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Aug. 8, 2023 - Epoch Times
32:18
While Pushing ‘Centralized Digital Currency’ Here’s What Global Elites Are Really Doing
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Right now, in terms of the future of money, and in terms of the future for the world economic system, it seems like the messaging and in terms of the future for the world economic system, it seems like the messaging that's coming from the mainstream media, the elites who gather at the World Economic Forum, central banks around the world, and so on, it seems to be that digital currencies will eventually
And of course, despite this being painted as a great convenience to the average person, Well, in reality, having everyone on a central bank digital currency would allow the federal government to control our lives like never before.
In theory, governments can make the money that they give to us expire so that we have to use it before a certain date.
They can make the money unusable in certain industries.
So, for instance, you would not be able to buy a gun.
And also, if the technology develops further, they would be able to tie the digital money in your quote-unquote pocket to some other type of profile that you have in their system, sort of like what China does with their social credit score.
However, as great as all that sounds, the truth is that despite the fact that digital currencies are being discussed and touted on the front end as the future of money, behind the scenes, on the back end, central banks around the world are buying up physical gold, physical gold and bullion at record rates like never before.
According to the most recent data, which just for your reference always lags behind by a few months, well, central banks were once again net buyers of gold in the month of May.
For instance, Poland and China each bought up 16 tons of gold.
Singapore bought up 4 tons.
Russia, 3 tons.
India, the Czech Republic, Iraq, and Kyrgyzstan, 2 tons each.
And just as a fun aside, ever since they restarted releasing their reports of their gold purchases, which happened about 8 months ago, the Central Bank of China has added at least 144 tons to their official gold holdings, which now sit at approximately 2,000 tons.
Although like with anything else, Chinese official numbers are always unreliable, but that's at least what they officially are.
Regardless, as the U.S. dollar's place in the global economy gets weaker and weaker, and as more countries are ditching the U.S. dollar for other methods of payment, there are some countries which are actually working to create a new world currency that's backed by gold.
In fact, the BRICS nations will be having a meeting next month in August, down in South Africa, where they will be discussing exactly that.
Now, of course, whether that will wind up happening and coming to fruition is still up in the air.
It's not exactly clear.
But the reality is that behind the scenes, regardless of what they say, major players are accumulating gold for whatever they believe will come in the near future.
And so, along that line, I took the opportunity to speak with Mr.
Max Baker, who is the president of American Heart for Gold, who is, for one, one of America's largest gold bullion dealers by volume.
They're my personal gold dealer.
And also, for full transparency, they've been a sponsor of this program for a while now.
And we appreciate them for that.
And I spoke with Max about what the gold market looks like right now, what effect these giant players like these central banks are having on the price of gold, as well as what, at least in his opinion, the near-term future for the market might look like.
And so consider smashing those like and subscribe buttons and take a listen.
So a lot of central banks are once again stockpiling gold.
The recent numbers came out showing that central banks across the world in Europe, Asia, Africa, Oceania, they're all stockpiling gold.
Why do you think that is?
You know, central banks buy gold for the same reason the average retail investor buys gold.
They're buying it as a hedge against fiat currency.
You know, we're devaluing currency left and right by printing a ton of it.
So, central banks are following suit with retail investors.
Retail investors are following suit with central banks.
Follow what central banks are doing.
They're the first to know.
And central banks see all the money we've printed over the past three, four years.
We've printed a ton of money.
They're seeing that.
They're seeing that we're heading towards a recession because banks aren't lending.
Credit conditions are tightening rapidly.
And because of that, they're stockpiling gold because they know it's coming.
So when that happens, when you have big players like central bankers, Buying up gold by the ton.
What does that do to the price of gold?
Does that increase pressure for it to come up?
What it does is it helps gold maintain its price, basically a support level.
You won't really see gold move up $50, $100 to $300 at a time until the dollar pulls back.
We saw that in 2008 when the dollar fell to $70 on the index there, fell from $90 down to $70.
We head into another recession this fall, this winter.
You'll see that again.
You'll see the dollar fall and that's when you'll see gold really rise.
