It this way I would not be surprised to see um by the middle of this year the dollar losing its purchasing part the tune of you know possibly 25 to 50 percent foreign I’m wealthy I’m founder Adam Taggart the U.S dollar crushed nearly every other currency in 2022 though it’s off nearly
10 percent from last year’s highs now while much debate currently centers around whether the dollar will weaken further or will resume its run higher in 2023. today’s guest is more concerned about how much longer it has left as the preeminent currency in the world when Aleister McLeod head of research
For gold money was on this program last he made a dire prediction that the world’s major Fiat currencies were in the process of failing far faster than many were imagining he returns to the program today to update us on the latest details and timing of his Outlook
Alistair thanks so much for joining us especially late your time in the UK that’s very much my pleasure Adam thank you for having me oh it’s a pleasure Aleister oh it’s great to have you back and um as we were talking about before the camera started here uh your last appearance on this
Channel is one of our most watched videos ever uh so not trying to put too much pressure on you but you’ve set a high bar let’s see how we do with this one all right well a number of questions here for you but let’s just start with
The high level one I like to kick off when you come on this program Alistar what’s your current assessment of the global economy in financial markets well it’s splitting into two um first of all if we look at America and what I call the Western Alliance because that is now
Um it is lining up against the Asian uh hagamons I think that we’re heading for a rather nasty deep recession now the reason I say that is that banks have moved away from risk now they can’t contract their balance sheets as much as they would like they are over
Leveraged and particularly uh if you look at the American Banks and take out uh the stuff which doesn’t which appears if you like us um uh shareholders funds but doesn’t qualify for tier one Capital calculations then the American Banks actually have no balance sheet space at
All and that has been compromised by the huge quantities of quantitative easing since March 2020 so much so that roughly 2.2 trillion of that quantitative easing has now gone back into the FED in the form of reverse repos now this hides an underlying economic situation where the
Private sector is being crowded out from back and credit now this is very very important what it means is that in effect the recession which everybody is talking about is not only here but it is here in Greater to a greater degree than the official statistics would reflect
And I think that’s going to continue to be a problem as well as that I see interest rates remaining High because price inflation will remain high those analysts who think that a recession means that there will be softer prices lower price inflation in other words make the mistake of not realizing that
The consumption is basically um funded at the end of the day by production and the production will decline um if you like hand in glove with consumption so the price effect I’m afraid is going to be um more driven by loss of purchasing power of the dollar
And the loss of purchasing power of the dollar is really a combination of um uh the expanded quantity of credit in the US economy both by the central bank and also by uh the Commercial Banking Network and the confidence or lack of confidence that people might have in the
Purchasing part the future purchasing part of the dollar so that’s one half of it um as for the rest of the world I think that China is very interesting uh what I detect there is that China is going to accelerate her investment around Asia which gives business to Chinese corporations and employs lots
And lots of Chinese um uh of the workforce and um at the same time this is driven by an accumulation of capital through a savings rate of around about 45 percent there is only one other country that has a higher savings rate than China and that’s Singapore that doesn’t really
Um if you like sort of uh matter as far as the the bigger world is concerned but China is really quite remarkable in its savings rate now not many people I think are aware of this well we’re struggling with uh Consumer Price inflation running at anything between seven and ten percent
Depending where you are in China believe it or not it’s less than two percent why because of that savings rate and that savings rate gives China the capital for the projects that she intends to implement all the way around Asia so I see this um having an adverse effect on
Us as well because China’s demand for energy I think is going to rise probably a lot more than most analysts expect and also her demand for key materials such as copper equally I think will drive up prices measured in Western Fiat currencies so I see the world splitting
Into two halves one half which is our half is going to be doing really rather badly whereas China Russia the Shanghai cooperation organization the East sorry the Europe the Eurasian economic Union and brics all these which now also includes the gulf cooperation Council their members Saudi Arabia and
So on all those countries I think are going to be turning their backs on the failures of the West and embracing the prospects of Asia all right um great summary and there’s a lot you packed into that answer Alistair um but uh parts of it do Echo
Um what a number of of guests on this channel have said of late um about this sort of bifurcation uh of World Trade um uh you know we we passed a couple decades we have been used to increasing globalization and a more unipolar world and of course the the dollar served as
The the world Reserve currency um there now seems to be especially accelerated by the Russian invasion of Ukraine and the West’s response to that um this you know Schism that you’re talking about where it really is Team America um or as you’re calling the Western Alliance
