Is the US losing its shine in the world? The US Dollar appears to be losing its popularity as the world's reserve currency. Will the Chinese Yuan take over? What of the debt ceiling increase in the US being postponed? How about the decision concerning the US government shutdown being extended to a future date? All this does not bode well for the world's creditors of US debt, in particular China and Japan.
One hears of an empire coming to an end. One even hears of a currency collapse. US debt losing its credibility would increase interest rates on US Treasury obligations keeping them sufficiently attractive to be sold on the open market. High inflation would follow thereafter. An incomplete US Treasury bond sale would be highly embarrassing in light of the alleged full faith and credit of the United States of America.
In this type of scenario, playing with fire might seem almost an understatement. Gold appears to be migrating from the west to the east, with news that China is purchasing vast quantities of gold to hedge against any drop in value of its large US debt holdings, while India has engaged in brisk black market gold-trading activities to circumvent its high tax levy on imported gold in the face of the dwindling value of the rupee.
Playing with the endgame appears to be an appropriate way of describing the financial goings-on in the world today. Several countries have even ceased to conduct international trade using the US Dollar and instead entered into arrangements to trade in some of their respective currencies or even in gold, sometimes even flouting sanctions. Preparing for a US Dollar collapse and hyperinflation seems to be a good idea at this stage and ought to be put into motion.