When central banks buy, it offers tremendous support.
You know, one thing I've always wondered is when you have central banks, like, for instance, the Central Bank of China recently put out their numbers, and all central banks are like that, where they purchase tons of gold, right?
The unit of measure they use is tons.
When that happens, are they buying from the miners directly and then sending it to their local mints that then mint it into bars to be put aside in their version of the Fort Knox?
They're buying it from their trusted refiners, from trusted accredited refineries.
And then those are being sent off to wherever they want to store it.
And then some governments, like the U.S. government, will send some of it to New York, to a COMEX vault.
They'll send it to the U.S. Mint to Mint Silver Eagles.
So they're buying from accredited refiners.
I see.
Okay.
While we're on the topic of central banks, this isn't exactly a central bank question, but you know the BRICS nations, Brazil, Russia, India, China, and South America, with a few other countries trying to join that union, they put out a statement recently saying that they are working on a gold-backed global currency to kind of compete with the U.S. dollar.
So on August 26th is when they're going to be having their meeting in, I believe it's Cape Town, South Africa, And that's when they're due to announce this new currency that's supposedly going to be backed by gold.
Do you have any thoughts or opinions on that?
What do you think that's about and what do you think that'll do to the price?
You know, it's certainly going to be a bit of a blow to the dollar.
You know, if you can transact in a currency that's backed by gold, that's a strong currency.
So that's a blow to the dollar first and foremost.
And when you see that dollar pull back, whether it's because of a recession, money printing, because of use of another currency, it's very bullish for the price of gold.
Not to mention if they're having to buy up gold to back this currency, if it becomes wildly popular, you can imagine that, you know, demand for gold is up, dollar is down.
So you have two factors there, resulting in a very, very bullish, bullish sign for gold.
Yeah.
If, let's say, that currency they're going to build, I mean, we have to, of course, we don't know the details of it, but let's just assume it's actually going to be backed by currency, whether it's a ratio of 1 to 1 or 5 to 1, whatever the ratio is.
If they want to expand it, they can't just do the same thing that the Fed does.
They would have to actually buy up gold in order to issue more notes, right?
Yeah.
That's right.
That's right.
Interesting.
I didn't think of that.
So actually, in that case, that would naturally drive the price up and it would create a floor at the same time.
And the floor would, I would imagine, just continue rising because of that currency.
That would be an interesting experiment.
Yeah, yeah.
Here's another question.
This one actually came up quite often in regards, well, when I asked our viewers and they wrote it back.
This is the question.
Well, this is the representative.
Also, is the price of gold and silver being artificially kept low due to the amount of paper metal versus the actual metal?
And another question, are gold prices or futures being manipulated to keep gold at a certain price?
Okay, so I guess that's sort of the same question.
Yeah, no, that's a great question.
And absolutely.
Look, there's many different ways that you can trade gold right now that don't involve physical gold whatsoever.
And because of that, you can create more gold than actually exists, right?
You can create contracts depending on what kind of funds you're in, what kind of ETFs you're in.
A lot of those ETFs and funds don't actually own the physical gold.
So they're trading gold, paper gold, back and forth with a certain price, a fixed price, but there's no actual physical gold being transacted or moved from place to place.
So if you were to force their hand and say, hey, you're not able to trade gold until you're actually moving gold one to one, You can imagine the price of gold is going to skyrocket because there's going to be that much more demand from these funds and from these ETFs that actually have to then back whatever they're trading with a physical ounce of gold.
So it is certainly being suppressed.
You see news stories every couple months about banks being penalized for spoofing, for suppressing the price of gold.
Probably the largest one in recent history was the JP Morgan Spoofing that was being done, they were fined $920 million for that.
But you see those stories all the time.
It's certainly being suppressed.
It's certainly being held back.
And again, I think if you're trading in gold, it should be backed by something, not just paper contracts.
And if we were ever to see that, I can't even speculate on what the price of gold would shoot to, but it would be...
To the upside times 5, 10x at least.
So you think it's being suppressed that much, like basically 500% suppression?
