Gold Speculator

I love gold but I’ve turned*bearish. [While I admit]*if the Greeks were to quit the euro that gold could face a short-term bull wave I believe gold’s fundamentals are [too] weak to support the current price. [Here are 8 solid reasons why.] Words: 685

So says Balaji Viswanathan in edited excerpts from his original article* as posted on Seeking Alpha.
Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.

*Viswanathan goes on to say, in part:

Gold has gone up over the past 13 years from around $250 in 1999 to $1,920 last year before correcting down to $1,620 or so. There are four factors that helped the rise of gold:

A period of sizable inflation (particularly in the commodity prices) from about 2002 to 2008.
A period of uncertainty in the global markets (2008 to the present), including the financial crisis of 2008 and the eurozone troubles in Greece and elsewhere.
The introduction of gold ETFs that allowed investors in the developed markets to bet on the yellow metal.
The growth in India and China, where consumers got more prosperous over the past decade and bought a lot of jewelry. In fact, China is now the world’s biggest consumer of gold.
[Be that as it may], however,*I believe gold’s honeymoon season is over and it could face significant downward pressures in the next few months. The following chart from the World Gold Council’s Q1 2012 report paints a picture of weak demand (look at the negative values in the highlighted portion of the chart).

Source: World Gold Council

I detail below the reasons why gold could go down:

The Asian jewelry market is slowing down. The World Gold Council*reported that the markets all over Asia are seeing a drop in jewelry demand (India -19%, Saudi Arabia -17%, Thailand -8%, Turkey -16%, Vietnam -10%).
The use of gold by industries fell 10% Q1 2012 (y-o-y), amounting to 10 tonnes of reduced gold consumption. The electronics industry is a major consumer of gold and the overall weak sales there will further reduce gold demand.
The rise in gold prices has prompted explorers around the world to prospect even more keenly for gold reserves. Mining production has grown 5% this year, due to the renewed efforts in gold exploration.
In India, the fast rise in gold prices, coupled with a drop in the rupee and the slowdown in the Indian economy, has priced out most of the middle class from buying gold. Bloomberg*reports that**”demand for gold and silver fell by about 20 percent to 25 percent this year because of higher taxes and prices… Investment demand dropped 46% and jewelry demand fell 19%.
While Mexican and Russian central banks are busily adding gold to their portfolios, the demand from other central banks is dropping. In Q1 2011, the demand was 137 tons, while in Q1 2012, it was a little more than 80 tons.
Inflationary pressures across the world have receded. Gold is typically seen as a hedge against inflation and normally tracks inflation in the long run. With the slowdown in the Indian and Chinese economies, along with the ever-increasing bad news flowing in from the eurozone, inflation fears have quickly evaporated from investors’ minds. Demand is expected to lag behind supply in most of the world, including in the emerging markets.
The Indian wedding season, which makes for one of the largest consumption periods for gold, is over and June-September is typically a dull season for the gold industry in the country. The seasonal factor is expected to put pressure on gold in the short term.
Chinese gold consumption growth is also falling as the major cities in the country reel from the economic slowdown. Though the growth is still positive, it is probable that Chinese consumers might follow the path of their counterparts in the rest of Asia.
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[The above are my reasons for being]… bearish on gold right now. [As I said at the beginning of the article]… in the long run, I believe the gold fundamentals are [too] weak to support the current price.

*http://seekingalpha.com/article/6587…iew&ifp=0**(To access the above article please copy the URL and paste it into your browser.)
Editor’s Note: The above article may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

Related Articles:

1. Hathaway: Next Round of QE Will See Gold, Silver and Mining Stocks Go Ballistic! Here’s Why

“Even with the prospect of no QE, if you believe the Fed, gold has not made a new low [since December] so, in my opinion, the absence of QE is priced into gold. On the other hand, if market conditions hit emergency levels, the central banks will be forced to their knees and they will be doing QE by whatever name it’s called. I think at that stage you are going to see gold go ballistic because it will be an admission of failure on the part of policymakers….If investors don’t do something now and take advantage of this funky period we are in, this daily grind of back and forth, they are going to be paralyzed. They will just be bystanders when gold finally takes off.”

