - 5th Feb 24
Gold Tipping Points That Investors Shouldn’t Miss - 5th Feb 24
Banking Crisis Quietly Brewing - 5th Feb 24
Stock Market Major Market lows by Calendar Month - 4th Feb 24
Gold Price’s Rally is Normal, but Is It Really Bullish? - 4th Feb 24
More Problems in US Regional Banking System: Where There's Fire There's Smoke - 4th Feb 24
New Hints of US Election Year Market Interventions & Turmoil - 4th Feb 24
Watch Consumer Spending to Know When the Fed Will Cut Interest Rates - 4th Feb 24
STOCK MARKET DISCOUNTING EVENTS BIG PICTURE - 31st Jan 24
Blue Skies Ahead As Stock Market Is Expected To Continue Much Higher - 31st Jan 24
What the Stock Market "Fear Index" VIX May Be Signaling - 31st Jan 24
Stock Market Trend Forecast Review - 31st Jan 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

America on Verge of Losing Petrodollar Privilege

Stock-Markets / US Dollar Apr 01, 2023 - 06:02 PM GMT

By: MoneyMetals

Stock-Markets

As gold prices continue to hold firm near the $2,000 level, bulls are eying big developments ahead for the monetary metal along with the global monetary system.

Gold’s potential ascendancy to new record highs is coinciding with a decline in the global status of the U.S. dollar as world’s reserve currency.

China is pushing for its currency, the yuan, to be the primary competitor to the dollar in international trade. It has forged new partnerships with Russia and other countries who are willing to deal directly in Chinese yuan.



Of course, it’s no surprise that Russia is working to undermine the U.S. dollar standard. Western sanctions have attempted to blacklist Russia from the global financial transactions and forced the Kremlin to pursue alternatives which include doing international business in rubles, yuan, and even gold.

What U.S. officials fear now is that Saudi Arabia could announce it will no longer price oil exclusively in dollars. Any abandonment of the petro-dollar would formally signal the end of the dollar’s status as world reserve currency.

The consequences of such a development would be “catastrophic.” That’s according to Monica Crowley, who served as assistant to the U.S. Treasury Secretary under President Donald Trump.

Monica Crowley: It's really hard to overstate exactly how catastrophic the abandonment of the U.S. dollar would be as the world's global reserve currency. Look, since the end of World War II, the dollar has been the safe place to go, and it's been backed up by a couple of things. It originally was backed up by gold, but President Nixon took us off the Gold Standard, so there's no hard asset backing up the dollar anymore for the last 50 years, but also it's been backed up by the strength and economic power of the United States and the fact that oil has always been traded in dollars. If that were to end, that would mean the end of the U.S. dollar. If Saudi Arabia decides to join with America's enemies here and start trading oil in different currencies, that is going to undermine the entire global economic system. And here at home, you know what it's going to mean for us? It's going to mean raging inflation, so much worse than anything we have ever experienced.

With so much at stake, the Treasury department, the Federal Reserve, and large financial institutions want to prevent public confidence in the U.S. dollar from slipping.

One of the warning signs of a collapsing currency would be a spike in gold prices. The powers that be in the futures market seem to be trying to push gold back down whenever it begins to make a move past $2,000 per ounce.

Although the gold market does face powerful resistance near current levels, it can’t be capped forever -- especially given that the dollars in which it is priced are steadily losing value. The longer gold prices remain compressed within a trading range, the more the pressure will build for an eventual breakout.

Metals markets have been moving in recent days on bank run fears, rising expectations for Federal Reserve rate cuts later this year, and simmering geopolitical tensions.

China is currently making moves to expand its global reach and undermine the United States. While some geopolitical analysts are warning of a military conflict between the two superpowers, Chinese Communist Party officials may be more inclined to strike at the U.S. financially.

China is investing in countries throughout Asia, Africa, and the Middle East as part of its “Belt and Road” project. The Chinese aim to place the majority of the world’s population under its direct economic influence. And they will likely use that influence to drive a wedge between its trading partners and the United States.

The end goal may be to drive most of the world away from the U.S. dollar. The U.S. might be able to defeat China militarily, but it will be in a difficult position if it comes down to trying to win a currency war.

It can no longer claim to be the custodian of a global gold standard. Nor can the United States credibly claim to be the world’s most financially sound or politically stable country.

American politicians, bureaucrats, and central bankers have abused the privilege of having the world’s reserve currency. Instead of practicing fiscal and monetary prudence, they have embarked on a reckless expansion of debt owed to the rest of the world.

The rest of the world is starting to realize that what they are owed won’t be paid back in honest currency. It will be paid back in rapidly depreciating Federal Reserve notes.

That realization is helping to prompt a record surge in sovereign gold buying by foreign central banks. They can see the writing on the wall. And hopefully, so too will individual investors before it’s too late for them to protect themselves from a currency crisis.

By Mike Gleason

MoneyMetals.com

Mike Gleason is President of Money Metals Exchange, the national precious metals company named 2015 "Dealer of the Year" in the United States by an independent global ratings group. A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist. Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, Detroit News, Washington Times, and National Review.

© 2023 Mike Gleason - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in