Trump’s Pick to be U.S. Ambassador to the EU, Ted Malloch says Greece May Dump the Euro in Favor of the Dollar.
As Petro Dollar Becomes Less Relevant What Might Replace it?
The Dollar – Based on Increased Military Strength and New Geo-Political Arrangements.
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A Shaky Euro Could Strengthen the Dollar as World Reserve Currency
While there has been plenty of talk of de-dollarization as eastern countries, like Russia add gold to their reserves and increasingly trade in currencies outside the dollar, re-dollarization may soon be gaining traction.
While the share of dollars as a percentage of international transactions and foreign reserves has fallen over the past twenty years, it has stabilized over the past five years.
The dollar’s share of international reserves is holding steady around 63%. The Euro’s share of global reserves has fallen from a high of 28% in 2009 to about 20% today.
Euro Issues
The European Central Bank is in the midst of a quantitative easing program and has instituted negative interest rates while facing Brexit, Grexit, Italexit and a rising anti EU France led by the Presidential candidacy of Marine LePen. Then there is Trump who wants to renegotiate NATO costs and favor Britain as a trading partner.
Meanwhile, the Federal Reserve in United State has been raising interest rates and ended their QE program at the end of 2014.
Japan?
Massive debt, no military.
China?
China has been selling U.S. Treasures the past year at a rapid pace. China has also sold over a $1 trillion in foreign reserves as part of its strategy to support the Yuan. China has incurred massive debt to produce factories and infrastructure. While the Yuan has gained some traction as an international currency, only a single digit percentage of global payments are settled in Yuan.
Death of Petro Dollar
But surely as the petro dollar dies, doesn’t that mean the US dollar dies with it and we have a “reset” of the financial system involving gold and or the SDR?
Not necessarily.
The Petro Dollar was based on the US offering military protection to Saudi Arabia. In turn, Saudi Arabia and other Gulf state would price their oil and accept only oil in dollars. this created demand for the dollar.
The United States can impose the same type of “deal” on Europe, Japan, South American Australian or African nations, especially if the U.S. increases its military spending. If the Petro dollar fails (although that is not an imminent certainty), the U.S. can make similar military protection arrangements that require other nations to use dollars and to buy U.S. Treasuries as reserves.
All currencies are fiat.. The Dollar is the most liquid currency in the world (which is self fulfilling – people who have dollars use dollars) and is backed by the strongest military. Perhaps its time to stop predicting imminent dollar collapse (and COMEX defaults).
You Tube Notes to this report
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Top economic story of the week: Silver rises for the seventh week in a row, gold also rises.
Gold and silver.
Gold closed last week at $ $1232.90 an ounce and closed this week at 1234.50 0%
Silver closed last week at $17.93 an ounce and closed this week at $17.94 0%
The gold and silver ratio ended the week at 68.78:1
Chart of the week
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Here are the stories we wrote, followed or commented on.
February 13, 2017
From Smaulgld.com
U.S. Mint Sales Update
U.S. Mint reported selling 75,000 American Silver Eagles and 2,000 American Gold Eagles today.
MTD American Silver Eagles sold 325K & American Gold Eagles sold 13,500
YTD American Silver Eagles Sold 5,452,500/American Gold Eagles sold 100,000
Compare American Silver Eagles for sale at:
BGASC.com
Golden Eagle Coins
JM Bullion
Money Metals Exchange
The U.S. Mint reported selling 0 one ounce American Platinum Eagle coins.
YTD 20,000
The U.S. Mint reported selling 1,500 American Gold Buffalo coins.
MTD 9,000 sold
YTD 41,000 sold
The U.S. Mint sold 0 of the first America the Beautiful Coin of 2017 in February – the Effigy Mounds National Monument coin. YTD ATB coins 17,700
You can compare American Gold Buffalo coins for sale at these websites:
February 14, 2017
From Smaulgld.com
Gold
Newspaper says Armenia will restore its gold reserves
Fed Chatter
Yellen Yacks at Congress
Yellen boasted auto sales at highest levels ever (but see auto debt at all time high)
economic outlook uncertain- monetary policy not on set path- incoming data and fiscal policy
Fed continues to reinvesting proceeds = maintaining accommodative financial condition, allowing to roll off =tightening
Balance sheet substantially smaller! -wants to have more treasuries instead of MBS
wont sell MBS but will eventually let them expire, but not doing it NOW
Yellen and congressman – US debt unsustainable – problem recognized but nothing offered to fix it
May be appropriate to raise rates in March if economy continues to improve
A few rate hikes would be appropriate this year – remain course – consensus is three rate hikes in 2017.
Consumers are doing well
Janet Yellen brushes off Congressman’s warning, says Fed has authority on global talks
“We will continue to coordinate with the Treasury Department, which is itself a member of several international forums related to financial services, such as the Financial Stability Board (FSB) and the International Association of Insurance Supervisors, as well as with the other U.S. supervisory agencies that participate in various international forums,” Yellen wrote in a Feb. 10 letter to McHenry, who is vice chairman of the House Financial Services Committee.