Absolutely.
Absolutely.
So this is another question that was raised.
What is the best way to buy gold if you think you might need to use it as everyday currency someday in the near future?
If we're ever in that type of situation, you know, typically we have investors buying gold as an insurance policy as a hedge against the dollar, a hedge against whatever they have in the banks, a hedge against the stock market recession, all that.
If we're ever into a scenario where we're actually having to pay for things in gold, That's a bad, bad scenario.
And in that scenario, something has happened to the dollar.
Gold is north of 10,000.
The financial system globally is completely wiped out.
And with that, you're not going to want a kilo bar of gold.
You're not going to want 32 ounces of gold.
You're not going to want a 10 ounce bar or even a one ounce coin or bar.
You're going to want fractional gold.
That's going to be the easiest way to transact.
So in that, look for the smallest denomination gold you can get your hands on.
Because again, you can imagine trying to take a $10,000 gold coin to someone and say, hey, I need goods and services.
That's tough.
So, you know, it's funny.
You mentioned smaller denominations, and I read this article just earlier in the week about this pop-up concept in South Korea where people can just go there.
It's like a little kiosk.
It's like a vending machine in a mall.
You saw that?
I've seen it, yeah.
You can use your credit card or cash.
You put it in.
You choose which small denomination of gold you want.
You hit the button, and it just comes out.
So that was in South Korea.
But then that reminded me of other stories I'm reading about India, how the demand for gold and silver jewelry is going up, how in China the demand for gold and silver bullion is going up.
People are using that for savings.
And I'm wondering whether there's a...
And also, when you look at the central banks who are buying up gold the most, they're in Asia, it appears.
That's what's happening.
The Asian central banks are buying up gold the most.
Whereas some other banks, like even the U.S., they have a huge stockpile, but they're actually selling off their gold.
So it seems like there might be sort of a shift from west to the east, just like how we saw after the World Wars.
There was a shift from Europe to America, all the gold going here to pay for the services we're providing.
There might be a shift going from the west to the east.
How can the average invest, if that's the case, and I'd love to know your thoughts if that's the case.
So that's question one.
And if that's the case, how can the average investor here in America sort of use that to their advantage?
Yeah, you know, past 10, 20 years, the East has been a big consumer of physical gold.
You mentioned India, China.
They understand the value of gold, that it has no counterparty risk.
They see the levels of debt that have been created over the past decade.
These massive debt bubbles and people are trying to get their hands on something tangible that, again, is no one's IOU, no counterparty risk to it at all.
So I wouldn't say that it's moving from west to east.
I would think that it's more being consumed just about everywhere.
I think America is waking up to that fact and we're seeing consumption of gold really pick up here.
Our business is up 400% over the past couple of years.
People are really starting to pay attention to the fact that, hey, I need a little bit of insurance on my money.
So globally speaking, people are waking up to that fact that they feel a little bit more comfortable having gold as a part of their investment portfolio, or they feel more comfortable having a little bit of gold as opposed to having all that in their savings account making no interest.
Where do you see gold's place with the rise of government-backed central bank digital currencies?
Whether we like them or not, they're being developed right now.
As a citizen, I don't like a digital dollar.
I lose control of my money.
I lose privacy.
I lose a lot of things with that because it means demand for gold is going to pick up enormously over the next couple of years as this starts to become a reality.
And the reason being, people are going to still want something that will give them a store of value, a store of wealth, and something that they can hold that's private.
And at that point, it may be the only thing left that is truly a private store of wealth, truly something that you can transact with privately.
And so I expect demand to pick up significantly as a digital dollar becomes closer and closer to adoption.
And you know, when you mentioned that, it reminded me that there was actually some momentum in the direction of creating state-backed gold currencies.
Texas recently passed a bill saying that they will be establishing a gold-backed currency.
So it seems like as the rise of CBDCs is happening, you also do have a kind of a Opposite effect where people as individuals, but also even states that are not down with the program, they're moving back towards more gold.
Because like you said, it has all those great functions.
Like you don't trust the government, you should buy gold.
