Gold Backed Dollars
West Continues to Fall - East Continues to Rise
(This transition points to a transfer of wealth)
Global Economy Snapshot
Many still think the economy is on the verge of recovery. While the rest of the developing world continues to steam ahead plowing through obstacles, the western world continues to spiral downward. This still does not take into consideration ALT-A and ARM loan resets through 2011.
July 9 (Bloomberg) — “The $3.5 trillion commercial real estate market is a ticking ‘time bomb’ that may lead to a second wave of losses at large U.S. banks,” congressional Joint Economic Committee Chairwoman Carolyn Maloney said. About $700 billion in commercial mortgages will need to be refinanced before the end of 2010 and “Doing nothing is not an option,” Maloney, a New York Democrat, said at a committee hearing today. “This ‘looming crisis’ may lead to significant losses for banks, force shopping center and hotel owners into bankruptcy, and impede economic recovery,” she said.
Meanwhile, the rest of the world forges onward.
The IMF claims Asia cannot decouple from the western world economies and will not continue to grow until the west recovers…the article clipped below does not agree. Also, has the head economist of the IMF forgotten that China has almost $2 Trillion in savings that it can spend?
SAN FRANCISCO (MarketWatch) – China wrestled the new-car sales crown from the U.S. through the first half of the year, topping six million cars and trucks at a time while the long-time global sales leader grapples with historic declines.
Do you really think the world’s leaders believe all this nonsense about green shoots? If they did, would they be plowing money into commodities like this? Or maybe is it that they know that if you print $13.5 Trillion (and growing), you will see massive inflation of real prices, so they are buying while it’s cheap and using lip service to keep the dollar value from dropping to preserve as much buying power as possible?
BEIJING, July 10 (Reuters) – China’s imports of unwrought copper and semi-finished copper products in June hit an all-time record for a fifth straight month of 475,999 tonnes, from May’s record 422,666 tonnes, data from the General Administration of Customs showed on Friday.
Rats From a Sinking Ship
More Diversification Out of Dollar - Japan has always been one of the biggest supporters of the USD, and now there is public discussion of diversifying out of it. This is very bearish for the USD (and very bullish for gold). This may be a prelude to a new ‘basket of currencies’ as an index to a new global exchange currency.
July 13 (Bloomberg) — Japan’s opposition party, leading in polls ahead of next month’s election, said the nation should consider shifting its $1 trillion of foreign reserves away from the dollar and buying International Monetary Fund bonds.
The Next World Reserve Currency
President Medvedev has called for a gold-backed currency over and over. This time, he isn’t just calling for it; he is producing examples of it. He handed coins to the leaders of G8 delegations, a prototype of a potential new global currency - and these coins were pure gold. Any move in this direction would be extremely bullish for gold.
July 10 (Bloomberg) — Russian President Dmitry Medvedev illustrated his call for a supranational currency to replace the dollar by pulling from his pocket a sample coin of a “united future world currency.”
My colleagues have been right so far, having called the current economic crisis over a decade ago. The video Millennium Money proves it as it was produced in the mid 90s. If gold becomes a backing for any currency, or if included in a basket of currencies for a future reserve currency for purposes of settling global trade, this is extremely bullish for gold. UBS recently released a report indicating that if the US wanted to back its currency with gold, it would require a gold price somewhere north of $6000 an ounce.
Do you own any gold yet?
By Alex Stanczyk
Honolulu, Hawaii
July 13th, 2009AD
