China and the BRICS nations are working right now to de-dollarize and the key for them and especially China is to back their currencies with gold.
As I understand it, China is setting up a system whereby trades in the Yuan can then be traded for gold thereby passing the dollar, and other systems are being set up for countries to trade in the yuan, or their own currencies, once again bypassing the dollar.
Behind closed doors most nations are looking to neuter Trump's power by forming new trading alliances, and China especially is playing hard ball to challenge his power.
In the last two months the US debt has increased by one trillion dollars, to 38 trillion, and the "shadow" banking system looks shaky e.g. recent losses by sub prime companies and the Bahama's 1.7 billion 50 to 100 leverage of bonds.
As you know the dollar has depreciated by almost 10% this year so far, so bond holders are losing money, so the dollars attraction as a reserve currency is diminishing.
Point being, the world has become very circumspect about the US financial stability going forward, and its economic stability, and is why I think both countries and central banks will continue to buy gold.
As you say, what can replace the dollar? The world once again sees gold as an alternative.
As far as silver goes, it will follow gold regardless, and I think the evidence is clear both investment, and industrial demand for silver has increased substantially.
I would also look for the ratio of gold to silver to decrease back toward its record low of 40 to 1.
PS, and yes copper demand should explode.
JMO |