You don't want to have your life be transparent to some bureaucrat, you should move towards gold.
It has all those functions, right?
So here's one thing I wanted to mention.
This is fake money being printed into oblivion by those geniuses over in Washington, D.C. And so before they completely obliterate your life savings, what I recommend you do is to convert that fake money into real money, which is physical gold and silver.
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And now let's head on back to the studio.
Recently, I watched this documentary about Arnold Schwarzenegger.
It was on Netflix, a good documentary.
And in his story, he said that when he moved from Austria to the U.S. in 1968, before he moved, he saved up $27,000.
So in Austria, he saved up $27,000 and he moved to the U.S. and that was 1968.
And in that article I was reading, where I mentioned this figure, it said that So, okay, 1968, $27,000.
And then it said in 2023, that's equivalent to, do you know the number?
No, I don't, but it's got to be at like 5X? Yeah, 7X. So I had to double check it because I couldn't believe it.
So 1968, he saved up $27,000.
In today's money, that's $236,000.
And I read that and I'm like, that's in one man's not even whole lifetime.
He was already 20 by that point.
So that's in just the last, what, 50 years.
It's a 773% inflation rate.
And so I went back and I crunched the numbers.
So I was thinking, so if in 1968 I had $27,000, how would I preserve my purchasing power?
Because if I just put it in a stock under my bed, in 50 years I'm going to have $27,000, which you can't buy a house, whereas before I could literally buy a nice, decent house.
So if you bought gold coins in 1968, you would be able to purchase...
620 ounces of gold with that $27,000.
And in today's money, that will be worth $1.2 million.
So that's a 4,600% increase.
And then I looked up the Dow Jones and S&P 500 and it's significantly more than that.
The Dow Jones would only give you a 3000% increase and the S&P 500 will give you a 4100% increase.
So gold beat out the Dow Jones and the S&P 500.
So basically if Arnold had bought gold at that time...
He would be way ahead of inflation, significantly.
You know, it's funny you say that.
I have some friends that are on the equity side of things, and occasionally they'll throw a jab and say, oh, you know, you're a doom and gloomer.
You know, you're just rooting for bad things to happen.
I say, absolutely not.
I believe in insurance.
And actually, gold has outperformed the S&P more than 2 to 1 since the year 2000.
So, you know, it is important to look at that, look at history.
Gold has performed extremely well.
Look at different time periods.
This isn't always true, but from the year 2000, it's outperformed S&P 2 to 1.
Dollar has lost half of its purchasing power since the year 2000.
Dollar has lost 17% of its purchasing power since the year 2020.
So gold has gone north.
The dollar has gone south.
So you're absolutely right.
You know, the Arnold Schwarzenegger take on things.
Anytime you look in history, gold performs.
It does its job as insurance.
And certainly in Arnold's case, it would have made him a tremendous amount of money had he put that into gold.
So one thing I was thinking when I was reading this, so the price of gold in 1968 was $43 per ounce on average.
And of course it fluctuated in that year, but let's say $43 per ounce.
And this year it's, let's say, just under $2,000.
Let's just say that.
And so, but...
Over the last two years, during the years of the pandemic, the Federal Reserve printed 80% of all U.S. dollars that are in existence.
They created 80% of the M1 money supply in the last two years that has ever come into existence.
And so...
Here's my question to you.
I, in my head, have this scenario where just like the price of Bitcoin went from like $100 and then a year later was $20,000, $30,000, $40,000 for one Bitcoin.
In my head, I have this scenario because of these facts, because of the way that gold outperforms inflation, and that inflation was at kind of a normal inflationary period, whereas now in the last two years, I think?
No, I look at the money supply and I see that as well.
And it hasn't really hit the price of gold just yet.
We need the dollar to pull back significantly in a recession scenario, a financial crisis scenario.
So if you see the dollar react the way that it did in 2008 through 2011 and pull back dramatically, that's when you're going to see the big spike in gold.
That's when you'll see the, you know, I won't make any calls, but the dollar falls like it did in 08 through 11.
