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Is it good for the US Dollar to be easily available around the world?

Cory
February 9, 2017

A questions was sent to me and Chris Temple from a listener regarding the US dollar and its use around the world. The statement and question is as follows: if the US decreases its trade deficit then US dollars will not be as available around the world in turn weakening its role as an international trade currency… Why is it good for the US to have the dollar used for international trade?

There is a lot at play in this question and general concept so Doc and I weigh in. Our conversation extends to central banks and the potential of unwinding their balance sheets.

Click download link to listen on this device: Download Show

Discussion
35 Comments
    CFS
    Feb 09, 2017 09:51 AM

    What’s up Cory……no commentary

      Feb 09, 2017 09:03 AM

      My bad CFS 🙁

      It is good to go now!

    CFS
    Feb 09, 2017 09:04 AM

    thanks

    CFS
    Feb 09, 2017 09:08 AM

    If all the US dollars held in reserves around the world came home to America, the dollar exchange would drop so severely you would look around and wonder if you had been teleported to Zimbabwe or Venezuela.

    Feb 09, 2017 09:09 AM

    ******IMPORTANT – Hey – it just dawned on me to share this link while the good ideas are flying back and forth.

    John Kaiser, Brent Cook, Joe Mazumdar, Eric Coffin, and Tommy are live chatting about tons of different drill plays and mining companies with over 100 people in the room over at CEO. Check it out and make sure to scan back up through all the old comments.

    Cheers!

    https://ceo.ca/~coreshack

      Feb 09, 2017 09:12 AM

      There are some really interesting, funny, and helpful tips these guys are giving out.

        Feb 09, 2017 09:46 PM

        Precious Metals Video Update: Gold Follows Miners Higher

        Jordan Roy-Byrne CMT, MFTA – Feb 8, 2017

        “Gold reversed its breakdown and followed the miners higher over the past two weeks. GDXJ is leading. We update our targets and discuss Gold’s performance in relative terms.”

        https://www.youtube.com/watch?v=aXLl1jHMlAc

      Feb 09, 2017 09:53 PM

      @tommy – “Do you remember that time we played “Who Would You Rather?” at Cambridge House?

      You all took Kaminak over Sabina. Congrats on that call. Can we do it again?

      * This time: Sabina or Victoria?
      _________________________________________________

      @JMNorthShore (Joe Mazumdar) – “Sabina”

      @JMNorthShore – “The non-technical Nunuvat Investment Review Board did not take the advice of the locals or the technical people and the Federal Gov’t noticed that”

      _________________________________________________

      @HRA-Coffin(Eric Coffin) – “Hmm… Maybe Victoria first, though I think $SBB has the larger gain potential from here once the permitting is dealt with. There have to be at least 3-4 miners thinking of pulling the trigger on that one. ”

      _______________________________________________________________

      @Brent_Cook – “Sabina, grade matters”

      ______________________________________________________________

        Feb 09, 2017 09:59 PM

        @tommy – “Questions about Moneta Porcupine…”

        @HRA-Coffin (Eric Coffin) – “$ME – waiting for drill results, and waiting, and waiting… You have to assume some missed holes by this point, or I am at least. I still like the deal, and its a play on a rising gold price, no pretense on that. It will do ok if they can pull some higher grade intercept but they really need to get news out this month.”

        @Brent_Cook – “OK, Moneta is a poor deposit with grade smeared across cry low grade rock. Very high internal strip IMO.

        “UNigold has small oxide but the sulfide is not best grade and again strip in high capex area. Close but no cigar. ”

        “New Gold straddled w/ Rainy River. ”

        ____________________________________________________________________

        @JMNorthShore (Joe Mazumdar) – “on TMAC, good team and the stock managed to hold its value well as it is tightly held. I know it as I was involved in its purchase when I worked for NEM. We got it wrong trying to build a very large open pit in the Arctic. They go it right going back to underground and smaller footprint. Risks are related to underground development and grade continuity which is not atypical for underground. Lot of infrastructure was already in place by NEM.”

          Feb 09, 2017 09:11 PM

          @tommy – “Where else do you want to speculate right now?”
          @tommy – “bitcoin has the volatility bid now, not gold”

          @Brent_Cook – “#1-Gold, followed by Zn, and Cu, for us. ”

          @HRA-Coffin (Eric Coffin) – ” Zinc definitely. Copper is looking better thanks to various disruptions.”

          @HRA-Coffin (Eric Coffin) – “I don’t mean in gold so much as in equities. Calm before the storm?”

          @Brent_Cook – “Shitstorm you mean. The most powerful man in the world is a lunatic. this cant end well.”

          @tommy – “Jim dines is a lunatic?”

