Wednesday, November 04, 2009

India joins China in dumping US Dollar assets.

The end of US Dollar hegemony is a lot closer than the government is admitting or anyone on Main Street realizes.

Financial Times Online
Gold extends record high on India purchase
By Javier Blas in London and James Lamont in New Delhi
Published: November 3 2009 09:08 | Last updated: November 4 2009 09:51

Gold prices continued to rise on Wednesday extending the all-time highs which followed India’s central bank bought 200 tonnes of the precious metal, swapping dollars for bullion as the country’s finance minister warned the economies of the US and Europe had “collapsed”.

India’s decision to exchange $6.7bn for gold equivalent to 8 per cent of world annual mine production sent the strongest signal yet that Asian countries were moving away from the US currency...

...“This is a landmark trade,” said Jonathan Spall a director at Barclays Capital and a gold ­specialist. “Central banks are conservative institutions and India’s move is a sign for other central banks and sovereign wealth funds that were contemplating buying gold.”

New Delhi’s acquisition came months after China revealed it had almost doubled its gold reserves in the past six years...

They're contemplating buying gold because they are contemplating the fast-approaching day when the US defaults on its international debts and US T-bills and Dollars become completely worthless.

The average person has no way to even prepare for such a day - institutional buyers such as other governments and giant transnational companies are buying all available gold, which is why the price is soaring. While buying silver bullion and silver coins might be decent strategy, or even just buying any metal objects, most households simply don't have enough cash lying around to buy a hoard of silver coins or copper pipe sufficient to get them through a currency crisis.

And our communities have not made any real efforts over the last four years to become self-sufficient, in spite of having numerous reasons to do so: peak oil, climate change, fighting globalization (relocalization), and knowing that the Feds continually pumping out dollars 24-7 on the printing presses would cause inflation or something worse - like this. We knew, and have done nothing to prepare. Like the Chereidi who think they can not work and still get money, we don't think anything like this can happen to us. The rest of the world wouldn't DARE drop our business - they NEED us, right? Right? Wrong.

Like the Chereidi, our grasp of reality is sadly lacking.

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