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This compilation of financial-related insights includes videos from Tech Revolution, Sean Foo, Joe Blogs, Mike Maloney, and Wall Street Journal.
Tech Revolution reports global central banks dumping trillions of Dollars for gold. Sean Foo talks about China’s response to Evergrande angering the West. Joe Blogs talks about Russia shooting itself in the foot with an interest rate hike that will reduce their GDP and push their economy into a recession. Mike Maloney explains how China just cheated the global economy and what the consequences are. Wall Street Journal reports on why Iran, Ethiopia, and other countries want to join BRICS.
Tech Revolution
Aug 21, 2023
The very foundation of international finance is being shaken, as a rising interest in the age-old symbol of wealth and stability emerges. Central banks around the globe are leading in a new era, one defined by a relentless pursuit of gold. As headlines from prestigious sources reveal, these financial giants are no longer content with the current situation.
The motivations are clear, a desire for stability, security, and insulation against a shifting economic landscape. But what does this unprecedented gold frenzy mean for the once-almighty dollar? Join us as we delve into the heart of this transformative shift, exploring the reasons behind central banks’ gold-buying spree. And the potential shockwaves it sends through international markets. The dollar’s dominance hangs in the balance, as the world witnesses an unstoppable gold frenzy.
An insightful International Monetary Fund blog suggests that this shift may be attributed in part to the diminishing prominence of the US dollar within the global economic landscape. The competition from alternative currencies utilized by central banks for international transactions has contributed to this evolving trend.
While the US dollar continues to retain a dominant presence in foreign exchange reserves worldwide. There are signs of divergence pointing toward a movement away from the greenback, as noted by JP Morgan analysts in June.
Recent data from the World Gold Council reveals a renewed interest in gold acquisition by central banks. Oh and also, last June, they collectively augmented their gold holdings by 55 metric tons, following three months of sales.
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Leading the pack, the People’s Bank of China, or the Chinese central bank, acquired 21 tonnes of gold in June. This marks the eighth consecutive month of purchases, resulting in an impressive 165-tonne increase in gold reserves since November 2022.
Notably, 103 tonnes were acquired in 2023 alone, making it the most substantial acquisition this year thus far. India has also positioned itself among the top purchasers of gold. In addition to China and India, other prominent gold buyers include Poland, Uzbekistan, the Czech Republic, and Qatar.
Reflecting India’s growing economic prowess, the Reserve Bank of India has boosted its gold reserves to 794.64 metric tonnes in fiscal year 2023, a nearly 5 percent rise from the 760.42 metric tonnes held in the previous fiscal year.
Over the past decade, India’s gold reserves have surged from under 600 tonnes to approximately 795 tonnes. The year 2022 witnessed a significant upsurge in net gold purchases by central banks, reaching 1,135 tonnes, the highest volume since 1967.
The IMF anticipates a continued decline in the US dollar’s share of global reserves, driven by emerging markets and developing economy central banks aiming to diversify their reserve currency compositions.
While the process of de-dollarisation is gradual, the current geopolitical and geo-economic uncertainties have underscored the importance of risk diversification in countries’ forex reserves, according to an economist from a prominent Indian bank.
Looking ahead, the BRICS coalition has expressed intentions to explore the development of a shared currency. Moreover, nations like India and China have been actively expanding international trade using their respective currencies.
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Fitch Ratings’ decision to downgrade the US government could exert additional pressure on the US dollar. Previously, the threat of a US default had significant global economic ramifications and tarnished the dollar’s image.
Notably, the US government has maintained an average deficit of nearly $1 trillion annually since 2001, as highlighted by the Council on Foreign Relations.
Fitch’s recent downgrade from AAA to AA+ is attributed to a sustained decline in governance standards over the past two decades, particularly concerning fiscal and debt-related matters.
And check this out. Maersk, that Danish shipping and logistics icon, just dropped a bit of news on Monday. They’re predicting a bit of a dip in global trade for the upcoming months.
Yup, the world’s heavyweight champion of container ships, Maersk, has a hunch that the growth in global container volume might slow down to somewhere between -4% and -1% in 2023. That’s a shift from their earlier prediction of -2.5% to +0.5%, so it’s catching some attention.
Sean Foo
Aug 22, 2023
Evergrande has filed for bankruptcy but does this mean China’s economy is about to collapse? China always had a real estate problem and instead of stimulating, they are actually trying to ride the wave towards a stronger economy. While this is bad for the global economy in the short term, it’s actually good for China long run. Here’s what you must know!
Joe Blogs
Aug 22, 2023
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Russia’s Invasion of UKRAINE has caused Major Problems for the Russian Economy as Trade with Europe & the West has collapsed and Changes to the Global Supply Chain caused by the SANCTIONS have caused further problems. The value of the Russian Ruble has COLLAPSED over the past 12 months and on Monday 14th Augurs was trading at MORE THAN 100 against the US Dollar for the FIRST TIME IN HISTORY. In response to this the Russian Central Bank called an EMERGENCY MEETING and increased interest rates by 350bps to 12%. In this video I discuss the implications of this interest rate rise on the Economy & how it could force Russian back into RECESSION.
GoldSilver (w/ Mike Maloney)
Premiered Aug 22, 2023
It’s no secret that China’s meteoric rise has completely shifted the global economic landscape…
But how did we get here?
In today’s video, Mike Maloney delves deeply into the pivotal role China plays in the global economy and the historical context behind China’s recent prosperity. In today’s video, you’ll find:
The shocking historical maneuvers that shifted the world’s manufacturing epicenter from the U.S. to China…
Analysis of recent events highlighting potential economic challenges for China.
Key sectors in distress: From stagnating retail sales to the alarming contraction in property investments, China looks to be in trouble…
And the latest on currency devaluation: Is the world on the brink of a financial domino effect?
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If you want to stay ahead of the curve and grasp the potential global implications of China’s economic tremors, this is one video you can’t afford to miss.
Wall Street Journal
Aug 22, 2023
The Brics economic alliance – formed by China, India, Russia, Brazil and South Africa – is considering an expansion, with more than 20 countries including Saudi Arabia and Iran having formally applied to join the bloc. Brics countries already make up more than 40% of the world’s population and almost a third of the world’s GDP.
WSJ’s Alexandra Wexler analyzes the membership frenzy and whether an enlargement can ultimately threaten the powerful G-7.
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