You're going to see $3,000, $4,000, $5,000 gold.
And so right now, the dollar is maintaining its strength a bit.
It's being traded with, and we haven't felt really that big financial crisis, that big.
Obviously, we had the bank crisis, which is still ongoing.
That's going to continue into the fall as Jerome Powell continues to raise interest rates and all these bad real estate loans come due, the commercial real estate loans come due.
But we haven't had that big financial crisis yet or that big recession yet for that dollar to pull back and gold to really accelerate forward.
But it's coming.
In terms of the gold mining side, a lot of people are kind of interested in what's going on there.
Are you seeing any trends on the mining side that you think can be a predictor of where the price of gold is going to be in the future or the near future?
Yeah, we are.
You know, peak gold mining has already been reached.
And right now it's getting harder and harder to find the gold, find the stores of gold in the crust of the earth.
It's getting harder and harder to extract that from the earth.
And there's been several experts, several studies done that said, you know, we'll be out of gold by 2050.
At that point, it'll be unsustainable to mine gold.
Unsustainable meaning that it'll be too expensive.
The gold you're getting out of the ground, you can't justify the amount of money.
That's right.
It's going to take too many resources to find that gold, too many resources to extract that gold from the earth.
And at that point, it's basically a net loss.
Wow.
So basically, according to that study, by 2050, The amount of gold that's above ground will sort of be capped, right?
And then I guess it'll be diminished because, you know, people lose their jewelry and that piece of gold isn't coming back, right?
So that's interesting.
Sure.
Yeah, yeah.
And then obviously demand from the central banks, demand from retail investors, from investors.
Certainly it's getting harder and harder for these miners to pull it up from the ground, and that'll only result in a positive Yeah, you know, I've heard several figures over the years.
Right now, at about $1,100 is where it becomes unsustainable.
That type of figure is interesting to me because I remember when the pandemic kicked off and the price of silver just collapsed to something like $11.
I remember I read an article saying that basically it costs the silver miners something exactly like $12.
If the price of silver goes below $12, they're going to stop mining because it's no longer profitable.
So when it went down to $11, I'm like...
This is obviously the place to buy, and of course it's shot up since then, right?
That's right.
Yeah, you've doubled up since then.
What I'm always thinking about in terms of silver, because I have a decent position in silver, and I think about the fact that it's mined, but unlike gold, a lot of silver is actually used and not retrieved.
So whether it's computer parts or different industrial products, Yeah, they use that and they use palladium in those as well, I believe.
Yeah, I remember palladium also went through the roof at some point.
But I know EVs specifically use a solid amount of silver and that's going to be hard to retrieve.
So silver is like this unique metal where it has a really strong industrial use.
So the stuff coming out of the ground isn't necessarily what's available in the market in, let's say, 20 years because it's going to be used up and then discarded.
Yeah, that's right.
That's right.
Yeah.
So you think, based on just the EV kind of forced demand by the government that, you know, California, Europe, Canada, they're sort of New York, they're mandating that a certain percentage of vehicles are going to have to be electric by 2030 or 2035, that that will invariably cause the price of silver to go up because...
There'll be more silver maybe coming out of the ground to meet the demand, but it'll be going into the hands of the manufacturers who might actually stockpile it, right?
They might sign more and more futures contracts and they might bid the price up.
So in your opinion, is silver a good bet right now as compared to gold because of that trend?
I like silver.
It is a little more volatile than gold.
You know, you can wake up one morning and it's down 3% and it's like, oh my gosh, it's down.
But it also moves very, very quickly to the upside.
If you can stomach it, silver will get you the better return, in my opinion.
And that's...
It's just so affordable right now.
The demand is just heating up for it on the physical side with investors.
As you said, EVs are about to take off.
There's mandates coming into place where we're going to be producing more and more EVs.
And with that, it's not as though silver were going to be mining any more of it.
It's the same as gold mining.
Silver mining is becoming harder and harder, more and more expensive.
And with that, we've hit peak silver on the mining side of things.