2. Update: 51 Analysts Now Maintain that Gold is Going to $5,500 – $6,500/ozt. in 2015!

Lately analyst after analyst (161 at last count) has been climbing on board the golden wagon with prognostications as to what the parabolic peak price for gold will eventually be. That being said, however, only 51 have been bold enough to include the year in which they think their peak price estimate will occur and they are listed below. Take a look at who is projecting what, by when and why. Words: 644

3. Goldrunner: Fractal Gold Analysis Says Gold On Way to $3,500 Mid-year!

Our Fractal Model suggests the wave for Gold in US Dollars will sweep up into the $3500 to $3600 area into the mid-year time-frame. The leading edge of that time-frame begins in May and extends out for a few months. A potential for Gold to spike to a $3900 extended fib level exists. Like all parabolic moves in Gold, the late stages create the biggest price movements. Personally, I would be happy with a huge Gold run up to the $3200 level. Words: 1400

4. Is Gold About to Go Parabolic to $3,495 in June ’13; $10,899 in Sept. ’14 and Top Out at $32,659 on Jan. 16, 2015?

According to a recent Elliott Wave theory analysis gold is about to go parabolic reaching $3,495 in June 2013, $6,233 in April 2014, $10,899 in Sept. 2014, $18,712 in December 2014 and culminating in a parabolic peak price of $31,672 on January 16th, 2015! See the chart below. Words: 600

5. David Nichols: Expect to See $2,750 – $3,000 Gold By June 2013 – Here’s Why

The interim peaks in gold have been spaced 21 months apart over the past 6 years and have seen gains from 80.2% to 97.3%. As such, given the fact that the low of this last correction came in at $1,524 four months ago, we can expect gold to reach a new peak price of $2,750 to $3,000 in 17 months time (i.e. June/July 2013). [Let me explain in more detail.] Words: 976

6. Leeb: Gold Going to $3,000 Before the End of 2012!

The Fed is [going to] keep interest rates at zero until the end of 2014 [and that] is as aggressive as it gets and as bullish as it gets for gold. Inflation will be let out of the bag, maybe for the next three to four years. In this environment gold and silver are the best investments around…We are really talking about the next leg higher in this bull market…This is the leg I expect to take gold to $3,000 before the end of 2012.

7. Rebound Ratio Suggests New High for Gold By Mid-year

[While] some investors are frustrated,, and a few are worried that gold seems stuck in a rut [such a] stall in price has happened before…[but has] always eventually powered to a new high…[Let’s] examine the size and length of past corrections and how long it took gold to reach new highs afterward. Words: 740

8. GOLDRUNNER FRACTAL ANALYSIS: 2012 SILVER TO $70++

Around this point in the fractal cycle in the late 70’s, Gold busted out of its channel to rise sharply higher, along with Silver. Silver’s channel top will lie up around $68 to $70 over the coming months which we believe will be reached in 2012. The next higher angled resistance bands for Silver run from $112 to $115, and then up at the $123 area. By the end of the Silver Bull, we expect to see Silver reach $500+. Words: 1765

9. James Turk: Silver Will Climb to $68-$70 in 2 to 3 Months

Silver will climb to $68-$70 in 2 to 3 months once resistance at $35 is taken out… In many ways silver is positioned today like it was back in the summer of 2010… Regarding gold, as goes oil, so goes gold…and the bottom line is that the wind is at the back of the bulls in both the gold and oil markets.

10. Stephen Leeb: Silver’s Going to $60, $70, by the End of 2012 – Easy!

I think scarcity in oil is a dramatic tailwind for gold. Politicians will inflate. They don’t want oil to bring down the economy like it did in 2008. Remember, this inflation will take place with commodity prices already high. So this will create significant inflation. This means higher gold and silver. Gold at $3,000 by the end of the year, easy. Silver $60, $70, easy.