          @JKaiser (John Kaiser) – “Gold because of uncertainty arising from Trump’s apparent abandonment of the post WWII order constructed by the USA, zinc because of western mine depletion and a possible Chinese supply decline arising from its environmental awakening. Nickel uptrend hinges on the extent Duterte shuts down the nickel laterite mines whose raw ore gets shipped to China for nickel pig iron furnaces.”

          @HRA-Coffin (Eric Coffin) – “Also how much nickel can come from other areas. There is a hell of a lot of laterite around. Maybe Cuba can be the new Philippines…not sure if that’s an insult or not. ”

          @tommy – “John, could you explain your nickel thesis quick? Think the rest of us need enlightening”

          @JKaiser (John Kaiser) – ” The type of laterite ore used in nickel pig iron is different from what is used in hpal operations to produce refined nickel. The result is a lower quality stainless steel suitable for China’s needs. The Chinese shift to NPI displaced demand for refined nickel, hence the nickel weakness. Countries with laterite deposits need to be willing to allow raw ore to be shipped abroad. Indonesia said no to that a couple years ago. Philippines indirectly starting to say no through the environmental channel.”

        Tad
        Feb 09, 2017 09:02 PM

        Nice one Ex. I had a look on the site and that was very interesting.
        Glad I’ve stuck with Sabina for the past 2 years….
        Thanks

          Feb 09, 2017 09:41 PM

          I traded it last year right after the news broke of them not getting their permit, for an oversold bounce and then exited (thanks to Brian’s head’s up).

          Recently I picked up shares at the very beginning of this year anticipating a news update, and when it came out the SBB really rallied hard, so I trimmed. Then I got worried this could be prolonged again and sold the rest.

          Well after that live chat today, and gathering that Joe Mazumdar, Brent Cook, and Eric Coffin were constructive on their high grade, increased confidence that they’ll get the permit this time, and mentioned the other larger miners watching with keen interest on the permit outcome, then I decided to pick up a small position today.

          The permit approval will likely move the stock higher, but the high grade and quality of their asset has put a target on their back as a takeover play. You gotta be in it to win it, right?

    CFS
    Feb 09, 2017 09:15 AM

    RALEIGH, N.C. (AP) — North Carolina’s first large-scale wind farm is fully operational despite efforts by some of the state’s most powerful politicians to shut down the $400 million project as a possible national security threat.

    Avangrid Renewables said Thursday its 104 wind turbines reaching 50-stories tall are now generating enough electricity for 60,000 homes. Amazon is buying the power produced in rural, northeastern North Carolina to run its Virginia data centers.

      Feb 09, 2017 09:12 PM

      they are such a beautiful sight………lol

      Feb 09, 2017 09:18 PM

      the people of Raleigh should be ticked off……

    Feb 09, 2017 09:47 AM

    I got rid of my recent diversified blue chips the past few days as my account took a big dent from these dead money stocks like Intc, Qcomm, KO etc. KO and Intel are falling hard now despite the new s&p highs. I will just stick to trading XOP mainly as I can always get out on extreme up moves. I went back to BP with 2k shares yesterday as it became a bargain as well as added more XOP (4500 now) which became a bargain down in the 38.50 area and now it is 40. Will hold a big At&t position which is safer high yielder.

    CFS
    Feb 09, 2017 09:03 PM
    CFS
    Feb 09, 2017 09:27 PM

    Chilean Workers Launch Strike At World’s Top Copper Mine
    Associated Press – 19 minutes ago
    SANTIAGO, Chile (AP) — Chilean workers are staging a strike at the world’s biggest copper mine.

    The stoppage by some 2,500 workers at the Escondida mine began Thursday over demands for a bonus payment, a salary hike and other benefits.

    President Michelle Bachelet’s government is calling for talks to resolve the dispute. Experts say the stoppage will reduce production and lift world prices of the metal.

    Chile is the world’s top copper producing country. Escondida is located in the Atacama desert and produces about 1.2 million metric tons of copper each year.

    The mine is majority owned by Australian mining company BHP Billiton Ltd.

    CFS
    Feb 09, 2017 09:31 PM
    Feb 09, 2017 09:54 PM

    I got kicked out of NUGT today for 11.7% net profit. Still hanging on to my USLV. Making a KILLING on ASM. Bought a small position on JNUG on the pullback. Up 25% on my PALAF.

    Feb 09, 2017 09:57 PM

    Canadian Mining Hall of Fame hails five industry leaders: Zigarlick, Vaughan, McLeod, Carter and McEwen

    Salma Tarikh and John Cumming – February 9, 2017

    http://www.northernminer.com/people-in-mining/canadian-mining-hall-fame-hails-five-industry-leaders-zigarlick-vaughan-mcleod-carter-mcewen/1003783349/

      Feb 09, 2017 09:01 PM

      Sandstorm Gold: This Is Excellent News
      Feb. 8, 2017 Gold Mining Bull (5,123 followers on Seeking Alpha)

      http://seekingalpha.com/article/4044052-sandstorm-gold-excellent-news?auth_param=c9otd:1c9nbae:ea27500e55b01506eabf97f931a85c35&uprof=45

        Feb 09, 2017 09:40 PM

        Teranga Gold (TGZ) – What The Analysts Are Overlooking
        Feb. 2, 2017 – Gold Panda

        Summary in the article:

        – “Teranga seems undervalued and there are some major catalysts for the company that analysts have missed.

