THE U.S. PETRO DOLLAR BREAKDOWN CONTINUES: Big Moves In Gold & Silver Ahead

The four-decade long monopoly of the U.S. Petro-Dollar as the world’s reserve currency is coming to an end.  Unfortunately, most Americans have no clue that when the Dollar loses its reserve currency status, life will get a lot tougher living in the U.S. of A.  Let’s say, Americans will finally receive “Precious metals religion.”

The U.S. Dollar Index fell considerably yesterday and is now down below a key support level.  In early morning trading yesterday, the U.S. Dollar Index fell to 91.46, down 73 basis points:

According to technical analyst, Clive Maund, in his recent article, DOLLAR update as LOSS OF RESERVE CURRENCY STATUS LOOMS..., he stated the following:

The dollar is on course to lose its reserve currency status. This is not something that will happen overnight, it will be a process, but at some point there is likely to be a “sea change” in perception, as the world grasps that this is what is happening, which will trigger a cascade of selling leading to its collapse, whereupon gold and silver will rocket higher.

In that article, Clive posted the following chart on the U.S. Dollar Index (USD index) and its key support level:

As we can see, traders are looking closely to the Key support area at 92.5 for the USD index.  With the USD index now below that key support area, it could spell real trouble for the Dollar if it closes below that level at the end of the week.  After the markets opened today, the Dollar fell to a low of 91.08.  So, it looks like the Dollar will close this week well below the key support area.

Now, part of the reason for the selloff in the Dollar may have been due to the disaster that took place in the 10-year U.S. Treasury Repo market today.  According to Zerohedge’s article “We’ve Never Seen Anything Like This”: Repo Market Snaps As 10Y Suffers “Epic Fail”:

Commenting on this dramatic move in 10Y repo rates, Stone McCarthy’s Alan Chernoff, in a note titled “Epic Fail”, writes that “the 10-year note has been below the fails rate and shows no signs of moving! It opened at -350 basis points, and though pressure has eased off of it slightly, it is STILL below the fails rate at -300 basis points.”

The pressure on the U.S. Treasury 10-year repo market is likely a reaction to what came out of the annual BRICS summit in China yesterday,  According to the article, Escobar Exposes Real BRICS Bombshell: Putin’s “Fair Multipolar World” Where Oil Trade Bypasses The Dollar:

“To overcome the excessive domination of the limited number of reserve currencies” is the politest way of stating what the BRICS have been discussing for years now; how to bypass the US dollar, as well as the petrodollar.

Beijing is ready to step up the game. Soon China will launch a crude oil futures contract priced in yuan and convertible into gold.

This means that Russia – as well as Iran, the other key node of Eurasia integration – may bypass US sanctions by trading energy in their own currencies, or in yuan.

This announcement by Putin that oil trade should by-pass the Dollar came a few days after China announced that they plan to start trading oil on their Shanghai Exchange in Yuan, which will be backed by gold.  While we have heard for years that China was going to back their currency or trade with gold, we now see actual plans to start implementing it sometime this year.

By China backing its new oil trading benchmark in Yuan with gold, it provides countries with a great deal of confidence in trading oil in another fiat currency besides the U.S. Dollar.  Thus, countries that acquire a lot of Chinese Yuan by trading oil don’t have to worry about devaluation as they can convert Yuan into gold.

This Is Bad News For the Saudi-Petro Dollar System

The Petro-Dollar system that has been the foundation of world oil trade for the past four decades is now about to become obsolete.  Even though many countries will continue trading oil in Dollars in the future, a larger percentage will likely move into trading oil in Chinese Yuan as it provides a “gold-backed protection” against fiat currency devaluation.

Not only is the Petro-Dollar under severe pressure, so is Middle East’s largest oil exporter that was the foundation of this monetary system back in the early 1970’s.  Ever since the price of oil peaked in 2014 and has fallen by more than half to $49 currently, this has put an enormous strain on Saudi Arabia’s financial bottom line.  In the past three years, Saudi Arabia sold over $250 billion of its foreign exchange reserves, which are mostly in U.S. Treasuries, to fund its national government.