Um versus the Asian uh hegemens which of course you include Russia and some of the other brick companies countries in there um and you just gave us a whole bunch of good reasons why you think uh the Western alliance’s prospects are going to be waning and and the Asian hegemens
Uh prospects are going to be rising going forward um this Echoes a lot of what Zoltan pozar of Credit Suisse wrote in his very well uh circulated um piece uh back in December I want to get your thoughts on that too but maybe quickly let’s let’s stick with your comments about
Um the future purchasing power of the dollar uh and let’s say the other major world currencies right now um because last time you were on this channel you made a really bold prediction um you said that you expected the destruction of the world’s current major Fiat currencies within the next year to
18 months and I’m just curious um what two things one can you refresh your views for uh yeah can you reverse refresh for our viewers uh your reasons why you made that comment and then maybe you can give us sort of an update on the timeline as you’re seeing it right now
Because it was you know several months ago when you made that comment I’m sure things have changed on the ground since then indeed um the I suppose two ways of looking at this I mean the one one is from the domestic point of view if you think that the pressure for
Monetary inflation has subsided I’m afraid you’ve got to have another thing coming because inevitably um the budget deficit while it has narrowed recently is going to increase again that is the consequence of a recession and as I say said earlier I think this recession is actually going
To be a lot deeper than most people expect I think it is already deeper than most than the statistics uh effectively reflect not just recession in this case higher interest rates are ballooning The Debt Service payments as well correct absolutely absolutely I mean it’s a combination of things
Um uh and uh you end up with lower tax revenues and higher welfare costs and as you say the uh interest rate Outlook I think pushes up um uh really quite rapidly the um uh debt servicing interests in other words America and America is not unique
In this have we all suffer this too Britain European Union uh and also Japan are now instead in debt traps of their own historic making and those debt traps I think are going to be sprung in the not too distant future it will become apparent I think to investors that
Um bond yields are going to have to rise and rise and Rise because the demand for um uh um sorry yeah uh the the government’s demand if you like for funding is going to effectively flood the market with um the requirement for uh purchasing these bonds
Um there is a separate uh issue here as well and that is uh the uh International the non-american ownership the foreign ownership of US Dollars and U.S financial investments according to the U.S treasury tick figures they total now around about 30 trillion they’ve already dropped from about 34 trillion uh mainly
Due to portfolio effect it must be admitted but there has been some liquidation uh in there and you can see that if you look carefully at the figures another point which is worth making is that with a trade deficit in the current fiscal year looking like almost a trillion dollars
Um you would think that with the other side of the trade deficit would be uh Capital Imports as it were to make the trade balance that is not happening so the selling pressure on the dollar may not be readily visible but it certainly is there now I want to turn to
Um the situation over Ukraine um clearly uh Putin has been misled by his generals um he does not have an army which is rarely fit for purpose I would have to say that if you look at the um war against the the Russian war against Japan way back in I think it was
1902 1903 it played out in exactly the same way as the Ukraine situation has so not a lot has changed in that sense but what it does is it um makes it more urgent for President Putin to prosecute a financial War he’s now got to rely on that to a far
Greater extent than he might otherwise if he’d been more successful with his Ukraine campaign and this beginning to be particularly important because the Western Alliance are now increasing their supplies to the Ukraine uh they’re sending higher technology um defense mechanisms there as well so the pain is racking up if you like on
The Ukraine front now if we go back to the middle of last year there was a Petersburg International economic Forum which was attended by 14 000 people and there were 81 official delegations and many many diplomats and leaders who were there in an unofficial capacity as well
Now what Putin said and it’s worth be just running through this because I got it on my other screen here caught in the inflationary storm many nations are asking why bother exchanging goods for dollars and Euros when they’re losing value right before our eyes indeed the economy of imaginary wealth is being
Inevitably replaced by the economy of real valuables and hard assets this is as to Sultan pozar’s point according to the IMF today’s remember this is the middle of last year according to the IMF today’s Global foreign currency reserves contains 7.1 trillion dollars and two and a half trillion euros and this money is
Depreciating at an annual rate of about eight percent moreover it can be confiscated or stolen at the whim of the US if it disapproves of something in a country’s policy I think this has become a very real threat for many countries that keep their gold and foreign exchange reserves
In these currencies according to objective expert analysis in the coming years a conversion process of global reserves will get underway reserves will be converted from weakening currencies into tangible resources like food energy Commodities and other raw materials clearly this process will further fuel Global dollar inflation
Now what is important about this is that he was quite clearly giving a signal to those 81 official delegations that they have got to sell dollars and sell euros and transfer whatever foreign currency reserves they feel they should have into um perhaps the not so much the ruble but
