Central Banks lead a shift away from the dollar

But with each small shift that 2/3 number shrinks -- that's why it's being done incrementally, so as not to take the hit all at once.

The central banks know better than any of us just how close to disaster they are (or are not); if system failure is inevitable, the game then becomes who gets ruined less than the rest when the rubber meets the road. Everyone will continue to tippy-toe towards abandonment of the dollar (hoping not to scare anyone else into a precipitate panic) with the long-range goal of making the transition as painlessly as possible.

Like war, monetary transition is a calculus, not a sum; if anybody is thinking at all (instead of just reacting) they are trying to think in 4D: Present, short-term future, long-term future, and financial health relative to their traditional economic and political rivals at each of those three stages. If China (just one example) figures she's gonna take a nuclear hit in the transition, she might also consider it worth her while to cripple the US into a hole deeper than that she herself will be occupying.

That is why gold is being acquired, stockpiled, and hoarded; if the world-wide system tanks, the leadership post-restart will go by default to he holding the greatest amount of this tangible, default measure of wealth, and the rest of the pecking order at the outset will be determined like-wise.

In all four dimensions, US health is questionable at best, as is that of the West in general: The emerging world (led by the Chinese) is less than enamored with what they term the Western "flat earth" vision of the future, in which national distinctions are blurred or eliminated to some sort of Central Authority -- China wishes to remain China, not a branch of The United Federation. She has, of course, like India and others, taken and will continue to take advantage of such features of the current "global" economy as long as it suits their purposes (the outsourcing craze, etc.) and stiff it at the earliest possible opportunity.

Complex, no? That's what riding any tiger is, and the present international situation is nothin' but a big, mean ol' tiger.

That's it for yours truly for a spell -- see y'all after the New Year ...

The dollar will fail, but the wealthiest nation will not be determined by who has the most gold.......It will be based on who can produce the most food. Historically, when the money failed in the land of Egypt and in the land of Canaan, all the Egyptians came to Joseph and said, "Give us bread, for why should we die in your presence? For the money has failed."

This is why we are giving away gold for something far more precious.....

Kenny --

Good point. He who starts out with the most gold may have to trade it for food. The US at present, however, is itself poised on the brink of an agricultural nightmare; Big Agri-Business is horribly abusing "the breadbasket of the world" -- production of real food-stuffs has been marginalized in favor of serving the American junk diet.

Now if we have the will to take farmland away from CitiBank, etc. and return it to family production, perhaps we will come out on top. (Good luck wid dat.) But if China, Japan, and the Saudis can buy the US, as they have been doing, it will be they who actually control the wealth that food undoubtedly represents in a hungry world, even if it is grown here.

Pharaoh's wealth was not dependent on the money that had failed -- dude was fat with gold -- and he could afford to give the people the good grain Joseph had wisely put aside; who can afford to feed today's world on that basis? We are looking at a situation where we are not putting sufficient good grain aside and are simultaneously hemorrhaging that which has traditionally been considered Real Wealth.

Thanks, though, for bringing to the fore a crucial part of the whole dynamic of any post-crash world.

India's recent purchase of gold is the epitome of buying at the highest possible price. Does anyone seriously think gold will maintain a price over $1000 per ounce as the economy of the world recovers?

No one has said "What IF?", instead they keep saying "When". What if the USA economy NEVER recovers? The normal reaction to that proposition is "it alwats recovers". Yet times have changed, conditions have changed and it is no longer the 1920's or 1930's but the 21st Century now that we live within. In yesteryear the USA was a "productive industrial nation". Today we are a nation of Consumers. Consumers who borrow money to consume. It is entirely imposible for more than 50% of our population today to live within their means, because they simply do not have enough income to live. So in order to live they borrow more and more and more. Just as our Fedral Government who cannot live within their means have done since 1970. There will be NO RECOVERY. Not now, not next year and not ever, unless we once again relearn how to become a productive industrial nation that produces more than we consume.