Loading ...US Debt Compared To The Rest Of The World
Not good https://tradingeconomics.com/country-list/government-debt-to-gdp
$22 trillion debt, approximately $20 trillion GDP, so well over 100% now. That’s one very good explanation for de-dollarization and why the Dollar is going down into its cycle low. Way down.
Of course being the reserve currency gives the US dollar a large step up on the other currencies. Especially when you factor in the Euro – Greece, Italy, Portugal, and of course the Japanese Yen.
Yes, well, if folks walk away from the $$, where, pray tell, will they go – to which other currency? As bad as the dollar deserves to be, it seems to be head and shoulders (see what I just did there?) above all the others. As in, our form of government is the really bad, except that it’s better than the alternatives. We’ve been singing “The Dollar Drop” for years, yet it chugs along, and alternatives, other than the stock markets, look worse than the dollar. Will the dollar eventually get its just desserts? Yup, but not now, and not for awhile. Abandon the dollar, and it HAS to go into gold/silver and PMs. Nowhere else to run…..
Hey, we beat Congo and Bhutan. And we’re just behind with Jamaica. What’s not to like?
I thought the “explanation” for why PM’s and commodities should rise now is because of the nature of asset supercycles. So why try to posit an explanation that all of a sudden the US debt matters when it didn’t really matter a year or two ago?
Are we interested in what the dollar will do for its own sake, or primarily because of what it implies for gold valued in US dollars? Can’t gold rise against all currencies while the dollar index rises? Can’t gold fall in Pounds and Euros while the dollar index falls?
If we’re going to look for “fundamental” reasons(using today’s reading of current events) for gold’s rise, just read above what Silverboom says. One can argue persuasively that the US dollar is the best of a lousy bunch and therefore the DXY will rise. What will that say about gold in US dollars? Nothing, if cycle theory means anything.
The point is that the dollar index is going down in my view. I’ve been asked why. I ‘ve posted the chartology which says why. I’ve posted the fundamentals that say why (the US is a basket case, with bigger debt to GDP than almost every other country – 10th on the list of over 100). If you want to ignore the charts fine. If you want to ignore the fundamentals fine. I’m just answering the question.
“If you want to ignore the charts fine. If you want to ignore the fundamentals fine. I’m just answering the question.”
No, I don’t want to ignore them. I’m very interested in what happens to the dollar because I’ve made other currency investments based on my belief that the dollar index will fall. I was mostly trying to point out that even if I believed the dollar index was going to rise that I would still be buying PMs now. In fact, that’s precisely what very helpful people like you have taught me, so thank you!
I believe I misunderstood your comments Curly Top (easily done on the web), so apologies. The US debt doesn’t matter ‘all of a sudden’. I’m saying that it is another factor in a huge jigsaw. Beyond a certain debt to GDP ratio (around 90% I think) it begins to be mathematically impossible to pay it off without very high (or hyper) inflation. The realisation of this is gradual at first, and then very, very rapid. I don’t know when the turds will really start to hit the fan, but it’s something you have to keep in the back of your mind.