Over the past three years, Saudi Arabia’s foreign exchange reserves continued to decline each month, except in June.  As we can see in the chart below, Saudi Arabia’s foreign exchange reserves briefly increased in June, but according to most recently released data, fell to a new low in July:

Saudi Arabia’s foreign exchange reserves are now below the critical $500 billion level at $494 billion.  Again, the low oil price is causing a lot of havoc in the Kingdom’s financial bottom line.  Furthermore, Saudi Arabia has cut spending in oil projects and other areas.  This has severely impacted the number of workers that the Kindom imports to work on in its oil fields, etc.

According to data in the article, Fewer Pakistanis finding work in Saudi Arabia:

The export of manpower sharply dropped in the first half of the current calendar year, latest data from the Bureau of Emigration and Overseas Employment shows.

In particular, the manpower export to Saudi Arabia in the first six months of 2017 was just 17 per cent of the total workers who went to the kingdom in entire 2016. Pakistan exported to Saudi Arabia 77,600 workers in January-June as opposed to 462,598 workers in entire 2016.

If we divide the total 452,598 workers in half that Pakistan exported to Saudi Arabia in 2016, it equals 226,300 workers.  Thus, Saudi Arabia imported only 77,600 workers in Jan-Jun 2017, which is two-thirds less than the average for the same period last year.   Which means, Saudi Arabia is cutting back considerably on national government and state oil projects in 2017.

So, both Saudi Arabia and the Petro-Dollar are under severe stress as the low oil price guts the highly leveraged debt-based global economy.  The notion that the U.S. Shale Oil Industry will allow the United States to become energy independent from Saudi Arabia and other Middle East oil exporters is pure nonsense.

I can tell you that the U.S. Shale Oil Industry is in BIG TROUBLE as the super-high oil production decline rates are gutting the financial balance sheets of majority of the country’s domestic energy companies.  I mentioned this in my article, TROUBLE FINANCING ITS DEBT: Massive Decline Rates Push U.S. Shale Oil Industry Closer Towards Bankruptcy.

In response to that article, several of my readers made comments suggesting that I was “cherry picking” data by only providing some of worst case examples, such as Continental Resources.  In the article, I presented information showing how Continental Resources didn’t have enough funds to pay its interest payment.

While Continental Resources is in more trouble than other domestic energy companies, it’s becoming increasingly difficult for most the U.S. shale oil producers to pay their interest expense.  To counter the claim that I am “cherry picking” data, I present the chart below from the EIA – U.S. Energy Information Agency:

According to the EIA, 68 publicly traded U.S. energy companies are now spending 75% as a share of their operating cash flow just to pay the interest on their debt.  The industry’s debt service share of cash flow is up three times, from 25% just three years ago.  So, no… this is not just a Continental Resources problem, it’s industry wide.

Furthermore, additional evidence suggests that the U.S. Shale oil industry will NEVER be able to pay back its debt or let’s say, the overwhelming majority of its debt.  Thus, the U.S. shale oil industry was never a commercially viable enterprise from day one.  The insane business model of funding the drilling of shale oil wells by taking investor money that will never be paid back is another version of the famous PONZI SCHEME.

The announcement by China that it will start trading oil in Yuan backed by gold is the death-knell of the U.S. Petro-Dollar system.  As Saudi Arabia and the U.S. shale oil industry continues to disintegrate under the strain of lower oil prices, this will be the icing on the cake that pushes the Petro-Dollar system over the cliff.

The death of the Petro-Dollar will cause the precious metals prices to soar.  Investors who have not yet taken a position in physical gold and silver should seriously consider it as China’s announcement to trade oil in Yuan backed by gold was BIG WARNING that the days of the U.S. Dollar world’s reserve currency status are coming to an end.