[You are being forwarned – again – that Europe and the U.S. are now on a collision course with a second Lehman-type megashock….A snowball of events -*bank runs spreading across Europe -*are*bringing us a few steps closer. What [can we expect]*next? Let me explain. Words: 1795

So says*Martin D. Weiss, Ph.D. (www.moneyandmarkets.com) in edited (marginally) excerpts from his original article*.
Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity � see Editor�s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.

Weiss goes on to say, and I quote:

This is not the first time we’ve warned you about an imminent financial megashock.
In our Money and Markets of December 3, 2007, we [forewarned you] specifically naming Lehman Brothers as the next major firm to collapse on Wall Street. (See “Dangerously Close to a Money Panic.”)
In our Money and Markets of March 17, 2008, precisely 182 days before its failure, we [again forewarned you]*naming Lehman, making it abundantly clear that it could be the trigger of a financial meltdown. (See “Closer to a Financial Meltdown.”)
Now, starting with last week’s edition, we are [fore]warning you of ANOTHER Lehman-type megashock.
A new telltale sign bank runs, the final nail in the coffin of any modern economy are spreading among the PIIGS countries of Europe � and possibly beyond.
In Greece it’s already a tsunami � a desperate effort by millions of citizens to get their money out of danger before Greece is forced to leave the euro zone.
In Spain, it’s quickly turning into a flood, as individuals and businesses � with $1.25 trillion in total bank deposits � wonder if their country will be the next to leave the union.
In Portugal, Ireland, Italy or even France, banks are vulnerable to similar outflows and, once the stampede strikes more than two or three major countries, you could see bank runs all across Europe.
[Does all of the above] sound familiar? It should, because last year we witnessed a very similar contagion when investors stampeded from the bonds of the weakest European countries. Much like today, the first to be attacked was Greece, the weakest link in the chain. Then, Spain, Portugal, Italy and even France got hit hard. Soon, nearly all of Europe was infected, prompting its central bankers to suddenly break their solemn vows of monetary piety and print more than $1 trillion worth of new euros but now, despite all those efforts, they’re facing a new contagion of a second kind � by bank depositors.

How Dangerous Are Bank Runs?

Bank runs are far more infectious, and dangerous, than investor stampedes they spill out onto the streets and onto the airwaves and*invoke frightening flashbacks to the Great Depression and they immediately threaten the entire banking system.

According to the New York Times, “the havoc that a stampede might cause to the Continent’s financial system would greatly complicate efforts by European Union officials to fashion a longer-term plan to ease the debt crisis and revive Europe’s economy, because authorities would have to cope with the staggering added costs of shoring up banks and a*bank run can happen very quickly.”
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Just as I explained here last week, the Times points out that it “was a similar liquidity crisis on Wall Street in September 2008 � which started with nervous investors pulling money from troubled institutions, then quickly from healthier ones � that set off the financial crisis.”

I repeat: It was just last Monday that I showed you how Europe and the U.S. are now on a collision course with a second Lehman-type megashock and here we are today, only seven days later, with the snowball of events bringing us a few steps closer.

Will This Time Be Worse Than 2008?

Politicians and investors all over the world are now trying to prepare for the inevitable consequences. What they don’t seem to realize is that the next major megashock could be more severe than the Lehman Brothers failure.

Never forget the key differences between then and now:
In 2008, it was strictly individual financial institutions that were on the edge of collapse. Today, entire nations are on the brink.
In 2008, the U.S. federal deficit of the prior fiscal year was $161 billion. Today, it’s $1.327 trillion, or 8.2 times larger.
In 2008, most of the megabanks at the epicenter of the crisis were in the United States. Today, although some U.S. megabanks are still taking excessive risk, it’s primarily the far LARGER European banks that are in the most trouble. In fact the weak European banks are so large, their total assets are greater than the total assets of ALL U.S. commercial banks combined.
In 2008, governments had not yet deployed their “big gun” cures for the debt crisis. So they still had the firing power to squelch the crisis with a series of unprecedented rescues. Today, we have seen the rapidly diminishing returns � or outright failure � of nearly every possible stimulus plan, bailout deal or austerity measures known to man.
In 2008, governments encountered little public resistance to major new policy initiatives. Today, millions of citizens are rebelling at the polls � or on the streets � in France, Greece, Portugal, Spain, Italy, and even Germany.
Most important, until late 2008, central banks restricted their role to traditional manipulation of interest rates. Now, however, four of the most powerful central banks in the world (the Fed, ECB, BOE and BOJ) have departed radically from tradition and embarked on the greatest wave of money printing in the history of mankind.
What REALLY Happened During -*and After the Lehman Collapse?

