What Happens To Gold And Silver Next? Look Out Below?

You are missing the point-

the last crisis the world had, the dollar, and US T-Bills were an uptrend. Thats where I went. I didnt go there because of any other reason than the trend. That said, in times of panic, it is the almighty USD and T-bills that the entire world rushes to as they are the ultimate safe haven.

As a trader, I can care less about any particular asset.
What I care is what trend are they in, up or down. IF they are trend less, thats not for me, I dont make money in a trend that doesn't move in a direction.

Therefore, if the dollar showed signs that it was done moving say higher an example, I would be a net seller. Again, I have no emotional attachment to any asset.

Yea I agree with you regarding the dollar and where its at at the moment.

I will be more than happy to buy gold and silver (for a trade) should it materialize,, but as of right now, not much is going on.

I think your average Greek (or whatever) would have an easier time procuring and spending U.S. dollars, rather than fooling around with gold and silver.

Americans probably have the easiest time belittling their own currency because they're used to seeing it accepted everywhere and take that for granted. But here's what would most likely happen in a transaction in Canada:

Paying your receipt in U.S. dollars: grumble, grumble, but if regulations permit they'll probably be accepted at par. (This is a 20% loss for you, but that's what you get for not paying with real dollars!)

Paying your receipt in gold/silver rounds: Nice try, go back to your fallout shelter.

So, the point: people all across the world actually do think that the U.S. dollar is a stable currency (and it is, compared to a lot of others), and trust that it's at least backed by a powerful government they know in denominations that make sense (with gold/silver you have to start thinking about weights and purities which is an extraordinary pain).

I don't think yup's belief in the "King Dollar" is just plain "exceptionalism" - mindless American exceptionalism bothers me as much as anyone (because I'm not American!), but there's not much of a contest. Precious metals are the wannabe currency of a little poorly-organized fringe. The more the world progresses, the further away from PMs we get, which is fine by me. The U.S. dollar, despite its spooky fiat-ness or backing by the scary, scary Federal Reserve, is firmly entrenched across the world.

nalaberong,

You are 100% correct, probably without realizing. The reason the dollar is king is because people (and central banks) around the world accept it which gives the dollar its value. But what happens when that confidence begins to slip. The dollar can go all the way to 0, because that is all that is holding it up: confidence. It's not a tangible thing.

Confidence in the dollar will rise, in the short term due to how weak the other fiat currencies are. The dollar will not escape the laws of economics, however. You cannot print trillions of trillions without people losing confidence in what that currency is worth. In fact that is why Nixon got us off the gold standard. Foreign countries (France) were asking for their gold back, because they knew we couldn't afford the Vietnam war and Johnson's Great Society.

Many countries have begun to ask for their gold back recently. It seems they are beginning to lose confidence in the current system.

Mr. yupster I think that China Russia And others ar trying to get rid of the Petro Dollar PLEASE Your opinion ?

@woodywood


I really have no opinion on that.

What I can say tho is that China, Russia, and other countries are major holders of the USD in their currency reverses, in fact their USD holdings dwarf any other currencies they hold.

@trout1105

Again, I really dont spend much time looking or thinking about these things because as a trader, none of these things really impact what I do or what happens. Reason being, lets say the dollar took a nasty turn.. well in that case the breakdown would FIRST manifest itself in price. Key areas would break down and confirm... way before any sort of NEWS were to be published.

That is why I dont need news and things happen before its published or talked about it. The market never gets on a podium and announces events,, rather it uses the price action first to "talk".

With that said, here is what I can say about the dollar and in regards to your question.

Foreign governments are quite active in the currency markets and I dont mean in terms of the action of central banks but rather by the respective treasury banks of foreign countries like China, Russia, India and other countries, such as latin american countries, they all participate in FX markets either because they are major holders of the USD or they currency is based on the USD.

Clearly, it would be their ruination if they removed themselves from the dollar because their holdings of the USD which are massive, if they dropped by exiting (and they would drop because with the vast amount of purchases they have made, you cannot unload them into the market without shock waves), would cripple them immediately.

So I am rambling here because there are sooo many market forces at work.... but I do think YES that it is good that the USD is the preferred and favored currency of all countries.

As an example, China has yet to garner the proper type rating for their debt, it is still ranked, without making this complex, you could think of it with a junk rating. This is not necessarily a bad thing but it has not yet attained a AAA rating. I believe even Brazilian bonds have a higher rating than China. So even tho China has come long ways, their bonds are not preferred or enjoy the favored status as the US bonds do.

Russia, for as much as they dislike the US, have more USD than say the Euro, the pound, or the yen. In fact, the Russians are no fools, can you imagine if they were fully loaded on the Euro? They would have massive losses if they had removed their dollars and rushed into the euro...

So I think it is good that all countries around the world are holding the USD as their preferred currency reserve. IT is strong vote for the USD and reinforces, acknowledges the stability of the US, the might of its military and its continued and important role of economic might.

Finally, seeing that just about all foreign currencies are in downtrends for the most part, I am sure all these foreign banks are more than happy and pleased as punch to see their USD holdings climb higher.

As a trader, I honestly dont really care to be a cheerleader for the USD. I just know from patterns, previous experience and what I see day to day in markets, that the USD is what the world wants and continues to want, including US debt. Nothing has changed.

In every single financial crisis, it is US bonds and USD that excels and everyone rushes into. Do you remember a couple years ago when there was a fake twitter post about an explosion at the white house? That fake news bit hit the tape immediately, within seconds and markets dipped immediately.

What happened within seconds was the USD spiked higher, US T-bills spiked higher and yet gold and silver, which were in the start of their downtrends, did nothing at all. That event was a perfect example of how again, in times of panic and fear, the flight to safety will be the USD and US T-bills.

sorry to ramble but there are just so many things to consider when tying to give an answer and I base this on what I actually see in the markets day to day, and not on "what could go wrong" or "what will go wrong".

Really? I don't think people rushed to US bonds or the dollar when during Roman financial crisis. My point, of course, is that the dollar has had a short life. It's time will come to an end eventually. All fiat currencies meet their maker someday.

There were thousands of financial meltdowns before the dollar and there will thousands after the dollar.

Again, I do agree that the dollar is thought of as a safe haven at the moment. That is what gives it its value. But I would have something that has real value that cannot be printed into worthlessness.