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Gold Backwardation-The Meltdown of All Meltdowns-Karen Hudes
USAwatchdog ^ | 09/18/2013 | Greg Hunter

Posted on 09/18/2013 11:53:51 AM PDT by Rusty0604

Former World Bank Senior Counsel Karen Hudes says, “It’s pretty clear where we’re headed, and that is something called permanent gold backwardation. That’s a fancy word for people losing confidence in paper currency.

Hudes says even though the credit ratings agencies rate U.S. debt high, they know just the opposite is true. Hudes contends, “This is actually an underhanded move because they know the U.S. dollar is going to lose its status as an international currency.” What would that look like to the man on the street? Hudes predicts, “Prices would change on a daily basis. They would double. The number of families that would be employed would be in the minority . . . there would be lawlessness.”

(Excerpt) Read more at usawatchdog.com ...


TOPICS: Business/Economy
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1 posted on 09/18/2013 11:53:51 AM PDT by Rusty0604
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To: Rusty0604

At least we would have a Black President! One must always look on the bright side.


2 posted on 09/18/2013 11:57:00 AM PDT by AEMILIUS PAULUS (It is a shame that when these people give a riot)
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To: Rusty0604

And my urban relatives want to know why I own gold silver and lead.


3 posted on 09/18/2013 12:00:18 PM PDT by muir_redwoods (Don't fire until you see the blue of their helmets)
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To: Rusty0604
The number of families that would be employed would be in the minority . . . there would be lawlessness

Sounds like many Lib cities today ...

4 posted on 09/18/2013 12:20:16 PM PDT by 11th_VA (I want a president who won't enforce tax laws ...)
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To: Rusty0604
Prices would change on a daily basis. They would double. The number of families that would be employed would be in the minority . . . there would be lawlessness.

Representatives of the Democratic [sic] party would dance in the streets.

5 posted on 09/18/2013 12:20:51 PM PDT by Standing Wolf (No tyrant should ever be allowed to die of natural causes.)
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To: Standing Wolf

Yep, mission accomplished for the Dems.


6 posted on 09/18/2013 12:22:06 PM PDT by Rusty0604
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To: Rusty0604

7 posted on 09/18/2013 12:22:22 PM PDT by BenLurkin (This is not a statement of fact. It is either opinion or satire; or both.)
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To: BenLurkin

Silver up too!


8 posted on 09/18/2013 12:23:15 PM PDT by Rusty0604
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To: Rusty0604

Not buying this.

The federal deficit dropped by 350 billion this year to 650 billion from over 1 trillion.

As well the trade deficit is shrinking because the USA is fracking its way to oil independence at the rate of 1 million barrels a day annually for the last three years. Estimates are that this increase will continue for at least the next 5 years.

The dollar has been trending up for the last three years. If the fed stopped printing money — the dollar would vault to the moon.

Nobody but nobody is going to be dumping dollars as a reserve currency. Not when capital flows are turning back in favor of the USA.


9 posted on 09/18/2013 12:39:54 PM PDT by ckilmer
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To: Rusty0604
 photo WHATINGODSNAME_zps6c350445.jpg

10 posted on 09/18/2013 12:41:46 PM PDT by Dick Bachert (Ignorance is not bliss. It is the road to serfdom.)
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To: ckilmer

Countries have begun trading with each other with their own currencies already.
And although fracking our way to oil independence is a good thing, that trade deficit will also mean less petrodollars out to be traded or invested in U.S. treasuries.


11 posted on 09/18/2013 12:50:03 PM PDT by Rusty0604
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To: Rusty0604

Countries have begun trading with each other with their own currencies already.
And although fracking our way to oil independence is a good thing, that trade deficit will also mean less petrodollars out to be traded or invested in U.S. treasuries.
..........
All true. But if the US deficit keeps falling—the need for foreign investment in US treasuries declines. That’s what’s in the cards right now. As long as the USA keeps adding 1 million barrels@ day annually to oil production—as it has for the last 3 years—the trade deficit and the federal deficit are going to keep falling. State government budgets of even incompetent blue states like California have already swung back in the black.

And as the trade and federal deficits decline —the pressure on the dollar is upwards—meaning that the dollars in foreign central banks gains in value. That puts downward pressure on both the price of oil and the price of gold.

For guys who are old enough to remember the 1970’s—ie US oil production peaked in 1970 and then declined sharply...— this environment is rewinding that decade backwards.

What does this mean for the QE’s. For now, the QE’s just keep the dollar from punching straight up.


12 posted on 09/18/2013 1:32:02 PM PDT by ckilmer
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To: ckilmer

I hope you are right as I do not wish for a dollar collapse. But I think the possibility is out there, especially if the gov’t continues to spend more than it receives (confiscates). If our increased oil production saves us, it will be in spite of the liberals, not because of them.


13 posted on 09/18/2013 1:38:41 PM PDT by Rusty0604
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To: Rusty0604

I hope you are right as I do not wish for a dollar collapse.
Look at this graph of the dollar index http://www.marketwatch.com/investing/index/dxy
The dollar has been trending up since 2011 (and generally sideways since 2008.) The two big pressures on the dollar are the downward pressure of the QE’s and upward pressure of rising oil production.

But I think the possibility is out there, especially if the gov’t continues to spend more than it receives (confiscates).
..............
True but government deficits are fast falling—just as they did in the clinton years when a rising economy and budget caps put in by Newt’s congress gave clinton his only bragging rights.

If our increased oil production saves us, it will be in spite of the liberals, not because of them.
.......
you have this exactly right.


14 posted on 09/18/2013 2:07:47 PM PDT by ckilmer
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To: ckilmer

‘Nobody but nobody is going to be dumping dollars as a reserve currency. Not when capital flows are turning back in favor of the USA.’

If people don’t agree with this, then buy my silver for $40.00 an ounce.


15 posted on 09/18/2013 2:40:49 PM PDT by WILLIALAL
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To: WILLIALAL

Here’s an inflation adjusted historical chart of gold and silver. It looks very much like we are doing a historical replay of 1980.

http://www.macrotrends.net/1333/gold-and-silver-prices-100-year-historical-chart


16 posted on 09/18/2013 3:28:13 PM PDT by ckilmer
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To: ckilmer
And as the trade and federal deficits decline —the pressure on the dollar is upwards

Yes. And as the dollar continues to rise, foreign imports get cheaper and cheaper causing the trade deficit to rise yet again. Floating interest rates are always and everywhere a disaster waiting to happen.

17 posted on 09/18/2013 3:52:12 PM PDT by BfloGuy (People who know what they’re talking about don’t need PowerPoint.)
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To: BfloGuy
Floating interest rates are always and everywhere a disaster waiting to happen.

That should have read "floating exchange rates are always and everywhere a disaster waiting to happen.

As are two stiff gin-and-tonics before posting.

18 posted on 09/18/2013 3:53:32 PM PDT by BfloGuy (People who know what they’re talking about don’t need PowerPoint.)
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To: Rusty0604

“One measure of wheat for a penny...”


19 posted on 09/18/2013 4:01:41 PM PDT by editor-surveyor (Freepers: Not as smart as I'd hoped they'd be)
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To: BenLurkin

Overall, we’ve gone nowhere on metals for quite a while.


20 posted on 09/18/2013 4:06:29 PM PDT by editor-surveyor (Freepers: Not as smart as I'd hoped they'd be)
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