Certainly uh the Chinese Yuan and also Commodities particularly monetary Commodities such as gold very very clear signal now what this means is that he can actually create the selling to drive the dollar down and I would conclude that he has got more power over the future of the dollar than
Um the fed or indeed the U.S treasury in the foreign exchange markets now this is um also falls very much in line with the experience in history of this sort of situation when you get foreigners who are worried about the loss of purchasing power of a currency which they hold they
Turn sellers first inevitably what you find is that uh you know domestic users of that currency don’t see this danger at all and at the moment when I talk to Americans they don’t see this danger at all but what we can see is it from the international
Viewpoint and I would ask anyone seeing this video to just think about that International aspect that is where the weakness in the foreign exchanges will come so as to the point in terms of timing which was your basic question um we can see now that um we are likely to get pressure for
Higher um commodity prices coming through fairly shortly why because the winter is not over yet you’re going to get higher demand from China for energy particularly oil the oil price I saw someone said that they expected the oil price to go to 140 on the back of Chinese the Chinese economic recovery
Copper and so on and so forth all these things are going to rise in price measured in dollars what that reflects is a loss of purchasing power of dollars as far as those Commodities are concerned so the people who are listening to uh Putin will be thinking very hard about making that switch
As to another Point interest rates are not over yet they will continue to rise and as they rise bond yields will rise with them which means the bond price is full you will find that Japanese institutions will be liquidating their U.S Investments not because they think that
Um you know their domestic bond market is more attractive but they don’t want to take the physical losses in a foreign market the same I mean they’ve already done this with French bonds they’ve been selling French bonds uh for losses basically because they can see that Rising bond yields on French
Debt uh is destructive of portfolio values and also not only bonds but when it comes to equities you will find foreigners will see an equity bear Market developing which they do not want to be involved with so we can see that the Dynamics for um selling the dollar are there already
It’s a process which has probably just beginning to start because as I said earlier most of the Fall so far in the quantity of dollar Investments plus um Bank balances has fallen from around about 34 trillion down to 30. most of that I would put down to portfolio
Effect but the selling I think is there and we are tipping on the edge so where are we in terms of timing well as I said earlier I think President Putin has got the pressure on the Ukraine situation racking up against him so he is not going to hang around
At the moment uh certainly uh Europe is is um is finding its unseasonably warm but if you look at longer term longer range forecasts we can expect a cold snap to start later on this month maybe around about the 20 to 25th when that happens the ground will freeze very very
Hard in the Ukraine whether um Putin decides to advance his uh his tanks under those circumstances which he could well do or whether he decides to continue with this current policy of making it unlivable in the Ukraine by removing all power generation all electricity distribution so that
People are cold and hungry well we have to wait and see but I think that time is not far off and as that cold snap spreads we are also we will also see gas consumption going up in Europe which basically means that um the European countries will be
Looking to top up their supplies and they will be in the market for more gas one of the things that’s driven down the price of natural gas is their reserves are pretty much full that is a situation which will change as the winter progresses all right um very detailed answer um
You’re really proving that this is sort of such a multi-factorial issue that’s going on um I’m gonna I’m gonna maybe just pick up that the question um in a perhaps a different way here which is um you just talked about how um Putin um is likely going to escalate the
Financial War uh component particularly because the ground war is not going exactly the way that he wants um in terms of your your timing of you know a material amount of the world shifting away from the dollar into other currencies um you know as as Putin begins to
Accelerate things like Wendy I know you said we’re just the beginning of that process but but when do you think it’s going to matter I mean are we still sort of in this like you know 12 month you know from here timeline or I don’t put words in your mouth yeah
What do you think I think it’s going to matter sooner than that because you’ve got to look at it I think from the fed’s point of view and also from the U.S treasury’s point of view they already have an inflation problem um I mean inflation is currently running
It’s only like seven percent in America it’ll probably drop a bit further but with um interest rates where they are which are about four and a quarter to four and a half on the funds rate and headed higher yeah yeah I mean they’re going to go higher um there’s pressure
For them to go higher I am sure that the FED would rather like to see um the you know the transience of uh um prices coming through as soon as possible but um uh realistically um that is going to be a waiting process and that is that is best case that
Really is best case so if we have a situation where the dollar starts to weaken measured against Commodities in particular and gold as a signal if you like of that then I think it’s probably going to drive the authorities in America to act sooner rather than later um
