Jim Willie on currency wars and the rejection of the US dollar

Episode 98: GoldMoney’s Alasdair Macleod talks to Jim Willie of GoldenJackass.com, publisher of the “Hat Trick Letter”. They discuss his recent article on the currency wars and the rise in non-US-dollar-based trading.

They talk about China’s increasing use of yuan swaps in bilateral trade. Sanctions on Iran have led to an increase in trade settled in gold, with Willie pointing out the intermediary role of Turkey in this matter. Jim and Alasdair also discuss deindustrialisation in the United States and the subsequent destruction of capital; with Willie mentioning the mysterious outflow of gold classified as “industrial supplies” out of the US.

They discuss the pressure on the dollar due to the declining importance of the dollar in international trade, and how the US Dollar Index (USDX) is understating the true decline in the dollar’s value. Willie also talks about the Treasury Bond bubble and how interest-rate swaps are supressing yields.

Finally they talk about China, and the possible introduction of a gold trade note by which gold could become the basis of trade settlement. Willie speculates about the actual non-reported amount of gold held by China.

This podcast was recorded on 8 February 2013.

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Alasdair started his career as a stockbroker in 1970 on the London Stock Exchange. In those days, trainees learned everything: from making the tea, to corporate finance, to evaluating and dealing in equities and bonds. They learned rapidly through experience about things as diverse as mining shares and general economics. It was excellent training, and within nine years Alasdair had risen to become senior partner of his firm. Subsequently, Alasdair held positions at director level in investment management, and worked as a mutual fund manager. He also worked at a bank in Guernsey as an executive director. For most of his 40 years in the finance industry, Alasdair has been de-mystifying macro-economic events for his investing clients. The accumulation of this experience has convinced him that unsound monetary policies are the most destructive weapon governments use against the common man. Accordingly, his mission is to educate and inform the public in layman’s terms what governments do with money and how to protect themselves from the consequences.

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