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36 Comments on "THE U.S. PETRO DOLLAR BREAKDOWN CONTINUES: Big Moves In Gold & Silver Ahead"

  1. Welcome back Steve’o. The pendulum swings from money to currency, and back. For thousands of years, and counting. The $ is just another currency, with reserve privilage.

    What’s printed on it becomes less valueable over the years, until the moment we’re going to use it to warm our hands.

    Does the pendulum swing from west to east, or from currency to money?

    To be or not to be, that is the question.

    • houtskool,

      Good to be back. There’s a lot going on behind the scenes. I can tell you that the SHITE will hit the fan shortly. New evidence suggests the U.S. Shale oil industry is in much worse shape than I originally thought. More about that in the upcoming weeks.

      steve

      • Hi Steve

        Have you or any other analyst put pen to paper to do some calculating on China’s gold backing of RMB based oil sales? Thinking along the lines of comparing total imports with RMB expense of same over time with how much gold at what price it would take to credibly back same. When it comes to metals backing financial arrangements China is the rehypothecation capital of the world so it would be good to perform such an analysis.

  2. Steve,

    Looks like the joke may be on everybody. China, the other BRICS countries and Russia are going to dump the petrodollar and start an independent system just as the ERO(E)I of oil begins its approaches 1/1. The only ones to dodge the bullet will be the precious metals buyers that bought and hold physical.

    With the wildfires in the northwest, the monster hurricanes all along the south and the total insanity in the markets and government, it is beginning to feel like the biblical release of the four horsemen.

    Thanks for your always interesting and informative articles.

    SteveW

    • Steve W,

      Yes, the JOKE will be on everyone. While the BRICS will be able to enjoy being the KING DOG like the United States for a while, it won’t last long. As you stated, the falling EROI is gutting everything.

      Unfortunately, for Houston and soon to be Miami, the majority of the destruction in these two mega-cities will never be rebuilt. We just don’t have the energy.

      I believe things start really falling apart within the next 6-18 months.

      steve

      • You guys forget one big marble on your abacus . .

        I am warning people since more than 13 years now that the banksters/goldsmiths will orchestrate a well planned WWIII to wipe out every resistance and every dangerous knowledge. And here we are . . cold war everywhere . . ready to blow up.

        Wipe out knowledge. Like they did with WWII.
        A short time before the “magically” rise of hitler some people tried out new moneysystems and discovered that a different moneysystem could make people actually happy and prosporus. In a very short time the people in one previously poor and desperate test-village made a paradise out of their village . . . Flowers and happy people everywhere! They all felt like real living people with dignity and healthy motivations because they were working for each other . . not for the Banksters.
        A wonder! A wonder people started to talk about in europe.

        There was also a widespread knowledge about a big disgusting conspiracy that is pulling the strings in this world.
        That is the reason why Hitler immideately was listened to when he presented the jews as the root of all evil.
        Long before Hitler was chosen . . the banksters/goldsmiths prepared and managed to shift the blame for their evil moneysystem (via many powerfull publications) on all jews.
        Books that actually forecast the future in detail like no other book ever will . . but always point the fingers on jews.
        Since the future predictions where acurate . . the people HAD to believe that the jews are the enemy. . . plan worked out fine!!
        The most influential book: (german: “die Protokolle der Weisen von Zion”) (have no english title now) WAS and IS still a very wide spread book because it is so acurate.
        And guess what . . THE AUTHORS ARE UNKNOWN!!

        This book influenced Hitler in his hate and made him the perfect candidate to lead into the desired war on all fronts to create new and bigger problems so people would soon forget about the disgusting system they live in and be thankfull for a slave-job.
        And it worked . . a whole generation of idiots who think working-hard-for-others is the only accepted thing to do was born.
        Now this generation and its youth is rethinking again!!
        They start to understand that they are actually abused every day . . the disire for freedom is growing again. THIS MEANS WAR !!!