What happens with the other currencies I can see that uh there are foreign exchange positions which would need to be reversed because until very recently uh the right thing to have done would have been to um sell yeah and sell Euros by dollars and pick up the interest rate
Differential this is reflected if you like in uh you know currency crosses um the currency forwards um something like 90 of which according to the bank of international settlements uh have dollars on one leg so there’s a lot of unwinding of that situation to occur so
In this initial phase I would expect to see a rally in the other currencies not because I think they’re any better than the dollar I mean quite honestly I think that the the Euro has got a very limited life I don’t think it’ll survive this at all
Um but you can see why there’s a certain amount of repatriation of funds if you like and this also ties in with what happens with um bear markets I mean in Bear markets what do you do you sell the foreign stuff in your portfolios and if the foreigners own
Um you know on current figures roughly 30 trillion dollars of which I think about 12 13 or 14 trillion is invested in in stocks uh you know I mean what do you do you you know that’s that’s on the market all of a sudden and it could happen very very quickly
So um it’s probably um it would be too simplistic to point to just one thing but to um uh accept your phrase that there are many moving Parts in this um those parts I think are going to come together and they will probably come together fairly quickly because from
Putin’s point of view he cannot afford to hang around and I think I would like to make another Point his um strategy for some time has been to let America make all the mistakes I think that’s changing and I think it’s also changing as far as China is concerned
And the thing that’s fascinating and this is a um if you like a marker for US Saudi Arabia has clearly taken the signal from the Western Alliance that you know in another 10 years or 20 years or whatever we don’t want to have fossil fuels so we’re not going to do any
Business with you in your fossil fuel so go away Saudi Arabia go away golf cooperation Council meanwhile what does China do China comes along does it deal with Qatar for 27 years supply of natural gas president XI goes to Saudi Arabia you know and all the flags are
Out and all the rest of it and oh you know he’s sort of walking along there going to the the um uh Palace the Royal Palace you know flanked by Horsemen and all I mean you know this did um Biden get any of this I don’t think he did you can see where
This is going no quite not he only got a fist bump I believe so uh hardly that I think but anyway yeah good point um he didn’t even get what he gave Putin at the uh uh the the G20 there which was the one before this last one which was high five
I don’t know if you’ve noticed that um they had obviously come to an agreement without telling anybody else so what we now have is um Saudi Arabia wanting to join bricks they’ve said that they are also applying to join the Shanghai cooperation organization as um you know in an Associated form
And very importantly as far as we’re concerned uh they have marked the birth of the Petro Yuan and the death of the Petro dollar now this isn’t going to happen let’s say overnight I mean but it’s a gradual process you can see where this is going right if we no longer have
The requirement to hold dollars to buy our energy but we can do it with Yuan and remember that’s an economy which is going to be demanding this energy and the currency will go up on that basis relative to the dollar it’s bound to then what are you going to do you’re
Going to sell dollars you’re going to buy you one okay and another little sorry one one little marker in this which I think is is is a side issue but Indica indicative of where this is going the Russian national wealth fund has just changed its articles
So that it can hold 60 percent of its Assets in Yuan and forty percent of its Assets in gold now that is very important this is not a huge fund but the point about it is that if you know um if you if you know your gold history you will know that
Um uh um so Isaac Newton when he was Master of the Royal Mint uh worked out that the correct backing for the currency should be 40 specy now in those days it was it was uh silver and then he set a gold silver ratio which gave everybody a headache but
Eventually it went on to Gold 40 what is uh the Russian uh National wealth fund doing 40 so I think I propose of um uh Zoltan pozar’s sort of rather vague um story about you know moving you know brettonwood three and all the rest of it
This is putting a bit of Flesh on it all right so I’m glad you mentioned that because um I I know we’re sort of working our way to gold in this discussion we we’ve been talking about the Fiat currencies up until now um but now you’re getting into you know
The Petro Juan right where you know all of a sudden one is being tied uh to oil and um we have seen and you have talked a lot about um the fact that I believe the progression that you see is shifting away from the purely Fiat regime back to some form of
Commodity-backed currencies um there’s been a lot of talk of late of potentially China eventually backing the one by gold and talk about Russia backing the ruble by gold so what do you see right now in terms of the progression here do you see a a hard asset-backed currency emerging on the
World stage anytime soon it’s too early to say that I mean the one thing I have noticed is the jealous way in which central banks hoard their gold and uh you know these guys aren’t really interested in you or me they’re not interested in in what we think about gold what they
Are interested in is a holy article because there’s no counterparty risk and legally it is money and the rest is credit so they understand I’m sure it’s just not a barbarous relic just to make fun of bernanke’s absolutely right but you’re basically saying look at what they do not what
They say but just to be pedantic actually what Kane said was uh it was the gold standard which was The barbarous Relic not not gold itself but I mean other people since then have called it a pet rock so yeah I think no I mean that’s nonsense the fact of the