Over a single weekend in mid-September 2008, the Fed chairman, the Treasury secretary, and other high officials huddled at the New York Fed’s offices in downtown Manhattan to sseriously considered bailing out Lehman, but they ran into two hurdles:
Lehman’s assets were too sick � so diseased, in fact, even the federal government didn’t want to touch them with a 10-foot pole. Nor were there any private buyers remotely interested in a shotgun marriage.
Foreshadowing the public rebellion that would later bust onto the scene in the Tea Party movement, there was a new sentiment on Wall Street that was previously unheard of: a*small, but vocal, minority was getting sick and tired of bailouts. “Let them fail,” they said. “Teach those bastards a lesson!” was the new rallying cry.
For the Fed chairman and Treasury secretary, it was the long-dreaded day of reckoning. It was the fateful moment in history that demanded a life-or-death decision regarding one of the biggest financial institutions in the world � bigger than General Motors, Ford, and Chrysler put together. Should they save it? Or should they let it fail? Their decision: make a break with the past let Lehman fail.

As in the prior Bear Stearns failure, America’s largest banking conglomerate (JPMorgan Chase) promptly appeared on the scene and swooped up the outstanding trades and, as with Bear Stearns, the Fed acted as a backstop. Lehman’s demise was unique, however,*because it was thrown into bankruptcy and put on the chopping block for liquidation.

[You were forewarned of that collapse ] exactly 182 days earlier, when we warned that it could be the financial earthquake that would change the world and it was. Until that day, nearly everyone assumed that giant firms like Lehman were “too big to fail,” that the government would always step in to save them but that myth was shattered on September 15, 2008, when the U.S. government decided to abandon its long tradition of largesse and let Lehman go under -and that had major negative repercussuins:]
A major U.S. money market fund, the Reserve Primary Fund, immediately suffered a direct hit in its portfolio from exposure to Lehman securities, pushing its share value below $1 � an unprecedented event that spread panic in the entire industry.
Money funds, mutual funds and other institutions refused to buy the short-term IOUs (commercial paper) that thousands of companies rely on for ready cash.
All over the world, investors recoiled in horror, abandoning short-term credit markets � the lifeblood of the global financial system.
Bank lending froze.
Borrowing costs went through the roof.
Corporate bonds tanked.
The entire world seemed like it was coming unglued.
“I guess we goofed!” were, in essence, the words of admission heard at the Fed and Treasury. “Now, instead of just a bailout for Lehman, what we’re really going to need is the Mother of All Bailouts � for the entire financial system.” The U.S. government promptly complied, delivering precisely what they asked for:
a $700-billion Troubled Asset Relief Program (TARP), rushed through Congress and signed into law by President Bush in record time and, in addition, loaned, invested, or committed
$300 billion to nationalize the world’s two largest mortgage companies, Fannie Mae and Freddie Mac,
over $42 billion for the Big Three auto manufacturers,
$29 billion for Bear Stearns,
$150 billion for AIG, and $350 billion for Citigroup,
$300 billion for the Federal Housing Administration Rescue Bill to refinance bad mortgages,
$87 billion to pay back JPMorgan Chase for bad Lehman Brothers trades,
$200 billion in loans to banks under the Federal Reserve’s Term Auction Facility (TAF),
$50 billion to support short-term corporate IOUs held by money market mutual funds,
$500 billion to rescue various credit markets,
$620 billion for foreign central banks,
trillions more to guarantee the Federal Deposit Insurance Corporation’s (FDIC’s) new, expanded bank deposit insurance coverage from $100,000 to $250,000,
plus trillions more in bailouts and for other sweeping guarantees.
Governments of the UK and the European Union followed a similar pattern and everywhere, both inside and outside of government, apologists for these mega-rescues argued that it was “the lesser of the evils,” the only way to save the world from an even direr fate.