        So to be clear. .
        They will wipe us all out . . to basicly OWN the planet and the rest of the left scared people. That is the wet dream of rich narcistic psychopaths who call themselfs even on live tv “GODS” . . they literally have no feelings or empathy . . their motivation is OWNING the planet or DIE!
        Nothing between.

        So better act politicaly and prepare for destruction instead of betting on silver-wealth. Silver is just the base for some time before the total destruction takes place.

        Good Luck . .

      • You can delete opinons but the coming war will school you the difference between stuff on paper and the reality.
        This war will make all your work worthless. Because taking action ist more important than talking alot.
        . . . as you wish I wont visit or recommend this site again.

        • Arno & Arno Nym,

          I gather you are one in the same. I did not delete your comment. For some reason, the moderating software put you longer comment in the moderate folder. It does that from time to time. Normally, if someone puts links in a comment, it goes into the moderate folder because it protects the site from the thousands of spam comments we receive.

          Arno… you are also free to leave your opinion as much as you like on this blog. I don’t censor people for their opinion, only if they become outrageously belligerent.

          As for your assumption that the “WAR WILL MAKE YOUR WORK WORTHLESS… BECAUSE TAKING ACTION IS MORE IMPORTANT THAN TALKING A LOT”, is true if no one is taking action.

          While I spend time researching, writing and doing other things on my site, I also spend time gardening, taking care of some farm animals, a small orchard and etc. So, I agree with you that LOTS OF TALK and NO ACTION is unwise.

          That being said, 40% of my viewers to my site are NEW EYEBALLS or unique visitors. So, putting out the message gets to new people all the time.

          steve

    • The Four Horseman are the Elements that make up the Physical World that we are Experiencing.

      Earth, Water, Fire and Air

  3. Your site is the best for quality,topical articles , keep up the good work please.

  4. During the the fall of the Western Roman Empire as currency became more and more worthless there emerged a “script” currency between neighboring villages where things of value in each city were brought together and according to their value were given a share of the total value in “script” these “scripts” became the currency during the dark ages.
    Now as the world currencies are becoming more and more worthless people are making “Internet Scripts” the are exactly 21 million Bitcoins once they are all mined (75% of total so far mined). The scripts were only used between villages, locally it was mentally accounted for barter. Gold and Silver were stores of value BUT “scripts” were the currency!
    So the question is as the the Fiat becomes more and more worthless has there emerged a script type currency?
    As more and more of our life is done over the internet; is there a script that will work over this medium?
    Should we buy Gold and Silver YES! but not for currency!
    As in the Dark Ages only a percentage of your Gold/Silver should be given to convert to script for village to village transactions.
    So if you are only going to live and transact business locally you do not need “internet script” BUT If you see the needs in the future to transact business outside your village then you are going to need “internet script”.
    P.S. ARPA net (today’s internet is EMP resistant!)
    It may be an Age of Darkness coming but we will still have Gold/Silver, the internet and it’s currency Bitcoin.

  5. They can’t learn the truth. It would literally kill the hope inside them that allows them to continue living in a world so sick.

  6. Just wait until we experience a 10% or 20% drop in oil supplies. In a few years or sooner we certainly will. When it hits the economic and social damage will be catastrophic. The end of Western Civilization, from China to Europe, to the US, will not occur when oil runs out. The economic and social chaos will occur when supplies are merely reduced sufficiently.

  7. China has been planning this take over for years. China does nothing in a hurry. They plan years ahead before they make a move and now is the right time.
    No matter what good things I hear about Bit-Coin it is not Gold/Silver. Precious metals have been around for thousands of years and I will stick with them. Should something happen with the internet like a Government takeover or some other thing like a EMP what then pussy cat?
    Also keep in mind if your a Christian. This has nothing to do with Bit-coin. Companies are beginning to ask people to place a chip under their skin so they can open the door to enter the workplace and operate the printer or purchase soft drinks in the break room. Many people are having the chip inserted. I don’t think it will be far off before the Government will require this for all to receive their SS checks or to buy groceries. We are headed to a cashless society and real Christians know what this means. When and if people won’t except precious metals you won’t to be here anyway. You folks that don’t know what this means read your Bible and you will find out. Good Luck Out There.