Matter is that legally money is gold or silver or copper physical physical metal um and of course uh you know today we talk about gold in particular as opposed to the other two and it’s very very important point to re to realize that the the the distinction between gold and currencies and
Um uh uh Bank credit is that gold is money it is legal money there is no counterparty risk the rest is credit which is exactly what the original JP Morgan said in testimony to the Congress back in 1912 and he was right I mean you know he he was right um
I yeah I mean I so I don’t see them at this stage parting you know parting with with gold or offering a gold exchange standard rather like the British one which went from 1817 to 1914. but the thing that’s interesting is that um with the amount of global Capital that
Is likely to go into the yuan in the coming years the Chinese could well find that they don’t want to see the Yuan driven up to ridiculous levels now they can control that by either one of two means or popular probably both the obvious one is by expanding the amount of credit which
They will do they will do to um uh Finance the developments and all the rest of it all around Asia that is is easy but that might not be sufficient to keep the Yuan um if you like at a at a level which everybody is comfortable with
But so the way you do that maybe is to use gold to keep the Yuan done now that’s the thought which I don’t think anybody is really talking about at the moment but it just it it occurs to me that if a gold standard is going to be
Introduced it will probably be for that reason rather than the one which we would expect which would be to stabilize currencies to stop them falling in purchasing power in any event um one of the problems I have a big problem with using a gold standard is
That you you can’t just go on a gold standard without um amending uh your fiscal policy you and fiscal policy already the level of Taxation in the west is so destructive of economic performance that um uh you know you can’t have an economy which is going to perform reasonably well
Um uh you know without substantially cutting uh government involvement in in the economy it means reducing it right back and if you look at um I mean the real success post-war of course was Hong Kong and their um the taxes were were fixed at I think 13 or
14 no other taxes there was just income tax that was it and uh government uh spending was controlled accordingly I mean I can’t can’t really imagine that happening in the western you know in any member of the Western Alliance yet yeah I can’t imagine a little bit sorry we don’t need to go
Down the rabbit hole of Italy or France or whatever right right I just can’t imagine any you know current sitting political body in the west um proactively deciding to shrink themselves as dramatically as as would be needed to do that right if it were to happen it would only be forced upon them
Well exactly and um you know I mean no politician has the mandate to do that the only time that he would get a mandate to do that would be in a real crisis where um everything is I mean currency collapse for example and you’ve got to try and rebuild an economy
Out of nothing under those circumstances you could probably cut government involvement in the economy and get away with it but not until it’s crisis first solution second I’m afraid okay um all right well look let’s let’s go into gold and let me kind of re-ask my
Earlier question as we get into gold um which is um you know I know you just wrote a piece uh prospects for gold in 2023 so why don’t you share your outlook for gold um for the coming year but but maybe as an entry into that um
Uh Beyond just gold as an investment vehicle you know from what we’ve just been talking about it sounds like you think it’s its role as a monetary uh vehicle uh will be rising from here you know unclear perhaps exactly how it gets manifested you gave one way in which it
Could be by China but anything else you might want to say about Gold’s monetary prospects as well we’d love to hear yeah um most um gold bugs look at it from the point of view you know his goal going up um measured in dollars or whatever currency you like
Um and they see it treated as an investment and by that I mean that you buy gold with the view to making a profit in in uh you know the currency of your choice um that is not the way to look at it uh the first point to understand is that uh
Gold is legal money and it is therefore um something that you uh own when you want to get out of the risk of fiat currency so that’s the first point I’d like to make and um uh you know everybody I talk to I’ve always encouraged them to try and look at it
That way now the other thing is that if you look at the purchasing power of gold um for Millennia I mean we can go back to diocletian’s edict which I think was around about 230 A.D or something a long time ago uh 1800 years ago
Um He Set uh maximum prices in stone and you can look at those prices one of the things that’s interesting is the gold silver ratio is 12 on on that edict um but the prices of things like um you know clothing and food and beer and so
On so forth are pretty much the same today as they were then there are variations of course when prices are gone when priced in Gold exactly and of course Fiat currencies have come and gone ever since um so really going on that um theme
Um what I did was uh I looked at the price of Commodities in uh Fiat currencies and uh also in gold and actually the person who first did this was James Turk he he published a book recently where he showed his favorite chart which I’ve seen present many times
Uh of uh the price of oil in gold and the price in in in in dollars now the price in dollars uh going back to 1950 was around about 2.60 something like that a barrel um today it’s what 75 dollars a barrel the price in Gold has actually Fallen by
