Gold bug Peter Schiff's problem is that gold represented at best only about 18% of the value of total global international reserves, and that was yesterday before gold started this price plunge

"The dollar is going to collapse", he said.

"The dollar is going to be replaced by gold", he said.

Central banks "are getting rid of dollars", he said.

"They're getting rid of treasuries", he said.

None of that is true.

The nominal broad dollar index remains relatively strong. 

Even foreign official ownership of treasuries is up slightly year over year, shifting slightly from long dated securities to short, while total foreign ownership is up solidly. 

Meanwhile fiat currencies represented about 78% of the value of total global international reserves yesterday. The U.S. Dollar alone represented about 55% of the value, followed by the Euro close to 20%.

Gold is not going to replace the dollar.

But Peter will be happy to sell you some, especially today lol. 

 

The dollar is crashing is the stuff of hysteria

Chart showing US dollar crashing...

 

They do not remember 2008.

And they use an index, .dxy, which many now consider obsolete. 

The dollar is strong. 

 

 

Yet more gold and silver record highs this week in the strongest dollar environment in years: Gold to $4,887.82 per ​ounce on Wednesday, silver to $95.87 on Tuesday

 -- CNBC

But the media and the so-called experts prattle on about dollar weakness.

 

The dollar remained strong in Dec 2025 at the same time that the metals have been surging

 

Stories like this about China destroying the U.S. Dollar just make me want to howl

But hey, what do you expect from MarketWatch?

China quietly destroying the dollar...

... As more commodities get priced in yuan instead of dollars, demand for dollars softens. As central banks diversify into gold, they buy fewer Treasurys. As fewer foreigners buy U.S. debt, interest rates drift higher. As the dollar’s purchasing power erodes, everything you import costs more. ...

This, like most of the story, is a load of BS.

Global demand for U.S. debt is at an ALL TIME HIGH, a record $9.2 trillion in the last three months through October.

You'll know the yuan has replaced the dollar when the world buys Chinese sovereign debt instead of ours. And right now the world owns less than $300 billion of Chinese sovereign debt, billion with a B, not trillion with a T.

Nobody trusts China like they trust us. 

The writer, who owns gold and silver, wants you to dump long term bonds and buy short term bills and . . . gold and silver. Gee, what a coincidence. 

Meanwhile foreign governments continue to prefer long term U.S. Treasuries and own relatively few bills.

And the dollar is relatively strong, not weak as the writer says, in November 2025. 

click to enlarge

 

Year to date spot gold is up ~54%

By comparison, Total Stock Market Index VTSAX is up 14.83% ytd through yesterday.

Total Bond Market Index VBTLX is up 6.4%.

... The [gold] rally has been driven by a cocktail of factors, including . . . a weak dollar. ... -- CNBC 

Would these people know a weak dollar if they saw it?

Trying to explain gold like this is just silly.

The Nominal Broad U.S. Dollar Index is 120.51, down 7.4% from the January all time high of 130.21.

The all time low for this index was under Obama in July 2011, at 85.46.

You remember the summer of 2011, right? 

The dollar was at its weakest, America lost its AAA rating, and precisely net zero jobs were created that August, the first time since WWII.

We have a strong dollar today, not a weak one.

 

Oh yes, the poor, poor dollar, that old thing

Dollar heads for worst week since July; yen underpinned by BOJ

I keep hearing that gold is soaring because of continued dollar weakness lol

On the contrary, gold has risen despite continued dollar strength.

The enormous gains for gold in 2024 and 2025 are not explained by a round trip in the dollar index from 120 to 129 and back again. That's just a little side show in the bigger picture of dollar strength.

 

 

The dollar index has made steady progress out of the pit of despair at 85.46 in July 2011 under Barack Obama, the enemy of fossil fuels, to a place of relative strength today averaging above 120 in 2022 and 2023, 123 in 2024, and 125 in the first half of 2025.

Speaking of a weak dollar in this context is laughable.

Maybe the dollar is so strong again because the United States has become a net exporter of oil. The 1975 ban on oil exports was lifted in December 2015. Net imports of oil went negative for the first time since 1950 in 2020.

Gold is probably so strong in part because of increasing debt globally, which like rising prosperity helps drive demand for it as a hedge. Extreme poverty gripped half the world in 1950 but by 2020 it afflicts just 10%. Meanwhile gold production has nearly tripled over the period.

As a percentage of global GDP, global debt has gone from just above 100% of global GDP in 1980 to a whopping 235% of global GDP in 2024.

 

 

 

 

On lowering the Federal Funds Rate when the economy is just fine

John Tamny of Forbes spends four pages trying to convince us falling oil prices are always due to a rising dollar

Here, in Forbes:

"Falling crude prices ... were a function of a rising dollar that revealed itself in a major decline in the price of gold that is and was priced in dollars."