    • PMs are to go through the roof. Do you believe that governments and the biggest financial institutions will be taken by surprise? If such an event was going to occur, they would first seize all gold and make transactions illegal. After that they would multiply the price by 5 or 10.

    • As a Christian, I believe that the prophesies from Revelations will one day come to pass. That could start tomorrow or in another 2,000 years. I’ve no idea, and neither do other people who claim to know exactly. We aren’t meant to know the exact time, we are only given signs.

      A centralized, government controlled crytpo token is an ideal medium for “the mark”. Before 2009, I knew we were at least some time away from the book of Revelations because the technology didn’t really exist well enough to enforce such an edict. But today, that is different. So if I think blockchain can be used to enable a mark of the beast. So why am I a crypto advocate then?

      1) Bitcoin can’t be un-invented, the technology is amazing. But bitcoin could never be used as this mark because there is no central control. It is a decentralized, trustless ledger that permits all transactions, no matter if some corporation or government agrees to your transaction or not. That is powerful.

      2) People will need a means to resist during those times more than ever in history. They will need something that is outside of government and corporate control. There will be people alive during these end times that become Christians. They will resist the mark. How will they transact? They will use the “illegal” (black market) means at their disposal. Fiat will be outlawed, visa and mastercard will be either gone, or converted into accepting only the currency of the mark. So what is left? PMs, and open-source, decentralized cryptos. PMs are a local currency, and crypto is global. This will be how people will resist, trade value, and organize together on a larger scale than just their own local cities. They will use the (decentralized) blockchain technology against the controlling elite, in the same way that “outlaws” today still transact in dollars and other fiat.

      A one-world government can (and likely will) use a crypto as a final world currency which will then be used to control the people. It won’t be bitcoin, or any other decentralized crytpo. It could be something like Ripple (controlled currently by the big banks) – which is why I don’t own Ripple. So in reality, while people will use technology for evil, we can also use it for good, and to get around the evil as best as possible. If I am wrong, and none of this Revelations stuff is even relevant, it has no effect on crypto overall. In that case it is still a great technological invention which will allow us to separate governments and the control of money.

      • As JP Morgan, said, only Gold is Money everything else is credit.You don’t have to be a Gold bug to see it. If Gold is not Money why do Central Banks hold 1000’s of tonnes of it.It is durable ,small and easily identifiable nd accepted the World over for Millenia, today is no different as we shall see.

  8. robert sinclair | September 9, 2017 at 1:43 am | Reply

    The dollar is not coming to an end shortly.
    China, using yuan to buy oil is the same as using their dollar reserves. They can use the proceeds to buy gold now. In fact they could sell all of their treasuries and buy gold now. Why dont they? Gold would shoot up in value (and so would their gold reserves) or the dollar would fall, which is the same thing. Their debts would be diminished and their assets would rise. That would be the end of the dollar. But its not going to happen because the world is in a conspiracy to keep the debt based currency or dollar system going. This system makes the bankers rich and gives the governments power and enless ways of raising taxes and basicly saying who get what and who doesnt and the cashless society completes the enslavement. Will this wil be the next move?

  9. The author bases their line of thought on a presupposition that China will offer oil futures backed by gold and America will not respond and will allow to ruin its economy. Well, China is not the first one who tries to bring America down. No one has ever succeeded so far. I don’t think America will sit flat and do nothing in response.

    • Rodney,

      How can America respond? Maybe the U.S. Govt should print more money? I am not sure that you are aware, but the U.S. has exported all of its mine supply and imports overseas for the past six years. Some years it was a deficit.

      That being said, the U.S. Shale Oil Industry is in BIG TROUBLE. Without cheap and abundant oil, the United States will disintegrate. Now, I am not a fan of that outcome, but that is what the facts show.

      steve

      • “BUT THAT IS WHAT THE FACTS SHOW” So true Steve…

        You here it all the time on TV and in private discussion. The world has abundant energy, it is every where. Oil, coal and gas are NO, No,s! We just have to learn how to use the power of the plant, sunlight and wind, technology will save the day.