“In exercising our longstanding authorities and responsibilities for consulting with our foreign counterparts, we share the objective that the whole U.S. government must work constructively to ensure a strong, stable U.S. economy and financial system.”
Fed President Lacker Says Fed Should Raise Rates Sooner Rather Than Later
Markets underestimating pace of Fed rate hikes
US Economic Data
PPI Jan jumps 0.6% Exp. 0.3%, last 0.3%
1.6% Y/Y, Exp. 1.5%, last 1.6%
U.S. Mint Sales Update
U.S. Mint reported selling 210,000 American Silver Eagles and 2,000 American Gold Eagles today.
MTD American Silver Eagles sold 535K & American Gold Eagles sold 15,500
YTD American Silver Eagles Sold 5,662,500/American Gold Eagles sold 102,000
You can compare pricing and shipping charges on American Gold Eagles coins of all sizes at these web sites:
The U.S. Mint reported selling 0 one ounce American Platinum Eagle coins.
YTD 20,000
The U.S. Mint reported selling 2,500 American Gold Buffalo coins.
MTD 11,500 sold
YTD 43,500 sold
The U.S. Mint sold 0 of the first America the Beautiful Coin of 2017 in February – the Effigy Mounds National Monument coin. YTD ATB coins 17,700
You can compare American Gold Buffalo coins for sale at these websites:
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February 15, 2017
From Smaulgld.com
GERMANY GETS ITS GOLD BACK “EARLY”
Fed Chatter
FED’S ROSENGREN: I think we could hike rates at least 3 times in 2017
REdollarization
Greece to leave Euro and use dollar- Trump’s pick to be US ambassador to the EU
Gold
Silver
Pan American Silver increases silver mineral reserves to 286 million ounces http://finance.yahoo.com/news/pan-american-silver-increases-silver-025700822.html?soc_src=social-sh&soc_trk=tw via @YahooFinance #silvershortage
US Economic Data
Industrial Production -0.3%, Exp. 0.0%
New York Fed Empire Index Feb. 18.7, Est. 7
Retail Sales 0.4% vs Est. 0.1%
Retail sales ex autos 0.8%, est. 0.4%
CPI 0.6%, Exp. 0.3%; 2.5% Y/Y, Exp. 2.4%
Core CPI 0.3%, Exp. 0.2%
Atlanta Fed cuts Q1 GDP estimate to 2.2% from 2.7%
“sticky price ” inflation ticks up
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Compare Pricing and Shipping on American Gold Eagle Coins
You can compare pricing and shipping charges on American Gold Eagles coins of all sizes at these web sites:
You can compare American Gold Buffalo coins for sale at these websites:
Compare American Silver Eagles for sale at:
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Febraury 16, 2017
From Smaulgld.com
KYRGYZSTAN NATIONAL BANK GOVERNOR TO CITIZENS – BUY GOLD!
Gold
U.S. Mint Sales Update
U.S. Mint Sales Update
U.S. Mint reported selling 25K American Silver Eagles and 500 American Gold Eagles today.
MTD American Silver Eagles sold 560K & American Gold Eagles sold 16,000
YTD American Silver Eagles Sold 5,687,500/American Gold Eagles sold 102,500
Compare Pricing and Shipping on American Gold Eagle Coins
You can compare pricing and shipping charges on American Gold Eagles coins of all sizes at these web sites:
BGASC.com
Golden Eagle Coins
JM Bullion
Money Metals Exchange
The U.S. Mint reported selling 0 one ounce American Platinum Eagle coins.
YTD 20,000
The U.S. Mint reported selling 500 American Gold Buffalo coins.
MTD 12,000 sold
YTD 44,000 sold
The U.S. Mint sold 0 of the first America the Beautiful Coin of 2017 in February – the Effigy Mounds National Monument coin. YTD ATB coins 17,700
You can compare American Gold Buffalo coins for sale at these websites:
February 17, 2017
From Smaulgld.com
GERMANY KICKS OFF INTERNATIONAL GOLD REPATRIATION CRAZE
THE YEAR AFTER THE UNITED STATES WENT OFF THE GOLD STANDARD
U.S. Mint Sales Update
U.S. Mint reported selling 50K American Silver Eagles and 500 American Gold Eagles today.
MTD American Silver Eagles sold 610K & American Gold Eagles sold 16,500
YTD American Silver Eagles Sold 5,737,500/American Gold Eagles sold 103,000
You can compare pricing and shipping charges on American Gold Eagles coins of all sizes at these web sites:
The U.S. Mint reported selling 0 one ounce American Platinum Eagle coins.
YTD 20,000
The U.S. Mint reported selling 0American Gold Buffalo coins.
MTD 12,000 sold
YTD 44,000 sold
The U.S. Mint sold 1,000 of the first America the Beautiful Coin of 2017 in February – the Effigy Mounds National Monument coin. YTD ATB coins 18,700
You can compare American Gold Buffalo coins for sale at these websites:
THE CASHLESS SOCIETY – HOW DID WE GET HERE?
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