I don't know. Maybe he's trying to convince himself, not us. Reminds me of listening to a religious fanatic who can't stop talking. You know the kind. They usually get older and eventually think the better of it and move on. But not John Tamny.

The idea that a falling dollar produces higher oil prices is a nice theory occasionally supported by the data. The trouble is, there are too many examples of the correlation breaking down.

Crude oil prices from the mid-1980s to 2004 were remarkably range-bound between $12 and $35 a barrel despite the huge drop in the dollar from 1985 and its subsequent rise through the early 2000s. The dollar's rise in the late 1990s did nothing to change this. In fact, oil rose in tandem with the dollar then, as it did marginally after 1995 and as it did at the end of the late recession.

The sheer scale of the moves in oil prices is not commensurate with the relatively small moves in the dollar since 2005, nor is the relative tranquility of oil prices before that explained by the out-sized moves in the dollar.

The case is similar with gold, which at the current price of the dollar is still much, much higher than a dollar at this level in the past would indicate is called for. Gold was quiescent for 20 years and a lot lower than now all the while the dollar moved dramatically down and up again and down, off the 85 level. Contrary to Tamny, the recent decline in the price of gold has hardly been major, and hardly enough to convince that it is hewing to the performance of the dollar.

To illustrate how little gold has cared for the dollar's level, just look at how long it took for gold to peak after the 2008 all-time low in the dollar: over three years. And there is also that roughly 13 point rise in the dollar during the late recession when gold also began its long and biggest leg up.

That's not supposed to happen.

Sorry!

Dollar soars almost a percent to close at 91.15, highest close since December 2005

IEA revises down 2015 oil demand growth by 20%, a third of British oilers in big trouble, mostly smaller

Andrew Critchlow reported Dec. 12th here:

The International Energy Agency (IEA) said on Friday that world demand for oil will grow by 900,000 barrels per day (bpd) next year, a downward revision of 230,000 bpd from its previous estimate.

The Paris-based watchdog now expects world demand to reach 93.3m bpd in 2015. The agency said: "A strong dollar and the lifting of subsidies have so far limited supportive price effects on demand."

And here on the 29th:

A third of Britain’s listed oil and gas companies are in danger of running out of working capital and even going bankrupt amid a slump in the value of crude, according to new research.

Financial risk management group Company Watch believes that 70pc of the UK’s publicly listed oil exploration and production companies are now unprofitable, racking up significant losses in the region of £1.8bn.

The dollar is trading above 90 today

The dollar is trading above 90 today, for the first time since early 2006.

Told ya: Exports decline 1.5% in September, imports at record levels, signaling GDP of 3.5% will be revised lower

And to think just five days ago our masters of deception had no idea this was coming. As usual, this was unexpected.

Reported here:

The U.S. trade deficit unexpectedly widened in September as exports hit a five-month low, suggesting slowing global demand could undercut economic growth in the final three months of the year. ...

September's shortfall in the overall trade balance is bigger than the $38.1 billion deficit that the government had assumed in its advance gross domestic product (GDP) estimate for the third quarter published last week. This suggests the 3.5 percent annual growth pace it estimated will probably be trimmed when the government publishes its revisions later this month. Trade was reported to have contributed 1.32 percentage points to GDP growth. Exports in September fell 1.5 percent to $195.59 billion, the lowest since April, a sign that weakening demand in key markets such as China and the euro zone was starting to weigh. ...

Apart from slowing global demand, export growth is seen crimped by a strong dollar, which has so far this year strengthened by about 4 percent against the currencies of the country's main trading partners. ...

Consumer goods imports, however, were the highest on record, as were non-petroleum imports. Imports from China also hit an all-time high, leaving the politically sensitive trade gap at $35.6 billion, the highest on record. Imports from Canada were the highest since July 2008.

The dollar closed tonight at 85.19

The 52-week high was 86.746 on October 3. The 52-week low was 78.906 on May 8, just five months ago.

I don't find that big of a move in so short a space very encouraging yet. A stable price at a high level is better. Let's see what it can do.

Larry Kudlow's Kudlow Report On CNBC Ended Tonight

CNBC posted the farewells here on the day ending the television show's 5-year run, which wraps up 25 years with the network so far.

Kudlow remains affiliated with CNBC in a senior capacity and will appear daytimes on occasion instead of nightly at 7:00 PM.

Kudlow, 66 and an avid tennis player,  has had back problems requiring surgery in the last year, according to his own remarks on his 10:00 AM Saturday radio program on WABCradio.com, where you can download podcasts.