They were wrong, and we told them so on September 25, 2008 when Safe Money Report editor Mike Larson and I submitted a white paper to the U.S. Congress specifically documenting why the government bailouts would ultimately transform the debt crisis into a sovereign debt crisis. In effect, we argued, “Sure, governments can bail out big banks, brokers and insurers but when the next crisis strikes, who will bail out the governments?”…

Yes, with trillions in bailouts since the 2008 debt crisis, the governments of the U.S. and Europe were able to calm the waters and restore credit markets but no government anywhere can create wealth and prosperity with worthless paper, and no government can repeal the laws of gravity or change the laws of thermodynamics.

Summary

When investors sell bad government bonds, the value of those bonds must plunge, making it next to impossible for those governments to borrow. When savers run to safety, money must flood from the weakest banks to the strongest, making it impossible for the weak banks to survive. That’s what is happening now, and what will continue to happen in the weeks ahead, until (and unless) the authorities unleash a new wave of money printing that makes previous waves look puny by comparison.

Stand by for our team’s specific instructions on how to protect yourself and profit.

Good luck and God bless!

Martin

*http://www.moneyandmarkets.com/bank-…ext-49763**(To access the above article please copy the URL and paste it into your browser.)
Editor�s Note: The above article may have been edited ([ ]), abridged (�), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article�s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

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2. Economic Alert: If You�re Not Worried Yet�You Should Be

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6. The Coming Crisis in Europe Will Result in a MAJOR CRISIS in the U.S.! Here�s Why

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7. Ongoing European Crisis to Result in Higher Inflation and Higher Gold Prices � Here�s Why

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8. European Election Results Harbinger of Future U.S. Elections � Here�s Why

The implications for the elections in Europe likely portend what will happen in the U.S.. A similar revolt against incumbents [will] �sweep Obama�out of office but� the newcomers will be placed in the position of Sarkozy and other European incumbents. They will have to address the insolvency and eventual liquidity issues in similar fashion which will be viewed here as �austerity� or worse, �cruel and unusual� punishment. [So, how likely is that? Not very, because] politicians, by nature, are not courageous animals. Instead we will see more of the same: half-assed attempts to fool the people into believing that something is being done to solve the problems. [So what does the future hold for America?] Words: 631

9. U.S. Gov�t Making Preperations for Expected Major Social Unrest Next Year

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10. U.S. �Deficit Disorder� Means Broken Promises + Even More QE! Here�s Why

*

One of the problems with the debate over the �national debt� is that there�s no generally agreed upon definition of that term. Is it what the federal government owes, or what it owes foreigners, or what the whole country, private and public sector together, owes? Does it include off-balance-sheet items and contingent liabilities? There�s a hundred-trillion dollar gap between lowest and highest on this spectrum, which allows each commentator to confuse the rest of us by picking the measure that best suits their point of view. [Let’s try to decipher the true state of the nation.] Words: 1468

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15. The U.S. is Headed Toward a Complete and Utter Collapse of its Financial System

*
The U.S. is headed inexorably toward a systemic failure, a complete and utter collapse of the financial system. TARP and all the other machinations have not improved the underlying insolvency of the banking system. They have, however, deferred a collapse and ensured that it will ultimately be worse. [Let me explain.] Words: 1385
*
16. Get Ready for Financial Crisis 2.0 in 2012 � It�s Inevitable! Here�s Why
*

*
This analyst sees the perfect storm of converging criteria almost perfectly timed and aligned with the 2012 election cycle. When the moment arrives, the financial earthquake will rapidly demolish the existing highly precarious financial system. Government will stand by helpless, unable to shield itself, much less its vulnerable citizens or private financial institutions from the tsunami of debt and currency destruction. 2012 is shaping up to be the blockbuster main event of the ongoing financial crisis. Massive amounts of new debt, vast quantities of additional digital dollars and the spark of higher interest rates will set off version 2.0 of the credit-driven financial implosion. Let me explain. Words: 1443

