Y’all watching China

a reply to: AugustusMasonicus

You are correct that China does not hold the most US debt and that they don't buy the most US bonds. But that isn't what this is about.

Your assertion about a commodity based currency being too volatile and easily manipulated is completely backwards. Currency backed by commodities is always more stabile and less easily manipulated than fiat currency or worse yet, digital currency. An ounce of gold is an ounce of gold, regardless of who has reserve currency status. Yes, it can be manipulated, but it affects all players equally. If China wants to lower the value of a gold backed currency it will affect them just as much as it will affect us. That is the beauty of a commodity based currency. No nation can say, "Our gold is worth more than yours."

The way this will be manipulated in the future is as I described earlier. The commodity of choice will be one that is abundant in China/Russia but not the US. There are such commodities and we will have little say in which one a Sino-Russian pact will choose. They can devalue that currency as much as they need to in order to put us in a default situation, likely without putting themselves in the same position simply because they have more of it.

Of course, its all speculation until it happens. No one is right or wrong... yet.

originally posted by: Vroomfondel
Currency backed by commodities is always more stabile and less easily manipulated than fiat currency or worse yet, digital currency. An ounce of gold is an ounce of gold, regardless of who has reserve currency status. Yes, it can be manipulated, but it affects all players equally. If China wants to lower the value of a gold backed currency it will affect them just as much as it will affect us.

Christ, you're naive. If China stupidly made a rare earth backed currency all we, or anyone else, would need to do is produce more rare earths, flood the market and devalue their currency. It's that simple.

The value of their currency is pegged to the spot price of those commodities, if there's more of them then the price goes down.

a reply to: Vroomfondel

Once again, long winded and pendantic post do nothing to further your ignorance.

Secondly, again, I'm sorry you're misinformed about the role of world reserve currency. Not only that, but your misinformed viewd about some wonder currency that'll replace the USD are simply naive an nothing more than doom porn.

If you can't understand the role and obligation as a reserve currency, what's the point of arguing? Shouldn't you be stacking gold, silver and grain?

This is why no one takes you seriously and the comical part? You're paying in USD, you're entire life is dependent off USD, as well as the dunces that star your post to include the overwhelming amount of ignorance displayed from your fellow patrons.

Since you're unable to grasp the material fully, I thinl it's best to leave you to your paranoias while we look at next generation solutions to monetary policy.

originally posted by: AugustusMasonicus

originally posted by: Vroomfondel
Currency backed by commodities is always more stabile and less easily manipulated than fiat currency or worse yet, digital currency. An ounce of gold is an ounce of gold, regardless of who has reserve currency status. Yes, it can be manipulated, but it affects all players equally. If China wants to lower the value of a gold backed currency it will affect them just as much as it will affect us.

Christ, you're naive. If China stupidly made a rare earth backed currency all we, or anyone else, would need to do is produce more rare earths, flood the market and devalue their currency. It's that simple.

The value of their currency is pegged to the spot price of those commodities, if there's more of them then the price goes down.

This is an excellent article but the last part is most important

www.scmp.com...

Merriman said that it is unlikely China’s dominant position in the rare earth industry will be toppled without significant shifts in the investment strategies of Western governments.

“In the US, it will be a process of starting small and building the supporting industries, however, so the process will take a long time before bearing any sizeable fruit.”

a reply to: JAGStorm

That's basically saying, as we've been saying, the capacity to mine rare earth is within US ability and can be of significant advantages.
I can think of just two areas off the top of my head, however, A.) you're just proving alternatives to chinas claim as top miner simply because we don't want to do it and B.) See Augustus post above.

We've had discussions before involving rare earth minerals and they lead to moot points, so...

China and Russia have been booted about the place by the west for decades, these things are cyclical, we were always going to get our come uppance.

The greed our politicians have has led to this.

a reply to: JAGStorm

That's nice, but it has zero to do with backing a currency with those ores. There are enough rare earths in Western nations to upset any type of rare earth backed currency almost immediately. It's stupid premise to even consider.

There is also no need for pelosi to go, they know what they are starting with this.

originally posted by: AugustusMasonicus
a reply to: JAGStorm

That's nice, but it has zero to do with backing a currency with those ores. There are enough rare earths in Western nations to upset any type of rare earth backed currency almost immediately. It's stupid premise to even consider.

