Thanks for the response Bill. I know your an extremely busy man and don't have the time available to hold my hand and walk me through the world of finance. The little expertise I have lies in the fields of farming and steam power generation. The ownership of gold shares has caused me to stumble into an interest in world financial matters which I find fascinating . Hopefully others can tolerate my naivety and occasionally find the time to expand my understanding, as I say it's fascinating.
Currently my mind is questioning this plan for Asean to come up with a currency more under their own control to be used for trade in the Asian region. The major currencies now in use are all subject to their respective countries internal requirements, debt, unemployment rates, trade deficits etc.
The use of their own currencies are subject to manipulation by external forces (hedge funds etc.) in some cases more powerful than themselves.
Because of this it would seem to me to be desirable to determine a local currency free of debt which could be used by all Asean to carry out business and trade. This is why I wondered about the possibility of the Singapore dollar. A small economy ,centred in Asia, hub for trade,shipping ,already setting itself up technologically to be a major regional financial centre for the area. Politically stable, independent yet interlocked with all the concerned parties. Already the regions transportation hub for goods and people, why not the transportation hub for finance?
I would appreciate an explanation from someone why Singapore and its currency would not be appropriate or acceptable as the base for this currency system.
Regardless of what is used for the regional currency, as you have said ,it will have some gold backing. If we consider an amount of 10,000 Tonnes as appropriate at least initially, this equates to about $100 billion U.S. (correct?) Although we have no proof an amount of gold this large has been bought buy Asean, it doesn't mean it hasn't. Nobody even knows what Japanese bank debt is within a 100 billion so it could be done without public knowledge. The Chinese accumulated American nuclear secrets for 20 years with it becoming public knowledge. My point being just because we cannot see it on the books, doesn't mean it is not being accumulated in an amount of this size. Somebody has been buying gold or gold paper in amounts of this size (correct?)
Now .if the Asean bloc told the rest of the world governments they are determined to go ahead with this plan, regardless of whether they were in favor or not, they will require gold. If the stated requirement to the world CBs is 10,000 tonnes how would be the best way to go about getting that gold from the present holders to the future Asean holder?
#1 Ask the central banks to publicly announce the sale of a portion of their gold holdings to be used in the new Asean currency as backing.
#2 Have the central banks downplay the value of gold, creating the impression of continued depreciation of gold value. At the same time lease out enough gold that would be sold into the market at an ever decreasing price, until the Asean accumulation is accomplished. This accomplishes the objective, while in fact the central banks still retain their gold or at least an equivalent demand on some other currency. The banks can raise the cost of leasing at any time, insuring a healthy profit for a considerable time, also by lease rates control the increase in value of gold ( as lease rates are increased a point will be reached where it is financially better to pay up to obtain gold to close out the lease, if lease rates are kept low enough the loan could continue indefinitely. I suppose the loan could even be demanded to be paid off in Asean currency dollars.
If this new currency is inevitable, gold backing of it is inevitable, which method would be used #1 OR #2? As far as an increase in gold price and its relationship to inflation, this would be more of a supply /demand thing and not an inflationary omen.
Any of this hold water as to a possibility of what has, is and will be happening?
Or should I just go back an stoke the boiler,ha,ha.-mike |