Today, more than 60% of all foreign currency reserves in the world are in U.S. dollars but there are big changes on the horizon…Some of the biggest economies on earth have been making agreements with each other to move away from using the U.S. dollar in international trade…[and this shift]*is going to have massive implications for the U.S. economy. [Let me explain what is underway.] Words: 1583

So says Michael T. Snyder (www.theeconomiccollapseblog.com)**in edited excerpts from his original article* (which Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has further edited below for length and clarity � see Editor�s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.)

Snyder*goes on to say, in part:

China has the second largest economy on the face of the earth, and the size of the Chinese economy is projected to pass the size of the U.S. economy by 2016 [and projected to become three times larger than the U.S. economy by the year 2040 by at least one economist. [As such,]*China is sitting there and wondering why the U.S. dollar should continue to be so preeminent if the Chinese economy is about to become the number one economy on the planet. [Read: Why America Should Relinquish Reserve Status for its Dollar]

China, and other emerging powers such as Russia, have been quietly making agreements to move away from the U.S. dollar in international trade over the past few years [and, as such,]*the supremacy of the U.S. dollar is not nearly as solid as most Americans believe it to be.**[Read: The U.S. Dollar: Too Big to Fail?]
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As the U.S. economy continues to fade, it is going to be really hard to argue that the U.S. dollar should continue to function as the primary reserve currency of the world. Things are rapidly changing, and most Americans have no idea where these trends are taking us. [Read: Is There a Viable Alternative to the Dollar as the Reserve Currency?]

The following are 10 reasons why the reign of the dollar as the world reserve currency is about to come to an end:

#1: China And Japan To Use Own Currencies In Bilateral Trade

A few months ago, the second largest economy on earth (China) and the third largest economy on earth (Japan) struck a deal which will promote the use of their own currencies (rather than the U.S. dollar) when trading with each other. This was an incredibly important agreement that was virtually totally ignored by the U.S. media. The following is from a BBC report about that agreement:
China and Japan have unveiled plans to promote direct exchange of their currencies in a bid to cut costs for companies and boost bilateral trade. The deal will allow firms to convert the Chinese and Japanese currencies directly into each other. Currently businesses in both countries need to buy US dollars before converting them into the desired currency, adding extra costs.

*#2: The BRICS Plan To Use Own Currencies When Trading With Each Other

The BRICS continue to flex their muscles. A new agreement will promote the use of their own national currencies when trading with each other rather than the U.S. dollar. The following is from a news source in India:
The five major emerging economies of BRICS — Brazil, Russia, India, China and South Africa — are set to inject greater economic momentum into their grouping by signing two pacts for promoting intra-BRICS trade…The two agreements will enable credit facility in local currency for businesses of BRICS countries…[which is] expected to scale up intra-BRICS trade*that has been growing at the rate of 28% over the last few years but, at $230 billion, remains much below the potential of the five economic powerhouses.

#3: China and Russia*Use Own Currencies In Bilateral Trade

Leaders from both Russia and China have been strongly advocating for a new global reserve currency for several years, and both nations seem determined to break the power that the U.S. dollar has over international trade. [In fact,] Russia and China have been using their own national currencies when trading with each other for more than a year now. [Read: Will the Trickle Out of the U.S. Dollar Now Become a Torrent?]

#4: Use Of Chinese Currency Growing*In Africa

Who do you think is Africa’s biggest trading partner? It isn’t the United States. In 2009, China became Africa’s biggest trading partner, and China is now aggressively seeking to expand the use of Chinese currency on that continent.

A report from Africa�s largest bank, Standard Bank, recently stated the following:
We expect at least $100 billion (about R768 billion) in Sino-African trade � more than the total bilateral trade between China and Africa in 2010 � to be settled in the renminbi by 2015.

China seems absolutely determined to change the way that international trade is done. At this point, approximately 70,000 Chinese companies are using Chinese currency in cross-border transactions.

