For half a century, people around the world like to call the dollar “US dollar”, which reflects the credit value of the dollar when it is strong, but we know that the currency has a “shelf life” and the dollar is not “gold.” The real gold is gold. This actually tells the relationship between gold and money. “Gold and silver are not money, but the currency is naturally gold and silver.” Marx even broke the value and essence of gold.
Behind the support of the US dollar is the international commodity transaction that is accepted by people all over the world in US dollars. In other words, the core function of money is commodity trading. The currency without trading support is like waste paper. The reason why the US dollar can become a global The most important reserve currency, in addition to the comprehensive strength of the US economy, is more important. The US dollar has led and controlled the pricing power of bulk commodities including oil and gold, and the SWIFT International Currency Clearing Center, which is indirectly controlled by the US dollar.
This ideal trading order has lasted for more than 40 years, but now there has been a big change. In fact, when the US dollar is out of the gold standard, the use of oil dollars to continuously collect the coinage tax by printing money is an indication of the dollar itself. The value of the company is slowly losing. Especially after the financial crisis in the United States in 2008, the dollar’s credit dividend was continuously diluted by the Fed’s multiple rounds of QE.
At the same time, in recent years, there has been a constant voice in the market to implement the gold standard. For example, some experts suggest that countries such as Iran, Russia and Turkey that are sanctioned by the US dollar can use the gold standard to issue currency instead of the US dollar, and recently bypass the SWIFT dollar. The actions of settlement transactions (de-dollarization) are even more frequent. We noticed that this kind of voice mainly appeared in Europe (German-led) and emerging markets, which can be found in the hot news of the US and Europe in recent months.
All of the above seem to indicate that the once-unprecedent “US dollar” has long lost the label of trust and the light of the past. In recent years, some non-US currencies with good credit are also making economic and trade exchanges in the world, especially in the trading of commodities such as crude oil. It plays a more and more role.
The core message behind this is that, now, most of the US dollar is anchored to the size of the US Treasury’s US debt to be issued (US debt standard), while the dollar value of current gold is only equivalent to 2.89 40 years ago. %, the value of the dollar has fallen sharply, and it has even reached the point of being abandoned by many countries. So, from this point of view, gold is the biggest “opponent disk” of the US dollar, and all the market data today seems to indicate this. In fact, in the past 45 years, the US dollar has been exchanged for most major currencies. The exchange rate has fallen by 50-70%, and gold is still an international permanent “currency”.
Therefore, from this point of view, the US dollar is the largest hard power of the US economy, but it is also the soft underbelly of the United States. The “oil dollar”, which is the true meaning of the dollar, is also deteriorating, which explains the inclusion of Germany (August 2017). Shipped back), Hungary (March 2018) and so on why some countries have to ship all the gold from the United States and Britain back to the country.
At the same time, RT reported earlier this year that China, Russia, India and other BRICS countries will jointly formally “stop” the dollar pricing power of physical gold to establish their own world currency gold trading system and Oriental gold pricing power benchmark, the Russian media said that the newly established trading system will be evolved through the bilateral links between BRICS countries, thus bypassing the US-UK-led world gold trading system, we note that at present, China A memorandum has been signed with the Russian Central Bank on the development of the joint gold trading system, and the project will be implemented at some point in the next.
It is in these contexts that, according to the Wall Street Journal, West Virginia Rep. Alex Mooney submitted a new bill in the House of Representatives to try to restore the dollar’s issuance system to the gold standard, although more than 8,000 in the United States. The ton of gold reserves is not enough to cover the current tens of billions of dollars in circulation, but Mooney’s solution in the bill is to control the Fed’s money supply, re-invest the value of gold, and return its decision to the United States. The market, in other words, is back to the gold standard.
Mooney pointed out that since our dollar left the gold standard decades ago, most of our economic and financial problems are not the result of pure globalization and unemployment, but the Fed’s “printing money – debt expansion – inflation “To destroy the value of the dollar, the Fed should take responsibility for it.”
But at the same time, after US lawmakers asked the Fed to return to the gold standard, now things have changed. We have also noticed that it is not impossible to re-activate the monetary gold standard, but tactically. It is not operational, because DailyFX analyst David Cottle recently wrote an analysis saying that at present, central banks do not have enough reason to give up sovereign credit currencies. He even thinks that countries like Iran, Russia and Turkey can be used by US dollar sanctions. The idea of issuing a currency to replace the dollar in the gold standard is ridiculous.
He explained that even if they can unite to form the gold standard currency, the total gold reserves of the three countries are still far from the United States, the world’s largest gold holder, and according to the World Gold Council data, gold holdings 2 Ten of the 19 countries are American economic allies. In other words, the United States can manipulate gold and collapse the new monetary system that anchors gold. Moreover, at present, the pricing power of gold is also controlled by the United States. David Cottle further believes that although the current de-dollarization actions are one after another, at present, they still have a long way to go from the goal. Let’s take a step back and say that if gold is not working, there is probably no other available. Assets that challenge the status of the dollar are anchored.
In fact, if you look at the foreign exchange market, the analyst’s words are justified. For example, the dollar will continue to be a safe-haven currency for a long time, and the Fed’s potential rate hike is also It will make the US dollar more attractive, but we should also note that after the US dollar has left the gold standard, the first attempt by US lawmakers to use the constant credit standard of gold to “stop” the current US dollar currency issuance system is still significant. The significance of the fact, at present, the dollar-centered financial system credit rift is expanding among US economic allies (inter-Western). For example, many European countries such as Germany and France also advocate the exclusion of US dollars in the field of Iranian oil transaction settlement. To establish the euro’s own settlement system is the best evidence.
In this regard, Keith Neumeyer, chairman of First Mining Gold, has made the best explanation for us many times. He believes that central banks such as Russia and Turkey have reduced their holdings of US debt at the speed of clearance and tried to increase their domestic gold reserves. Very clearly, I am convinced that when the world really needs to resolve debts, especially the US’s super-debt deficit, as shown in the data below, global financial market resets will occur and may link everything to gold, as follows As shown in the chart, the Russian central bank is hoarding gold at the fastest rate in the past 12 years. At the same time, it is also selling the US debt at the fastest rate in the past seven years.
This explains why countries such as Russia want to accelerate the acquisition of gold because they may know what will happen in the world market in a few years, not only that, but also recently, we have also noticed that in the US dollar “base camp”, including Utah, Oklahoma Some states, such as Homer and Arizona and Idaho, are also accelerating legislation or have begun to make gold and silver a legitimate currency that keeps pace with the dollar, which seems to be indirectly confirming Keith Neumeyer’s analysis.