So you have these mining companies spending millions and millions and billions of dollars to find new areas to mine, and they're coming up empty.
So it's getting harder to find the silver, harder to mine the silver, and now you're getting all this increased demand on the EV side of things.
As well as the investor side of things, because we're printing money like crazy.
And obviously silver reacts well when the dollar pulls back, when we print money, when we head into recession.
So you're getting both those vehicles pushing silver up.
So I think silver is a great play right now.
Yeah, I remember when I was in high school, silver was $5 an ounce.
And back then, I didn't know any better.
I would have jumped in head first.
But that's sort of what I also think about this moment now.
You know, sometimes I'm watching the price and I'm like, well, it's like $23.
Should I buy?
Then it goes up to like $25.
I'm like, well, should I wait until it goes down to like $22?
But then I kind of remind myself, I'm like, well, let me just dollar cost average in, right?
Sure.
Looking back, if I was still in high school, it didn't matter whether I bought a 490 or 610, right?
Because it doesn't matter.
It's still the range that's significantly lower than what it is now.
This one also came up a few times.
So if, let's say, somebody gets gold into their IRA account, is that paper gold or is it stored somewhere?
How does that exactly work?
If someone were to put a portion of their IRA into physical gold, they're actually buying the physical gold and silver that they own.
It is then being sent from our vault to one of six vaults of their choosing.
Typically, our clients like to put it at the vault closest to them, closest to their front door, but it's shipped from our vault to the vault of their choosing.
It's in their personal locker, their private locker.
And so, yeah, it's very much physical.
And from there, if they want to take distributions of that physical gold, they can actually pull gold out of their IRA and have it shipped to their front door.
So I guess my last question is that it seems like no matter what happens in the short term, There are so many systemic problems with the economy.
We've mentioned some of them, the banking sector, the markets in general, the ballooning national debt.
We didn't even get into this, but the commercial real estate disaster that's looming on the horizon with, I forgot the exact numbers, but something like Maybe over 30% of commercial real estate in large cities not being utilized right now.
So basically something eventually has to break.
Do you have any final words on how to use gold as a hedge against the uncertainties of the current situation and the only certainty being that the dollar will definitely lose its value even more so over time.
That's just the way the system is designed.
The only other certainty is that something will eventually break.
Again, there's just so much debt, so much money created.
With rising interest rates, that's why we're starting to see things break, like SVB, like First Republic.
You mentioned the real estate loans.
Yeah, there's something like $2 trillion of commercial real estate loans that need to be refinanced here in the near future.
These were loans that were done at 2%, 3%, 4%.
Now they have to get done at, you know, refinanced at 7%, 8%.
And you're going to have huge losses in some of these regional banks.
But aside from that, credit conditions have tightened so much.
And for an economy to expand, you need banks to lend.
You need them to lend.
You need them to hand out money.
You need businesses to take those loans and grow.
And right now, we're at a place where banks are not lending at all.
You can have perfect credit.
It doesn't matter.
You're going to pay a crazy interest rate to take out a loan right now, even with perfect credit.
Banks are not lending at all.
And so you will feel that recession coming here in the fall, winter, and then on into next year.
And when that happens, that's when you're going to start to see things break and fail.
And again, you buy gold for what you don't know, not what you know.
Having gold as an insurance policy just makes sense right now.
There's 12 different things that can go wrong right now in the geopolitical side of things, the banking sector, the dollar, the stock market.
So there's a lot of reasons to have that insurance policy.
And I'm one of those people that, you know, I hope you buy gold and I hope it goes down.
You know, I hope it goes down in price because that means that the rest of your investments are doing well.
That means that the economy is doing well.
Everything's, you know, thriving.
But unfortunately, we're at a point right now with all the money printed, With some of the things we have going on in the banking sector, with the debt bubbles created, with Jerome Powell having to raise interest rates because of inflation, that pretty soon there's going to be a price to pay.
And again, I don't know how severe it's going to be, but I sleep well at night knowing that a portion of my money is in physical gold.
You know, it's the end-all, be-all, no counterparty risk.
Everything else is just credit.
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