It is now in the interest of US government that all oil be bought without using USD, as long as non-US government bonds are not used to store trade surpluses.
This has radical implications. It means Gold, and currencies of export oriented economies like Japan, and even Bitcoin are now more desirable. Because it is easier to settle trade imbalances using them.
Source: https://twitter.com/ces921/status/1772918400806715798
what does this mean for the retail investor?
@perfect_brains Most likely it means buy gold, buy Japanese stocks, buy silver, buy oil. But of these, perhaps only a few Japanese stocks, and silver still remain cheap. And silver will need a few years after cocoa goes up to go to the moon.
This 50 year chart is Cocoa (black) and Silver (Pink). Cocoa tends to lead silver with very sharp moves higher
@perfect_brains Currently only 1 in 5 barrels of oil is purchased without using USD. So the ramp up will be slow. So no need to rush
for a stocks-only investor, that excludes commodities futures
but it does not always exclude commodities, as commodities mfgrs sometimes trade on the stock market
problem with jp stocks is you are buying ADRs unless they trade in USD on an American exchange
@perfect_brains If you use IBKR as a broker, you can buy Japanese stocks directly.
Disclaimer: ~70% of my wealth is in Japanese stocks I bought last year, ~13% in gold i bought in 2022, ~13% in Bitcoin i bought in 2022
So may be my analysis is biased.
what currency is the JP stock in?
you will have to pay the exchange rate before you can cash out, won't you?
@perfect_brains Those stocks are in JPY. I own gold to protect me against JPY devaluation.
usually they say sell in May, so I wonder if cocoa stocks will do well in summer
@perfect_brains Cocoa will fall soon. The current spike is unjustifiable for long term. Currently 1 ton cocoa cost more than 1 ton of copper. I think we can agree copper is more useful than chocolate.
@perfect_brains Shanghai Silver hit circuit breaker up. It is a physical silver market not a cash settled futures market.
