Brace for impact, literally.
China is about to list local-currency crude futures in Shanghai on March 26. This goes back to 1993, when China started to contemplate how to take away the U.S.’s monopoly of the WTI and Brent oil contracts.
The ramifications are just enormous, if foreigners adopt this. The USD is already 71% of the world’s fiat currency units, with 50% of them circling between foreign entities, which need them to settle, among other transactions, oil contracts.
Now, they won’t need as many Dollars on their reserves as they did before. Remember this: China is the largest consumer of oil out there. Inflation could rage within the U.S., if USD’s flood the banking system.
What I love to see is that the energy majors have used the slump in oil prices the last few years to become leaner and more efficient.
What this means is significant, and it trickles into every layer of the commodities sector.
Mining companies, especially for gold, silver, copper, and the energy-intensive metals require unbelievable quantities of oil – it’s their largest expense.
The fact that oil companies can make money at $60 oil means that the miners will not face major increases to their expenses in the coming years, while the underlying spot price for gold and silver, for instance, have been on the rise.
Finally, after several years of nothing but enormous frustrations, miners can develop economical projects and attract the right type of shareholder base.
Combine this with the fact that the USD simply looks horrible from the technical perspective and you’ve got a recipe for a boom cycle, but not quite yet.
What we must see is inflation becoming a major issue before commodities really turn into the GO-TO sector for hedging and diversification reasons.
In the next 1-4 years, Portfolio Wealth Global expects the Dollar to fall sharply against gold and various leading currencies.We also see the USD losing ground to a number of the better-scaled cryptocurrencies.
In fact, when it comes to cryptocurrencies, 2018 will pave the way for their dominance. All the crap that is currently being put on the sector will be dealt with, and the fact that this industry is so decentralized will prove too difficult for governments to contain.
It’s not about shutting it down at this point – it’s all about trying to cope with how revolutionary it is compared with what we’ve seen thus far, when it comes to money and assets.
All other assets can be seized, stolen, foreclosed upon, or worse. With cryptocurrencies, you own your own money, and no one, if you properly secure it, can ever take it away from you.
That aspect has tremendous value.
Think of how annoyed and disgusted we all are with the fact that our governments, along with our central banks and commercial banks, decide how much currency units will be circulating in the economy.
It’s a full-blown scam, put into law. We need to get rid of it; the world is moving towards decentralized systems, where people actually have possession of their assets on the blockchain, instead of a corrupt government-based database, which we all know they toy with all the time.
We’re living through a genuine revolution, especially now with gold ownership on the blockchain as well.
The possibilities are absolutely fascinating for many of our industries – in the U.S., tens of thousands of people die every year from mistakes committed by nurses, who administer the wrong medicine.