#5: China and United Arab Emirates To Use Own Currencies In Bilateral Trade

China and the United Arab Emirates have agreed to ditch the U.S. dollar and use their own currencies in oil transactions with each other.

The UAE is a fairly small player, but this is definitely a threat to the petrodollar system. What will happen to the petrodollar if other oil producing countries in the Middle East follow suit?

#6: India To Use Gold To Buy Oil From Iran

Iran has been one of the most aggressive nations when it comes to moving away from the U.S. dollar in international trade. For example, it has been reported that India will begin to use gold to buy oil from Iran. [See: Video: India to Pay for Iranian Crude Oil in Gold Instead of Dollars]

#7: Saudi Arabia Likely to Abandon*Use of*Petrodollar in Dealings With China

Who imports the most oil from Saudi Arabia? It is not the United States, it is China…Saudi Arabia and China have teamed up to construct a massive new oil refinery in Saudi Arabia…so how long is Saudi Arabia going to stick with the petrodollar if China is their most important customer? [Read:**2012: The Beginning of the END for the U.S. �Petrodollar�!]

#8: The United Nations*Continues to*Push For A New World Reserve Currency

The United Nations has been issuing reports that openly call for an alternative to the U.S. dollar as the reserve currency of the world. In particular, one UN report envisions “a new global reserve system…that no longer relies on the United States dollar as the single major reserve currency.”

#9: The IMF Has Been Pushing For A New World Reserve Currency

The International Monetary Fund has also published a series of reports calling for the U.S. dollar to be replaced as the reserve currency of the world. In particular, one IMF paper entitled “Reserve Accumulation and International Monetary Stability” actually proposed that a future global currency be named the “Bancor” and that a future global central bank could be put in charge of issuing it…. [Read: IMF Proposing New World Currency to Replace U.S. Dollar and Other National Currencies!]
A global currency, bancor, issued by a global central bank (see Supplement 1, section V) would be designed as a stable store of value that is not tied exclusively to the conditions of any particular economy. As trade and finance continue to grow rapidly and global integration increases, the importance of this broader perspective is expected to continue growing.

*#10: Most Of The Rest Of The World Hates The United States

Global sentiment toward the United States has dramatically shifted, and this should not be underestimated. Decades ago, we were one of the most loved nations on earth [but] bow we are one of the most hated. If you doubt this, just do some international traveling. Even in Europe (where we are supposed to have friends), Americans are treated like dirt. Many American travelers have resorted to wearing Canadian pins so that they will not be treated like garbage while traveling over there.

If the rest of the world still loved us, they would probably be glad to continue using the U.S. dollar but because we are now so unpopular, that gives other nations even more incentive to dump the dollar in international trade.

What will happen if the U.S. dollar’s reign*as the world reserve currency comes to an end?

The demise of the dollar will also bring radical changes to the American lifestyle. When this economic tsunami hits America, it will make the 2008 recession and its aftermath look like no more than a slight bump in the road. It will bring very undesirable changes to the American lifestyle through:

1. massive inflation,

2. high interest rates on mortgages and cars,

3. substantial increases in the cost of food, clothing and gasoline and*

4. the U.S. government is going to have a much harder time financing its debt. Right now, there is a huge demand for U.S. dollars and for U.S. government debt since countries around the world have to keep huge reserves of U.S. currency lying around for the sake of international trade but what if… the appetite for U.S. dollars and U.S. debt dried up dramatically? That is something to think about.

Conclusion

At the moment, the global financial system is centered on the United States but that will not always be the case. The things talked about in this article will not happen overnight, but it is important to note that these changes are picking up steam. Under the right conditions, a shift in momentum can become a landslide or an avalanche. [Read: What Would USD Collapse Mean for the World?]

Clearly, the conditions are right for a significant move away from the U.S. dollar in international trade. When will this major shift occur? Only time will tell.

*http://theeconomiccollapseblog.com/a…come-to-an-end *(To access the article please copy the URL and paste it into your browser.)
Editor�s Note: The above article has been has edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article�s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

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