Ending his television program was reportedly his own choice and was made in the interest of slowing down.

Others have pointed to the show's very poor ratings as the reason for ending it, but the show has an enthusiastic and devoted, if not large, following.

The Reaganite supply-sider is known for his belief in free market capitalism as the best path to prosperity, as well as for strong dollar policy, growth oriented economic policies and a militarily strong America which welcomes and befriends others wishing to be free.

Kudlow credits his conversion to Roman Catholicism with helping him overcome a drug and alcohol addiction.

Since 1967 The US Dollar Currency Index Average Is 97.76, But 120 Remains The Gold Standard Benchmark

The US Dollar Currency Index benchmark is really 120 since that is the level which prevailed before the closing of the gold window in 1971, after which the index declined to average 97.76 to date.

Bloomberg's Wrong. Gold Is Actually Fairly Priced Today By 1980 Standards.

Bloomberg says gold is worth half what it was in 1980, here:

After taking inflation into account, gold is worth almost half of what it was in 1980. It reached a then-record $850 that year after U.S. political and financial turmoil in the late 1970s caused a surge in consumer prices. The metal is valued at $464 in 1980 dollars, according to a calculator on the website of the Fed Bank of Minneapolis.

---------------------------------------

Assuming that's true (which it isn't because $850 was a bubble price), theoretically gold has another 45% up to go from today's $1,311 before reaching parity with the 1980 record value of $850. As it happens, that level would be $1,900 an ounce, which we already reached in September 2011.

Since the 1980 high was clearly a bubble price, we may infer that we've already repeated that bubble high in inflation-adjusted terms.

The question is, what's the fair price. The average price in 1980 was about $613, but the low was about  $482. That low today adjusted for inflation is something between $1,140 and $1,340.

Today's last spot price is $1,322.

I'd say gold is about where it should be today, adjusted for inflation relative to 1980.

But 1980 was the blowoff top of a horribly inflationary decade, and gold prices would subsequently sink farther to $300 an ounce. In a fiat currency system dedicated to a strong dollar policy, that's about as low as it gets in the late 20th century floating currency regime. So $300 an ounce in 1985 gets you to only $640 an ounce in 2012 adjusted for inflation, meaning gold needs to fall about 50% from where it is today, if . . . IF! we go back to a strong dollar policy.

Don't hold your breath. They don't believe in it.

Home Prices Still Too High: Nationally 24% Pay More Than Half Their Income On Housing

Case Shiller Home Price Index @multpl.com

Joel Kotkin reflects on the still expensive housing market here:

Ownership levels continue to drop, most notably for minorities, particularly African Americans. Last year, according to the Harvard study, the number of renters in the U.S. rose by a million, accompanied by a net loss of 161,000 homeowners.

This is bad news not only for middle-income Americans but even more so for the poor and renters. The number of renters now paying upward of 50% of their income for housing has risen by 2.5 million since the recession and 6.7 million over the decade. Roughly one in four renters, notes Harvard, are now in this perilous situation. The number of poor renters is growing, but the supply of new affordable housing has dropped over the past year. ...

According to the Center for Housing Policy and National Housing Conference, 39% of working households in the Los Angeles metropolitan area spend more than half their income on housing, 35% in the San Francisco metro area and 31% in the New York area. All of these figures are much higher than the national rate of 24%, which itself is far from tolerable.

-------------------------------------------------

Kotkin nowhere mentions that currently expensive housing is explicit Federal Reserve policy. ZIRP and QE are specifically designed to reduce long term interest rates to make home mortgages affordable. Instead those policies have re-inflated housing prices to their historical highs before the bubble and reversed the downward trajectory of price resetting those prices were on.

In June 2013 dollars, the Case Shiller Home Price Index reached its low point after the bubble at 126.30 for the quarter ended March 31, 2012. That level hadn't been seen since June 1998. But from the long term perspective prices should have reset to 120 on the index or lower as they have in the past. This expectation holds even more considering the excesses of the bubble which needed to be wiped out, but haven't been.

The Fed has done nothing but interfere with the free market in housing, creating the bubble in the first place and preventing its deflation now. To fix the problem, the Fed needs at a minimum to focus solely on price stability by maintaining a strong dollar. Markets will take care of themselves after that.

The US Dollar Has A Long Way To Go, But The Trend Has Been Up

The US dollar is up for a number of reasons: 

permanency in the tax code effective January 1, 2013;

elevated spending by the federal government arrested, due to PARTISAN gridlock (hurrah!);

and increased US DOMESTIC oil production from technology advances, despite the most anti-oil president ever to sit in the Oval.

Just think where we would be if we actually had a pro-US president.

Well, for one thing, we'd be WORKING, most likely.