I am a newbie here, especially concerning precious metals. I strongly feel the new natural gas pipeline deal that Russia and China made will be a catalyst for other countries to avoid using US dollars. Won't this be a great boon for precious metal prices? In my opinion, silver and gold should be starting to make a big move up but they have not so far. This has me confused and perhaps I have this concept of the petrodollar all wrong? I appreciate any informative comments.
It is happening but still at a very early stage. Kind of like a snowball just starting to roll down and gain momentum. The 40 billion gas deal between Russia/China is fairly small in the context of how massive the overall petrodollar trade is. But like that snowball becoming a huge object with high momentum over time as it gets closer to the bottom of the hill, I think the same will happen with the BRIC countries devising more and more ways to subvert the petrodollar. This will be long term bullish on gold.
See the latest post by P. Radomski titled: “Gold & Silver Trading Alert: Turnaround”
Unlike most other online editorialists in the PM sector, he appears to not be trying to pull people into PMs. Rather he is watching performance and underlying factors.
The list of those calling themselves “bulls” for the PM sector is very long. It seems that you have been pulled into their line of propaganda that mostly leads investors to get in too early. What we should want is for all investors to come on board just after a recognizable bottom takes place. That is the point where the possible destruction of central banks will take place and humankind will again experience prosperity, but of course not without central governments doing everything within their power to prevent it.
Too often the tired argument that fiat money is about to plunge to zero creates disappointment when it becomes obvious it is not happening, or not within a suggested time-frame. Yes. Fiat money will eventually have zero value. Being wrong about when that happens, on an individual basis, can be disastrous economically.
Trying to make a linkage between petroleum resource development, currencies and PM prices is tenuous to nearly non-existent in the short term. LEAD TIME is the main factor. At this point actual turn-key of the projects you’ve mentioned is far into the future. This is true of all resource related projects, including gold/silver mining, which require massive amounts of investment and related development over a number of years.