Wednesday, May 14, 2014

Currency Wars: Russia Holds "De-Dollarization Meeting": China, Iran Willing To Drop USD From Bilateral Trade


  C.S. We are going into the next stage of The Currency Wars when our previous discussions on this blog are getting into the headlines from Kremlin. Geopolitical map of the world is being re-drawn as we speak now. Our Global Village  is getting to the good old street on street fight. The reason is simple: There Is Not Enough. You can print money and manipulate equity market in to the All-Time-High for a while, but you can't print Oil, Copper, Gold and other commodities without which any growth is impossible. We all need to eat in between of our sessions on Facebook and even Google search will not bring us food into the mouth yet. Our dear Apple is really great, but we can not eat iPads even if their prices are "deflationary". We need Gas, Fertilisers and even more Oil to grow our Food and deliver it. 
  Have you noticed that with global growth in economy being barely above the water and China's "Collapse" Oil prices are strongly north of $100 mark? Where is all that Shale Oil and Gas? What will happen when economy will start growing for real?

  China knows is too well that is why it is buying resources all over the world, including Copper and Lithium. It has the military plan of Electrification of its Transportation and for Alternative Energy. Just check the numbers on Wind and Solar Power installations in the world. Energy Storage is the next stage and Lithium is at the core of it. Now China benefits from all these games and manipulations in the Gold market and buying best Copper deposits in the world.

  Have we mentioned already that poor Ukraine has been caught between the rock and the hard place? That nobody really cares about its Independence or its Proud People? That Joe Biden son has joined the board of the major Gas producer  in Ukraine? Or that it is all really about China? Empire has the only one resource left - its Military Complex (Industrial part of it gone, but Nukes are here) and it is playing the very dangerous game to leverage it and slow down China.

  Can even the good Golfer who is spending more time on the Greens than in the War Room fight with the Bear Hunters or Shaolin Masters? This is the question two charts are talking about. US Dollar above, which is playing with dangerous 80.00 level after breaching 79.00 once already these weeks; and Gold below, which is harder and harder to break down below MA200.
  Nobody knows the future, but the one outcome is already here: due to stupidity and arrogance the world has another Tsar  and will have one more retired Golfer ...

US Dollar Dives Below 79.00 - How Long Can They Keep Gold Down? GLD GDX TNR.v MUX NG ABX

  "US Dollar dives this morning and is breaking down the all-crucial 79.00 line in the sand. At the moment of writing we have 78.94. Our rhetorical question of the day is how long manipulation can keep Gold down in this environment? Now yesterday's attack on Gold can be put in the new totally dramatic perspective of today's US Dollar Melt Down."

Eric Sprott: The Chinese Gold Vortex - Do Not Miss This Golden Opportunity GDX TNR.v MUX

  "CS. Gold is building a very strong reversal pattern after resent correction. The only problem is that we are not the only one watching this chart closely and manipulators are trying to paint the breakdown on the chart above. In the normal market this picture will indicate very strong Bull market, building the base after The Golden Cross to make its Second Bull Leg Up. We have the close right above the MA200 at $1,300 and Bollinger Bands suggest that volatility will increase dramatically. Will "They" be able to break Gold down again? This is the question which will separate boys from the men again. The most important for us that this technical picture reflects the fundamentals Eric Sprott is talking about in his article." 

Ukraine, Syria And Global De-Dollarization: USD To Go Down And Gold Up TNR.v MUX RGLD GDX GLD ABX

 "What is connecting so different countries as Ukraine and Syria? The big chess game played by the U.S. and Russia. Syria needs to be "liberalised" in order to build pipelines for the natural Gas to be supplied from Qatar  to Europe. Russia and China have blocked that game and they have Ukraine revolution 2.0 now. Putin's dream is to rebuild USSR as the Eurasian Union and Ukraine is the key to his success. He will not back out of it easily. One thing is an insult in the ice hockey defeat by the U.S. in Sochi and another thing is to lose "Small Russia". On the map below you can see why Ukraine is so important geopolitically, it is all about Energy again. Key supply natural Gas routes from Russia to Europe are crossing this country." 


Russia Holds "De-Dollarization Meeting": China, Iran Willing To Drop USD From Bilateral Trade

"That Russia has been pushing for trade arrangements that minimize the participation (and influence) of the US dollar ever since the onset of the Ukraine crisis (and before) is no secret: this has been covered extensively on these pages before (see Gazprom Prepares "Symbolic" Bond Issue In Chinese YuanPetrodollar Alert: Putin Prepares To Announce "Holy Grail" Gas Deal With ChinaRussia And China About To Sign "Holy Grail" Gas Deal40 Central Banks Are Betting This Will Be The Next Reserve Currency; From the Petrodollar to the Gas-o-yuan and so on).
But until now much of this was in the realm of hearsay and general wishful thinking. After all, surely it is "ridiculous" that a country can seriously contemplate to exist outside the ideological and religious confines of the Petrodollar... because if one can do it, all can do it, and next thing you know the US has hyperinflation, social collapse, civil war and all those other features prominently featured in other socialist banana republics like Venezuela which alas do not have a global reserve currency to kick around.
Or so the Keynesian economists, aka tenured priests of said Petrodollar religion, would demand that the world believe.
However, as much as it may trouble the statists to read, Russia is actively pushing on with plans to put the US dollar in the rearview mirror and replace it with a dollar-free system. Or, as it is called in Russia, a "de-dollarized" world. Read more."

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