Roughly 20 percent over that time with minimal volatility now to to test this hypothesis I also did it for baskets of um Commodities um baskets which are put forward put together by the imf’s database and uh when you look at Metals um agricultural products which and which
Are non-seasonal in other words not you know not uh bound to a harvest cycle um and various other raw materials uh you can see that it’s exactly the same story the price of these things in Gold if you take an index of them you know the different indices and you average it out
Um the most you see is you know they may double they may have but that’s it whereas in paper currencies I it’s It’s Not Unusual to see something go up you know several thousand percent but it’s because it’s the paper currency going down that’s the important point
So when I look at the prospects for gold really what I think people must do is to understand that it’s not the prospects for gold it’s the prospects for the Fiat currencies which it is measured in that’s what you’ve got to look at that’s what I look at and that’s why I uh
Emphasize as much as I can that the future for the currencies is most important and that is why what Putin says uh is something that we should listen to because he has the power to undermine the purchasing power of the dollar which you know drive up the price
Of gold to in measured in dollars to whatever you like it really doesn’t matter um but the fact of the matter is that it’s its goal which is sort of trackling Along on on a constant path where it’s the dollar going down and I think once
You can grasp that I think you can formulate an idea as to why or why not you should hope gold as opposed to dollars okay and you said at the beginning of this conversation that you think the prospects for the western-based Fiat currencies are waning going forward and obviously I think from
What you just said you’re saying kind of the um Arbitrage is the wrong word to use but but the differential of um purchasing power of Western Fiat currencies waiting um purchasing power of gold if not waxing is at least holding steady and so you know the way to preserve your
Purchasing power and who knows maybe even some relative gain you know is making the shift from paper to physical that that actually absolutely that is accurate I mean I would add to that that if we have a situation uh which I would not be surprised of uh Western Fair
Currencies declining very sharply then there will be a rush into gold which will drive up the value of gold measured against other Commodities it’s bound to but then we’ll add some speculative fervor to it is what you’re saying well yeah I mean or not speculative but maybe
Desperate yeah yeah yes I think that’s probably a better description exactly though but I mean it it it will it’s extremely unlikely that its purchasing power will go up um you know maybe more than twice something like that measured in other currencies I mean if you go back to
Um the uh hyperinflation in Germany in 1922 and 23 the purchasing part of um uh gold was constant in dollars but what it was was the loss of purchasing power of the paper Mark so that you know you could I mean there were reports of um foreign students at Berlin University
Who out of there um you know the money in dollars sent to them by mum and dad uh they could buy streets of houses you know um and there was uh um you could also have bought um you know a really good six-bedroom house in a posh part of Berlin for
Um a hundred dollars a hundred dollars at that time was just a little less than five five ounces of gold so but what it is is it’s the loss of the purchasing power of the currency that is the thing that impoverishes everybody and you want to be in a
Position where you’re not caught out um if you like in that in you know in in that sort of decline all right so um let’s let’s talk about the risk of that kind of decline um uh in terms of sort of your Threat Level right where we are today
Um you know sounds like you’re saying look people should be be getting you know should at least be making the transition of of investing some of their paper um going forward more and more into physical um but is this sort of you know do it gradually as you can dollar cost
Averaging or is this sort of a storm warning like hey the the you know potential for a big drop in loss of purchasing power in these Western Fiat currencies uh the risk is much higher these days than it used to be and therefore act more swiftly well the former approach is an
Investment approach which I would strongly discourage that’s not the way to look at it um you should be looking at hoarding gold uh as a safety mechanism uh to protect your life really because you know measured in declining um uh uh currencies you know any asset
That you have is going to lose value relative to Gold so you can see that really you should be holding gold holding gold it’s not an investment it is something that you will eventually spend um as to um you know how close we are to a cliff
Edge on this I think we are actually quite close to a cliff Edge and this is why um uh you know I went to some trouble to to repeat what President Putin said in the middle of last year um I think there’s you know there is every indication that uh we’re going to
War against Russia we’re putting greater pressure on Putin and uh under those circumstances I don’t think it can be very long before he takes whatever action he thinks will undermine the purchasing power of the dollar it always starts on the foreign exchanges first it will lose substantial purchasing power
Through the foreign exchanges to begin with you will find that Resident Americans or in my case resident Brits will not understand what’s happening to their currency so um they will not understand that it’s actually just worthless paper until it is too late and then you get what uh Ludwig von misis called the
Crack up boom when finally everybody just gets rid of every bit of currency they’ve got in their hands they can grab hold of to buy the good whether they need them or not they just want to get rid of the paper so um that is that is is really you know
