There has been a call for a new gold-backed currency to replace the waning Federal Reserve petrodollar as the world’s reserve currency but, while it will undoubtedly play a significant role, gold will not likely be linked to one specific country as a new world reserve currency. This article explains why not and what that means for the future price of gold.
The above are edited excerpts from an article* by Michael Noonan (edgetraderplus.com) entitled Gold And Silver – Future For Gold As Uncertain As It Is Certain. Silver Will Lead/Follow.
The following article is presented by Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and the FREE Market Intelligence Report newsletter (sample here) and has been edited, abridged and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.
Noonan goes on to say in further edited excerpts:
Likelihood Of A Single Nation Gold-backed Currency
…For all the gold China has been accumulating this past decade, it is unlikely that China will back the yuan with gold. It would be too problematic for what it would do to its economy. Russia has been a lesser buyer of gold, but it also has tremendous reserves that it mines every year, adding to its holdings. Its natural gas resource has taken center stage as a backing for the ruble. Russia will also unlikely want to back the ruble with gold.[While there are ongoing] solidifying financial and economic ties between:
- China and Russia,
- China and several other natural resource rich countries, and
- the BRICS alliance,
a stronger possibility lies in contractual ties amongst all these countries, not a single nation gold-backed currency.
A perfect example is what will likely be concluded next week between between Russia’s Gazprom and China National Petroleum Corporation. All that needs to be finalized is the price but what will decidedly not be a part of the deal is any Federal Reserve Dollar as a part of the pricing mechanism, nor any use of the fiat “dollar.” Expect to see more and more international dealings by Eastern and BRICS nations that preempt the soon-to-be-former world reserve “dollar”…Russia’s Ministry of Finance has already announced plans to use the ruble in all future contracts as Russia takes more steps toward “de-dollarization.” China has been acting in a similar capacity as it has been making deals with several other countries, outside of the “dollar”…
Expectations for a gold-backed currency may be misplaced. It could happen, but it seems unlikely that the largest holders of gold have an interest in putting themselves at an economic disadvantage by pricing out their exports. However, within whatever the realm of uncertainty for gold’s specific role is, it will undoubtedly remain pivotal. Rising from the ashes of central banker suppression for the past several decades, it is certain that the price will go higher.
The best way to participate is to be prepared. The best way to be prepared is to already own physical gold and silver. The handwriting is on the wall.
Neither gold nor silver appear to be turning up, and for that look, we turn to our favorite topic, charts. [See here.]
Many say that the charts are irrelevant, but no one is pointing to anything else that is. For as long as we have been following markets via charts, those of gold and silver have told the most accurate story in the face of news and events that would suggest otherwise.
Before gold can rally, it has to first turn the trend from down to up. We see no evidence of a change in trend. The bearish spacing is repeated, again, as a reminder that it represents a weak market within its down trend. How anyone can posit a bullish scenario from what the charts show flies in the face of known facts, as depicted in the charts.
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
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