        It is all OPINION, ASSUMPTION, ASSERTION, or INNUENDO; the moment you talk FACTS you are an outsider. Life is too comfortable for many.

        I intend to stick with the FACTS for the moment until I know otherwise!

        Thanks for your FACTUAL research Steve 🙂

    • What does that mean? I am looking for something to hang on to here. It is not my intent to offend but I realize that none of us are in a position to simply say, “America will rally as it had done so in times past.” Rodney, how will America respond? How do you know this is not written in stone and agreed upon by those that call the plays(nation states and those who influence them)?

      One thing we know is that America will protect its interests but are those interests overlapping or central to your own interests? As we have discovered over the last decade, governmental/banking/wall street interests are not, in many cases, aligned with main street. Ex…Wall Street profits greatly and yet overall wages remain low? I am thinking most Americans would be happy if the “Trickle Down Effect” returned. I feel compelled to write a blues or country song entitled, “Trickle Down Baby Come Home…Daddy misses you and Momma is all alone…the dog took the last shoe…what am I now to do…trickle down baby come home….”

      With that being said, I think I will continue to listen to what Steve and these other guys are saying so I can at least understand the game I am in. I don’t mind playing the game, just teach me the rules.

      • A system that doesn’t work anymore, stops working. Be it a gold standard, or a reserve currency. Net energy declines as we speak. What does that mean? It means growth is over. Fiat currencies depend on growth, so fiat currencies will blow up, first slowly, then suddenly. And with it, savings accounts, pensions, debt etc. All paper goes down the toilet. First slowly, then suddenly.

        My guess is the system is moving to a financial crash, deliberately orchestrated by tbtf. There’s no other choice. A crises is needed to have an excuse for blowing up peoples imaginary wealth. And move to local, more physical, economies. Hardship, dead people. I cannot imagine tbtf doesn’t know what is going on. Watch what they do, not what they say. They have to push the world economy to a much lower level, without blowing up essential hubs.

        Go local. My two cents, i think there’s a plan. Another world war is not an option, they know it. The world is much more interconnected. Growth is over, its not about prosperity anymore, its about survival.

  10. Steve,
    You’ve probably seen this on Zerohedge, but I thought I’d post it for those who haven’t.
    http://www.zerohedge.com/news/2017-09-08/venezuela-about-ditch-dollar-major-blow-us-heres-why-it-matters

    • I saw that Tom, thought that was interesting. People have to realise their governments can print their own money. It is free money (Public Money)and its wealth lies within its own borders. It is what they do with that free money, infrastructure, trade and so forth and it can include Gold and Silver. Free money can run parallel to private money.

      It just doesn’t suit the bankers!!!!!

  11. In Europe, gas at the pump is already like $1.5 per liter, which would be > 5$ per gallon. Though much of the price difference to the US is due to heavy taxation, you will get higher prices as the earth’s global oil net supplies are dwindling (EROEI -> 10,… 5, … 3, 2, 1 = TEOTWAWKI) at a time where over-indebtedness is met with more of the same. The global economies are already sick to the core and the implosion of the US energy sector will speed things up tremendously in a rather nasty way; just Florida is facing IRMA, the world IS facing a collapsing debt ponzi based upon an unsustainable energy source. Thanks Steve for all your great work!

    • Never mind Europe CHX13, petrol (Gas) at the pump here in Australia is currently around $1.40 per litre and can get as high as $1.60 per litre. It has been around these prices for some years!

  12. Hello Steve,

    You said you were going to write about how much money it cost to mine bitcoin. Are you still going to do that?

