Founders Sunday: From Gold Standard to Petrodollar- How The US Did It
Hi all.
This past Sunday we spent some time on The Gold Commitment of Trader analysis, which looked promising, but didn’t bear any directional fruit.
We moved to the Gold/ Yen relationship and why something is off in Japan.Tied that to the last time the Yen weakened like this, 2015.
One of the members correctly noted the high likelihood of Yen carry trades being put on now as a consequence of ROW hiking while Japan still hadn’t generated real inflation yet
Someone else commented about Petrodollar viability as it ties to Gold, The Ruble etc given recent events. We then spent a decent amount of time reviewing the birth of the petrodollar, how it was supported, and what is materially changing now. A historical perspective.
Notes:
From our 2017 post Golden Yuan: Crude Backed By Gold is Here:
Then : Gold > USD > PetroDollar
Create Gold Demand: 1944 we steer world towards gold for good reason (we have it, and Germany's lack of Gold was the cause for WW2)
Inflate Debt: 1971 we have to monetize debt to pay for wars in vietnam and korea > go off gold standard
Create USD Demand: 1974 cut Arab deal USD for Oil > we sell them military arms, they buy UST
Passcode at bottom
This Sunday, a deep dive into Yield curve inversion.
Enjoy