Trump Favors Returning To The Gold Standard – China Launches Crude Oil Futures Contract In Yuan – Convertible Into Gold.

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by Ruby Henley
When Donald Trump was campaigning to be President, he said in an interview with Renee Montagne:   “Bringing back the gold standard would be very hard to do, but, boy, would it be wonderful. We’d have a standard on which to base our money.”
In 1971 President Nixon made a terrible mistake when he made the decision to suspend the convertibility of the dollar into gold.  The dollar did become and remains the world’s global currency, but at what price?
When the United States started to use  “credit,” it went from being a privilege to a liability. The debt grew rapidly, as the Fed printed dollars unbacked by gold or silver.
However, as we look back on history, we see that F.D. Roosevelt took a  drastic step during the depression to end the gold standard.  Roosevelt was faced with the responsibility of handling a declining economy, and the Country was suffering.
To be fair by the time Nixon became President we only traded gold for dollars with other countries, and we only did that when push came to shove.  In the 1970s unfortunately the value of US currency versus other currencies degraded so badly our gold reserves were more valuable than our currency.
As more dollars were printed, the world went on a gigantic shopping spree.  So when Nixon took the oath of office, most of our reserves were gone. He completed the act of taking the Country from the gold standard to the debt standard.
Some economists say there was never a time in which the government had an amount of gold, or even silver, equal to our currency. There were only short periods of time when the dollar could be redeemed for gold or silver by American citizens.  
The main reason some economists reject the gold standard is they believe it actually constricts the ability of the economy to grow.  Further, it guarantees permanent deflation, makes spending harder, and freezes the flow of money.    
I am not an economist, but I believe we should have bitten the bullet and kept the gold standard. I think we are going to regret that we did not, as now we need billions of dollars to rebuild Texas.  However, morally we have no choice, as we must take care of our suffering citizens and the infrastructure of the United States.
President Trump has said many times we must rehabilitate our crumbling infrastructure.  Now we have more to do than ever, and we must move ahead and do it.  How are we going to pay for Hurricane Harvey?  President Trump has ordered the Fed to print more money, and he knows this is the only way to rebuild Texas.
The United States is facing more strife at this time in history than ever before.  I truly believe this, and it is  going to take  strength and innovation to meet this challenge.  We have no choice – we have to reboot this Country, and we must put Texas first.  
We are facing another challenge, as China has just announced it will soon launch a crude oil futures contract priced in yuan and convertible into gold.
China’s move will allow exporters such as Russia and Iran to circumvent U.S. sanctions by trading in yuan. To further entice trade, China says the yuan will be fully convertible into gold on exchanges in Shanghai and Hong Kong.
“The rules of the global oil game may begin to change enormously,” said Luke Gromen, founder of U.S.-based macroeconomic research company FFTT.
The Shanghai International Energy Exchange has started to train potential users and is carrying out systems tests following substantial preparations in June and July. This will be China’s first commodities futures contract open to foreign companies such as investment funds, trading houses and petroleum companies.
China has long wanted to reduce the dominance of the U.S. dollar in the commodities markets. Yuan-denominated gold futures have been traded on the Shanghai Gold Exchange since April 2016, and the exchange is planning to launch the product in Budapest later this year.
The existence of yuan-backed oil and gold futures means that users will have the option of being paid in physical gold, said Alasdair Macleod, head of research at Goldmoney, a gold-based financial services company based in Toronto. “It is a mechanism which is likely to appeal to oil producers that prefer to avoid using dollars, and are not ready to accept that being paid in yuan for oil sales to China is a good idea either,” Macleod said.  END OF QUOTE
Are we gearing up for a battle in Congress over Hurricane Harvey? The Federal government actually goes through three distinct stages when responding to a natural disaster such as Harvey:

  1. Life – saving stage – saving as many lives as possible. (We are currently in this stage.)
  2. Short term recovery – the restoring of power facilities – moving ctizens back into their homes if possible – and finding shelter for the homeless.
  3. Government rebuilds infrastructure.

Congress must now face how it will keep on funding agencies like FEMA.  FEMA only has enough money to last through the end of September.
The National Flood Insurance Program has to be renewed by September30.  If Congress does not extend the program millions of Americans will lose their flood insurance.
But Congress must not make the mistake by playing politics with the victims of Hurricane Harvey.  This would be unacceptable to President Trump and to all Americans.

As we move ahead Jim Cramer has some advice for Investors:
He says these stocks will go up:

  1. Weyerhaeuser
  2. Louisiana-Pacific and USG
  3. Martin Marietta Materials
  4. Owens Corning
  5. Beacon Roofing

“The rebuilding effort will be so enormous that, while the hit to the U.S. economy from Houston short-term going offline will be noticeable, it will also be very ephemeral compared to what will happen when the reclamation project begins,” the “Mad Money” host said.
“This could even extend to a spike in autos and truck sales, as the Houston Automobile Dealers Associated says there could be half a million vehicles damaged by the storm,” Cramer continued. “Can they be replaced? Of course, because they have insurance, which means there’ll be lots of new orders, something Warren Buffett also hinted at today when he mentioned the liabilities of his own auto insurer, Geico.”
And unlike Hurricane Katrina, do-it-yourself retailers Home Depot and Lowe’s also have a chance to take part in the gains, Cramer said.  END OF QUOTE

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4 thoughts on “Trump Favors Returning To The Gold Standard – China Launches Crude Oil Futures Contract In Yuan – Convertible Into Gold.

  1. Careful, Donald. Remember what happened to JFK when he wanted to switch to treasury backed currency. The System will fight tooth an nail to save their fiat currencies.

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