  13. Hi Steve.

    Heard your interview on SD and you were mentioning crypto currencies and how they were more or less a descent hedge but you still preferred PMs. My question is when energy prices rise significantly will that drag up crypto prices or pull them down? You will never need copious amounts of energy to store and transact gold and silver, but as it stands Bitcoin alone consumes now as much energy as Jordan and that’s not just to mine but to also Transact/verify. Continuous energy consumption keeps it alive, so will higher energy costs kill it?
    Check out Digiconomics.com, they have good information about the energy consumption of cryptos.

  14. Steve, I think its time to get real. All this talk about the antagonism between China and the US is all smoke and mirrors. Do you honestly think for one minute China would do anything to disrupt business with their biggest customer ‘the US consumer’, conversely would the US do anything to disrupt business with their biggest supplier.
    Think about the consequences if trade would cease to exist between the two countries. That’s why it pisses me off when people don’t use simple logic when they discuss geopolitical issues.
    For me it all pure fear mongering and the population buys it hook,line and sinker.
    BAU will continue until we see actual physical shortages at the pump.

    • Their biggest ‘customer’ thinks it’s OK to pay in promises of a currency backed by nothing, which China already has something like a trillion in hand and can hardly spend fast enough to staunch the flow. This is not a sustainable relationship.

    • Craig Moodie,

      I thought I was getting REAL… LOL. I gather we have a different opinion of what is REAL and what is not. Unfortunately, I don’t have the time to get into the details here. However, I am putting together a new post that might offer some insight.

      steve

  15. First of all the article said that the crude futures contract was being tested on the Shanghai International Energy Exchange and on their official website and press releases there in no statement that the yuan can be converted to gold or backed by gold. The original article came from a Japanese site and said that the yuan would also be fully convertible to gold on the Hong Kong Exchange but this is a stock exchange and there is no method here to convert the yuan to gold and there are no plans to do so.
    Second of all the Chinese are not stupid and they know by making the yuan convertible would strengthen the yuan and collapse their exports, their economy and the new silk road project. In fact the yuan was pegged to a basket of currencies which included the dollar but because of dollar strength for over a year they removed the dollar. In addition the PBOC just gave permission to currency traders in London to short the yuan. Does this all sound like they are going to convertibility? Of course not.
    They also know that the US would exchange the stronger dollar for the weaker yuan and then drain their gold reserves. Simply not going to happen!
    In addition China has over $22 trillion in liquidity and all of this would have to be backed. The total amount of gold ever mined at today’s prices in $7 to $9 trillion. Where are they going to get the gold?
    Another problem is that an economy needs a constant flow of new liquidity so it can grow and this forces the country to constantly buy gold. Also you must always buy gold to replace what went out the gold window. No country on the planet can afford to do this. The US was forced off the system because they could no longer do the above and this was when price was fixed at only $35. Folks this as all delusional nonsense!
    The major oil firms in the US wet dream is to have all the independents especially the frackers go under as this would remove 2-4 million bbls a day and cause oil to move much higher. Like all commodities when producers go under supply is decreased and then prices rise. This is ECON 101 folks.
    If you have been paying attention the FED has went into panic mode as they need a much weaker dollar and to stop the capital flight out of Europe into dollars and dollar based assets as the euro, the EU, most of its banks and countries are in serious financial trouble and will all collapse in 2018 when both the Sovereign Debt and Monetary Crisis hits. They have been attempting to jaw bone markets down even bringing out the big banks and Greenspan and Rickards. Hell they even marched out the head of the CME claiming gold should be at $5000 with Rickards claiming $10,000. Then they had a BoA analyst claim gold was ready to take off. Then they had Goldman claim gold is a currency and the head claiming all markets are overvalued. Then the fake China story. Folks are we seeing a pattern here yet? This shows how desperate the FED is.
    The alt media has fallen for all this nonsense hook, line and sinker and simply mindlessly repeats it without any research. Common Core has been one great success!

  16. Just curious, at what point does the slide in the dollar index uncouple itself from a mostly correlated inverse relationship to the rise in precious metals… but instead start acting like an exponential multiplier of PM prices?

  17. Thanks Steve, regards

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