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Mixed feelings. As much as I’d like to see the US lose its way too dominant position in the global market,
issue more common debt in order to provide investors with an alternative safe asset to gold and US Treasuries
I’m not sure providing investors with another asset to invest in, is the right reason to do it.
Haha, awesome.
I imagine the investerors screaming to themselves “Move stock, NOW!” I don’t truly understand the economic systems, but if it’s like a run on a bank, as seen with Northern Rock in the UK, this will be unrecoverable.
2/3 of global trade is done in US dollars. However a lot of that has currency risk, like say Chinese companies paying their Chinese workers in yuan. So if the dollar looses value compared to other currencies, the old contracts can lead to exporters selling their products for less then they are worth. That is not a good situation to be in for a lot of companies.
In other words Northern Rock would be a joke compared to this.
I noticed that they mentioned an alternative to gold along with US Treasuries. I’m wondering why gold keeps going up in value when a good chunk of it is in the US and the US is the one causing all this uncertainty. How could I trust the US to keep my gold?
Maybe that is why silver is going parabolic? It is outperforming gold at the moment.
I sold my usd a week ago and am avoiding gold for that very reason. Trump always reacts in extreme ways and if the dollar tanks, seizing the world’s us held gold and charging a storage fee, or massive costs to transfer are absolutely on the table.
“We’ve been paying to protect their gold and it’s really, they should be paying us to hold it, it’s been free, American loses billions a year, trillion if you addi tip, just storing it. It’s time they pay. We have it, they want it. Pay us. It’s a really good deal, we could just sell it to someone else. Maybe we will. I hear Russia needs gold.” Or some such nonsense.
Trump always reacts in extreme ways and if the dollar tanks, seizing the world’s us held gold and charging a storage fee, or massive costs to transfer are absolutely on the table.
If that happens, gold will become much more valuable than it is now.
Of the us dollar loses value, the government can " print " more to make their payments. That makes it worth less as it devalues and can lead to hyper inflation. All the while, others may dump dollars devaluing it more.
With gold, of it’s price drops, you can just create more out of thin air. There is a set amount. Gold has inherent value as a rare metal, however most of its value currently is due to it’s scarcity making it a good store of value.
They’re already printing more than past administrations. They will keep printing it to patch up whatever breaks. That’s part of why he wants the fed under his control.
Right, I get that scarcity is what makes it a good store of value, but is what I said not a risk worth considering? Is that why price keeps going up? Let’s say an entity decides to dump gold, does the US have any say in whether that can happen or not? Could they?
Sorry for the questions, I’m just genuinely curious/concerned. This is all so complex for my brain.
No, but with the dollar there is the dual risk of dumping and printing. Gold is not ties to any nation or political ideology. If your gold is located in a particular country, it is subject to the risk on the ground, of course, but it can be moved or exchanged relatively easily. Some gold has been doing just that as people shuffle their wealth around.
If the gold isn’t in your physical hands then it still has ties to the nation that it’s stored in and is subject to its politics.
When people buy gold, they buy certificates of ownership. They don’t buy literal hunks of bullion. The gold is still physically in a vault, and a lot of that gold is stored in the US itself. So, what happens if the US says “actually, that gold is ours now”?
Yes, but some have transferred the bullion to holdings in the uk and Germany. And those countries have too.
A lot is in the USA, but not all. Holding an asset, even in a failed country (which is highly unlikely, by the way) is still a viable asset.
The fact that you think the USA could claim privately held assets as government property is precisely why some people want to hold gold rather than cash in an account which can be seized digitally.
What do you mean “holding” an asset? If they aren’t holding it within their borders in their own vaults then it’s just paper. The US can just say “that’s ours now” and steal it, it’s no more a viable asset than the oil being stolen from Venezuela.
Worse, if they pull their gold out too fast it might cause the US to react by locking the vaults anyway.
It’s a rock and a hard place. They fucked up by ever trusting the US.
Are you talking about individuals or states at this point? Or varies for each and I agree, outside their borders, for states, it is riskier. However, they are shuffling their hokdings to manage that risk. As are people, which was my point.
I don’t think they messed up by trusting the US. It was safe and stable for a prolonged period. They fucked up by not recognizing the risk once trump term 1 started.
Who had “crippling deflation on the international exchange markets” in their 2026 bingo cards?
Also, when does this year end? It feels like it has been going on for a decade!
Mate. It’s only been a month 😔
Finally, the solution to crippling inflation!
Longest month since March 2020.
we have been in the weeks where years happen
Hope you’re not planning to rely on selling any stock in the near future!
No doubt. We’re looking at another lost decade. Or worse.
“They have a scenario” doesn’t mean it’s likely. No way there is going to be a run on US paper right now