The end of the currency and I wouldn’t say at this stage that um we are going to go to that extent but to stop it we’ll require Western governments to back off from this Keynesian idea that you know go the gold standard as a Barbara’s Relic
Um that we can stimulate our way out of trouble and all the rest of it that has got to go you have got to have a completely new way of thinking in the amongst the monetary authorities you have got to have um an acceptance that the only way to
Stabilize the currency is to turn it into a substitute for gold and that means bringing in a credible Gold Exchange standard so how long do we wait until we get there I mean does the Dollar fall to the point where um you know ten thousand buys an ounce
Of gold or a hundred thousand buys it ounce of gold I really don’t know we’ll have to see at the time uh with what sort of alacrity the monetary authorities actually move I suspect that with preconceived ideas which have moved away from the classical economics um uh into macroeconomics particularly
The Keynesian and monetary’s variety there will be a huge reluctance to accept anything like a return to um gold as money and the rest is credit and understanding that you can only protect the value of credit by anchoring it to gold okay um I just want to distill several things
You said Aleister just to make sure I’m capturing it correctly for the viewers here um you were saying given kind of the current Threat Level and this is not personal financial advice but you’re basically saying it’s more of a run don’t walk uh moment in terms of
Building up your exposure to Gold here um and the danger of not doing that you’re saying is is not taking action until it’s too late where you you already explained that you think you know the vast majority of folks probably just won’t understand what’s going on
Until when they do it’s way too late to to take corrective action um you also said something really interesting and I just want to make sure that we flesh out for people is uh you said I think you use the term horde gold but as I understand you you
Goal is not the end in your mind right gold is the the means by which you protect the purchase your purchasing power as we sort of shift from one regime to the other and then what you want to do is is deploy it into other assets when the new regime is up and
Running and to use a really extreme example of that we’ll we’ll mention again your example there Weimar Germany where uh you know somebody was able to take five uh gold coins and buy one of the nicest houses in the block yeah absolutely yeah that’s that’s absolutely right and it’s I mean you know
Another point I would make um is is that you know the idea that you can sort of maybe um you know buy it on declining prices or whatever now that’s an investment approach um it’s important to understand uh gresham’s law in this and that is that
The bad money drives out the good the good money is gold the rest of it is credit the credit starts collapsing you’ve got to have gold I mean it’s it’s really that is that is as simple as that it into that point I want to let you talk about this
Um we have already sort of seen that in um relatively recent periods of time over the past two decades you know since I’ve known you uh Alistair where um the precious metals markets have really tightened Supply wise right we certainly saw that happen and sober just as recently as 2020 right where premiums
Went through the roof they’re actually still pretty high even two years later but um you couldn’t get any right I mean sure you could get a dealer who would be willing to sell you sober but in terms of delivery you know you might be told
You have to wait you know weeks to maybe months or hey I’m not entirely sure right so um part of the story about the point of gresham’s law is that bad money can drive out the good money to such an extent that if even if you want it you
Can’t get your hands on again exactly yeah no that’s absolutely right I mean I think I think in that sense gold is easier to obtain uh than than silver I mean if you if you want huge great quantities then um you know join the queue is the answer but for most of us
Uh you know who don’t have um millions or billions of of paper currency whichever one it is um I think that uh you know the gold should be reasonably available I mean that’s what we do at Gold money we store uh Gold Silver and also Platinum Group Metals there that’s like you know
They’re they’re meant to be precious metals but they’re not monetary Metals um we store that for our customers around the world and we don’t have a problem um you know I I think we’ve got a certain amount of inventory though you know that’s not not my activity it’s all
In Gold money so I don’t really know but we haven’t had any problem really um uh acquiring uh gold and silver for uh you know for our customers so I mean it it is uh perfectly possible for individuals to accumulate gold and silver um at uh at current prices or close to
Current prices another aspect which is worth mentioning is um and I’m not quite sure how it works in America but in this country um sovereigns are legal tender now this is important because if you want to say buy an asset um let’s assume that Sterling has
Collapsed and you want to buy an asset then you can buy an asset uh with legal tender where legal tender is required to buy that asset I mean I’m thinking about property and things like that for example so um you know there are you know sort of
Little things to take into account here um I think you need to do your research for your own personal circumstances uh to see what actually best suits um how you see your life going through what inevitably is going to be a very very challenging time over the next two to
Three years okay one of the things I tell people Aleister is um uh you know the difference between having a couple ounces of gold and no ounces of gold and I know your recommendation is not just a stop at a couple ounces but the difference of
Having a couple ounces of gold is you already have more gold than like 99 of the population right yeah so so if if we were to wake up and I know you’re not saying it’s going to be like this but if we were to wake up one day and and the regime
