Interim Market update Jun 21, 2022

[SOL]

The video game arcade token analogy-Brilliant!

Thanks. The true strength (or lack thereof) of the ruble will be revealed when it trades openly, and somewhat more freely, on the open markets.

Also, it seems that besides selling lots of oil-gas to China and India, the Angry Bear is starting to sell some of its gold reserves to the former as well - at a significant discount.

This could be construed as a sign of weakness.

If you look at it from a multi-angle perspective, there are no free markets because the US can create as much money as it wants. It can attack any currency via the currency markets which is what it does when a currency is allowed to float. The concept of free markets is an extremely flawed concept.

What the New BRICS can and will do is create a secondary alliance using their currencies to settle transactions. Hence the concept of selling at discount will stop applying. When one takes about selling at a discount, one usually refers to the USD, there is no standard valuing system for any currency so the whole concept is nonsense.

In a way, Russia is wise, until they have come up with a proper mechanism to settle payment letting their currency float is asking for a repeat of Turkey and Venezuela. Once those mechanisms are in place then they can ease controls for the dollar won't matter as much to this block as they won't be settling with dollars. Granted this will take time but I have noticed all the trends are speeding up by a factor of 2 and in some cases 3.

The biggest problem with any discussion involving currencies is the flawed concept that the USD is good as Gold when its not.

[harryg]

Currencies are normally valued against each other, this tends to hide to some extent how cr*p they are. If the GBP is EUR 1.15 today and 5 years ago it was EUR 1.15, you could be forgiven for thinking that the GBP has not changed in purchasing power.

The "correct" way to value a currency would be against a basket of "real stuff" in the country of the currency.

For example, in 1970 a loaf of bread cost 10p, now it costs £1.18. So you could say (and I would) that the pound has declined from 10 loaves of bread to 0.85 of a loaf of bread.

In general terms, currencies are all devaluing over time, just at different rates. It can be seen as a kind of race to the bottom where you want to be on the slowest horse.

[harryg]

Interesting price action so far today (major US Indices) to 1pm