That’s like saying we have enough people in the US to work at McDonalds but yet they are still looking for workers.

It’s not just about the product, it’s about the processing. Rare earth minerals aren’t really rare, but maybe the processing and finished product is. A product the Americans and many other countries are addicted to.

Remember during covid when there weren’t masks. We have tons of sewing machine and fabric here yet masks were’t readily available until China started sending them…

There is a reason we’ve been buying their cheap crap for decades. Maybe rare earths backed money is stupid, maybe not, but I’m sure we’ll find out.

a reply to: JAGStorm

That still does nothing to support creating a currency backed by rare earths. Buying cheap crap is irrelevant since anyone can disrupt that currency by extracting more minerals.

originally posted by: AugustusMasonicus
a reply to: JAGStorm

That still does nothing to support creating a currency backed by rare earths. Buying cheap crap is irrelevant since anyone can disrupt that currency by extracting more minerals.

So do tell, if it is sooo easily replaced why haven’t we?
Isn’t that the million, or billion, or trillion dollar question.

We haven’t because it takes time, it’s expensive, it’s polluting.

originally posted by: JAGStorm

originally posted by: AugustusMasonicus
a reply to: JAGStorm

That still does nothing to support creating a currency backed by rare earths. Buying cheap crap is irrelevant since anyone can disrupt that currency by extracting more minerals.

So do tell, if it is sooo easily replaced why haven’t we?
Isn’t that the million, or billion, or trillion dollar question.

We haven’t because it takes time, it’s expensive, it’s polluting.

You literally answered your own question.

Also...

While China is dominant now, in the decades before the 1980s it was the U.S. that held a majority stake in this metals market. That changed as production growth abroad and mounting environmental pressures at home shifted production overseas and also offered cheaper labor costs. According to one 2018 report from the Department of Defense, China "strategically flooded the global market" with rare earths at cheaper prices to drive out and deter current and future competitors. 

Source: www-cnbc-com.cdn.ampproject.org... amp_js_v=a9&usqp=mq331AQKKAFQArABIIACAw%3D%3D#amp_tf=From%20%251%24s&aoh=16588859521837&referrer=https%3A%2F%2Fwww.google.com&share=https%3A%2F%2Fw ww.cnbc.com%2F2021%2F04%2F17%2Fthe-new-us-plan-to-rival-chinas-dominance-in-rare-earth-metals.html

That quote alone dismantles this whole thread.

originally posted by: AugustusMasonicus

originally posted by: Vroomfondel
Currency backed by commodities is always more stabile and less easily manipulated than fiat currency or worse yet, digital currency. An ounce of gold is an ounce of gold, regardless of who has reserve currency status. Yes, it can be manipulated, but it affects all players equally. If China wants to lower the value of a gold backed currency it will affect them just as much as it will affect us.

Christ, you're naive. If China stupidly made a rare earth backed currency all we, or anyone else, would need to do is produce more rare earths, flood the market and devalue their currency. It's that simple.

The value of their currency is pegged to the spot price of those commodities, if there's more of them then the price goes down.

As usual, you missed it entirely.

First, the whole idea of a commodity based currency from China/Russia is that its based on commodities they have more of than we do. That means they have more control over it than we do. Why would China/Russia pick a commodity we would have more control over than them? It fits your narrative, but it won't happen that way.

Second, producing more commodities isn't the easiest or fastest thing to do. If it was, we would all have tons of gold sitting around the house....

Currency is not pegged to spot price in such a manner that if the price of the commodity drops 1% your dollar is now only worth 99 cents at the store instead of a whole dollar. The face value is still recognized since the fluctuation in price affects the buyer and seller equally. A dollar is a dollar, even if it temporarily only has 99 cents worth of true buying power. It still equals out since the sellers products are equally devalued.

a reply to: Arnie123

I love it when fools try to come off all superior and completely blow it...

I am not misinformed and its not MY view.

"The matter of creating the international reserve currency based on the basket of currencies of our countries is under review," Putin told the BRICS Business Forum on Wednesday, according to a TASS report. "We are ready to openly work with all fair partners."

Why don't you go tell all these other nations how stupid they are for thinking they can create a new reserve currency? I don't think they got the message from that giant brain of yours...