        – funding of Banfora, Sabodala mine plan and nearby projects as well as major shareholder activity.

        – A brief look at Teranga’s 2017 exploration program….”

        http://seekingalpha.com/article/4041853-teranga-gold-analysts-overlooking?auth_param=c9otd:1c961q6:870554f64681782b90c5e29063fc368d&uprof=45

          CFS
          Feb 09, 2017 09:45 PM

          I own shares in Teranga.

            Feb 09, 2017 09:50 PM

            I do as well. A very well run company that has an excellent growth profile, and yet is seems only a few are paying attention to it. Their acquisition of Gryphon Minerals last year was incredibly well done, and the market hasn’t properly reflected that value yet either.

          Tad
          Feb 09, 2017 09:08 PM

          I like Teranga (think we’ve discussed this Ex) but it’s taken a beating.
          I’m sure it got hit harder than most.
          I’m underwater on that one at the moment; been a good performer before though… and I haven’t changed anything, like size of holding. Guess it will catch up later in the year.

            Feb 09, 2017 09:22 PM

            Hi Tad. If you mean it took a beating since it’s summer highs then I’d agree with that, but I’d caution that like all stocks, that are always moving up and down, then it really depends on your entry point, if you averaged down, if you trimmed on the upleg rallies, and ultimately what your cost basis is.

            My position is in the money, sitting pretty, and looking forward to a nice ride as the bull market unfolds in the next 2-3 years. Originally I positioned last year for small gain, trimmed a big part of that position in the late summer when it started slipping, and added much more in Nov & Dec of last year. It has put in a nice rally from the end of last year to the first part of 2017 and has been consolidating sideways. However, the 50 day EMA is getting close to taking back the 200 day EMA, so that would be quite constructive.

            If you are underwater at present, then I wouldn’t worry about it as it is going much higher in the longer term. If it dips down into PM weakness in the mid term, then I’ll be adding even more. Teranga is a company I’m very comfortable holding onto for the long game.

            http://stockcharts.com/h-sc/ui?s=TGZ.TO&p=D&yr=1&mn=0&dy=0&id=p19456332750

            Feb 09, 2017 09:30 PM

            I probably should add that another contributing helper was that a big part of my position last year came over during the Gryphon merger, where I had picked up a lot of extra margin on that arbitrage trade, and when those converted over I trimmed some of those winnings right away, and avoided exposing all that position to the slump that hit all the miners in the latter part of 2016. The bigger prize though was buying shares at the end of last year (during tax loss selling time – one man’s trash is another man’s treasure 🙂 )

            My strategy was to do the seasonality trade once again and for the 3rd year in a row it worked well to buy near the holidays and heavy into the year end on depressed shares, and ride them back up in Jan/Feb. Currently, I’m waiting to see if we get one more surge after this little dip before lightening back up in some miners, but I’m cautious of us rolling over here moving into March. Time to stay vigilant.

    CFS
    Feb 09, 2017 09:18 PM

    Epstein end of day metals:

    https://www.youtube.com/watch?v=1R0bpExUddw

    Feb 09, 2017 09:44 PM

    Opinions on what comes next with gold and silver?

    Feb 09, 2017 09:54 PM

    NEI to Wall Street: Nuclear Energy Is a Cornerstone of American Infrastructure

    Nuclear Energy Institute – February 09, 2017

    https://www.nei.org/News-Media/Media-Room/News-Releases/NEI-to-Wall-Street-Nuclear-Energy-Is-a-Cornerstone

    Feb 09, 2017 09:55 PM
      Feb 09, 2017 09:09 PM

      Mt Cattlin #Production Update

      “Galaxy $GXY.AX $GALXF is pleased to announce it has successfully reached 90% of nameplate #throughput with peak feed rate at 95% of design. During February, the Mt Cattlin Operations will continue to increase its throughput and is expected to reach the nameplate design of 210tph within the next week.

      The Company has scheduled its second #lithium concentrate shipment for late February, with the vessel MV Blessing SW called for an estimated berth on or around 24 February. The #shipment will contain an anticipated 15,000 WMT (plus or minus 10%) with product grade averaging 5.5% Li2O and a low 2% mica concentration.

      Recent feed grades of 1.1-1.3% are in line with reserve modelled grades. Ore BCM is currently exceeding short term schedule with a ramp up of mining equipment in February to maintain the long term schedule.”

      http://www.asx.com.au/asxpdf/20170210/pdf/43fx527hpsln9f.pdf