Countries are diversifying away from the U.S. dollar and the Euro as they are perceived more and more as fiat currencies. Other central banks are reducing dollar holdings and are creating trade agreements dealing in local currencies thus sidestepping the dollar. An example of barter: India and China have Gold for Oil agreements with Iran.
China now has local currency swap agreements with Russia, Japan, Australia, Brazil and Africa, bypassing the dollar. The flight to hard assets versus paper currency is also manifesting in China. China is loaning its dollar surplus to countries and expecting to be repaid in oil or metals, not currency; a new “barter economics” developing.
Gold is fast being exported by Italy to Switzerland, and the rush of the wealthy toward global real estate, jewelry and art, in an effort to replace fiat currencies with hard assets, is pushing prices to record levels. Yet the dollar exchange rate is up thus far, and the Gold price is down. Not for long.
A recent Bloomberg’s headline was, ‘China’s Gold Imports From Hong Kong Slump on Quota Backlog’. Here is another news article designed to mislead the public. The reality is that China’s imports of gold fell month-to-month from 104 tons to 101 tons. Actually, China is on a path to import, just through Hong Kong, 1,200 tons of gold at this pace for the year of 2013. Does the following graph suggest anything different?
If the world ever starts to price key commodities such as oil in gold, the U.S. dollar will experience hyperinflation. Purchasing power will be lost at a very high rate of speed. On the other side of the transaction, gold and silver will skyrocket in relative terms.
We are currently in a slow motion global bank run. People are converting out of fiat currency into gold, silver, and other tangible assets. They are losing faith in the fiat currency system. When this happens, power is transferred. We have breakdowns occurring on numerous fronts in the global financial system. The Fed is working overtime to keep the markets at bay. Mr. Ponzi would be proud of this financial juggling event.
Clearly I long for the Power from On High to manifest fully and completely in the earth. Love has all the solutions to the current problems. When the Divine Intent is manifested through the Mature Sons and Daughters and they are endowed with the power and authority, true change will occur. A system of Equal Weights and Measures will prevail. There will be Truth in the Transaction once again.