The dollar has long been seen as the world's reserve currency, but its dominance in share of international currency reserves is waning. Central banks are looking to diversify their holdings into currencies like the yuan, as well as into non-traditional areas like the Swedish krona and the South Korean won, according to the International Monetary Fund.

Wow, the IMF thinks the dollar is losing its dominance. I guess that means something else is gaining dominance...

"This is a move to address the perceived US-hegemony of the IMF," ING's global head of markets Chris Turner said in a note. "It will allow BRICS to build their own sphere of influence and unit of currency within that sphere."

Hmmmm..the INGs global head of markets understands it. His opinion seems to be the exact opposite of yours and a lot more like mine. How could that be? I am all naive and misinformed and confused, right? I guess the IMF, and ING are too... But not you. Noooo... Not you. Couldn't be...

I don't understand this stuff at all, according to you anyway. But I was wondering if you could explain why the IMF has its own international reserve asset, the SDR, which is based on a basket of currencies including the USD, Euro, Pound, Yen, and Yuan. Its not a reserve currency, but was created by the IMF to supplement other reserve currencies of its member nations. That sounds a lot like what China/Russia is trying to do, doesn't it?

I decided to waste my time and give you the benefit of the doubt. I did some research on reserve currency. I did not find one single article anywhere that even remotely suggested that as the holder of the reserve currency it is our obligation to assume other nations debt as you stated earlier. Nothing even remotely close. I looked at five different articles from reputable sources; wallstreet, schwab, IMF, investopedia, business professor. Not one of them mentioned anything other than what I said earlier: the reserve currency is intended to make international business easier, faster, and more stable. Thats it. Nothing about any of the nonsense you asserted. If you insist you are correct, how about a link to credible data? I am willing to look at it if you can find it.

a reply to: Arnie123

Hahahahaha! Cnbc? Why don't you quote corn-pop too....lmao

I quote the IMF and ING, you quote cnbc.

I think we're done here.

a reply to: Vroomfondel
Yes, you're misinformed.

Secondly, you need to post your source so that we may dissect it and understand who and what is filling your head with non sense.

None of the "research" you did was accredited and or sourced in anyway. If this represents the epitome of your research abilities, it's no wonder many don't buy into your views.

All in all, I would refrain from consuming opinion by those who's interest are non-American.

The sooner you realize that, the sooner you'll be off this pendantic train of ignorance.

originally posted by: Vroomfondel
a reply to: Arnie123

Hahahahaha! Cnbc? Why don't you quote corn-pop too....lmao

I quote the IMF and ING, you quote cnbc.

I think we're done here.

However, you've provided no valid rebuttal and you're still pretty ignorant about the concept of, "world reserve currency".

More so, once you demonstrate some knowledge, we can resume the convo.

originally posted by: Vroomfondel
a reply to: JAGStorm

You are not a Debbie downer, you are just observant and honest.

And you are absolutely correct: this is the biggest ponzi scheme ever. We built enormous wealth in this country with credit. Now the bills are due and they aren't getting paid. You simply can not solve a credit crisis with more credit. You can delay the inevitable, but you cant solve the problem, only make it worse.

Its like the wolf of wall street is running the economy... never cash out, keep everything circulating...

originally posted by: JAGStorm
So do tell, if it is sooo easily replaced why haven’t we?
Isn’t that the million, or billion, or trillion dollar question.

We haven’t because it takes time, it’s expensive, it’s polluting.

Replacing the dollar with a basket of rare earths is NOT easy, that's my point.

originally posted by: Vroomfondel
Why would China/Russia pick a commodity we would have more control over than them? It fits your narrative, but it won't happen that way.

They wouldn't, which is why they wouldn't pick rare earths which are in abundance outside of those two nations. Yu can have the most of something but if you don't have control of nearly all of it the spot price can be manipulated. You're not even factoring in industrial usage and the influence on currency because you're idea is incredibly short sighted.

Second, producing more commodities isn't the easiest or fastest thing to do. If it was, we would all have tons of gold sitting around the house....

Would we? We all have personal gold mines? FFS.

Currency is not pegged to spot price in such a manner that if the price of the commodity drops 1% your dollar is now only worth 99 cents at the store instead of a whole dollar. The face value is still recognized since the fluctuation in price affects the buyer and seller equally.

LOL. That's the definition of pegging, the commodity goes down and so does the currency value since it now takes more of that currency to purchase outside your system.