Change happened overnight monetarily um your relative you know how better off you are relative to to everybody else can be dramatically different even just having a couple of these ounces because you’ve got something that again 99 of the world is desperate for um and doesn’t have yeah yeah yes I mean
I I think I think another way to put what you’re saying is um you know a few a few ounces of gold um will be something like an insurance policy if you like right um it makes sense I think in that in in that context and the great thing is that um
Everything else can go to hell in a handcuff but there’ll always be uh demand for gold um in exchange for goods and services so you know I mean uh you know ultimately you might be just spending gold gold sovereigns or silver dollars or whatever it might be
Um to buy those um uh goods and services but uh in the interim until the currency rate collapses if you can fix a price then you can actually sell gold to raise that currency like that so it works it works um you know either way it’s you know and I can’t emphasize strongly
Enough that legally the only money is metallic gold metallic silver or metallic copper principally metallic gold that is the only form of money legal money in existence and it’s been like that from Roman times I mean going back to the 12 pandex of in uh I think about 1500 BC
Um then formalized in uh um uh Justinian’s pattern decks and re-translated into the um into the Eastern Roman Empire in Byzantium and then translated again back into uh uh European law in the form of uh of of uh the Swiss translation of them um you know for every country in Europe
And also every country within the um our British Empire which included you by the way at one stage um it is legal money it still is well an artifact of that is that you know when the Constitution was written it says in there that that the only form of of
Legal Defender is supposed to be gold and silver species and of course we’ve we’ve somehow turned a blind eye to that now that we’ve entered the Fiat regime but it’s it is still codified there in our constitution yeah so when when credit Goes to Hell in the Hancock I
Mean whether it’s because the banks go Bust or whatever I mean you know there’s so many things that can happen I’m not saying that the banks necessarily will go bust but you can see that um we’re going to go through some very very Rocky times Rising interest rates at the same
Time deepening recession um what’s going to happen to all those lovely uh Fair currency assets or assets that depend on Fiat currencies uh it’s it’s it could be a major Wipeout so that clock that that classification of acid so um yeah to my mind uh there is only one
Sensible thing to do and that is hedge out of total fit uh dependency and you can only do that by having real money okay um as we wrap up here uh Alistair I’m going to ask you some probably unfair questions to be tossing you uh this late
In the conversation and we’ll just take quick answers at this time um but uh I I I know you don’t like people to think of gold in these in this way but um you recently wrote your prospects for gold in 2023 um do you have any sort of price Target
In mind or at least the sense of how you think it’s going to perform you know versus other currencies given all the trends of this year no you wanted a brief answer um because that’s not the way I look at it I mean it’s and the way I look at it
And this is actually after a lot of thought it’s not just just me right A lot of people I’m asking you this not not to undo all the good work of this this discussion but it’s it’s still a ways that a way that many people think
And so I want to try to pull them into the discussion by speaking their language well all right let me put it this way I would not be surprised to see um by the middle of this year the dollar losing its purchasing part the tune of
You know possibly 25 to 50 I would not be surprised I think it would require um a certain level of Crisis to get there it might require President Putin to panic and say right we’ve got to put the cell you know the sell orders in for for gold
Um it might just be everybody waking up to the points which we’ve been discussing in this in in this video um that um you know hold on a minute you know the Western Alliance is 1.2 billion people who are basically resting on their Laurels going woke not working um compared with
Um the 3.8 billion people in the Shanghai cooperation organization which basically is most of Asia uh who are rapidly industrializing um have a prospects for a strong Chinese economy driving the whole of that continent uh while we languish and uh you know we’re sort of turn around and
Say well you know we don’t want fossil fuels in there meanwhile getting the benefits of nice cheap energy well we’re turning up you know I don’t know how it’s going to work out like that but I can see we are destroying ourselves if you like
Um so yeah I mean I I I I never ever put it in targets for the price of gold or the price of anything because I know from my own personal experience that it’s never right yeah so so I’m sorry I’m going to duck that
One but what I will say saying that the dollar might lose 50 of its purchasing power this year people can do their own math it could easily do that it could easily do that and I may be underestimating the loss I may be overestimating you know who knows we
Can’t know I mean I’ve read enough documents about the other prospects for the future um to know that it’s all the pardon my Express expression you know it’s just guesswork it really totally get exactly but but I think it’s fair to say given your current Outlook
Um you see good potential for dollar down hard and gold uh up as as measured in other currencies which you encourage people not to think about it in anyways yeah yeah all right and then last uh it’s super unfair for me to ask you this at the end because I’m sure you
Could opined about it for a lot longer I just know if I don’t ask it that we’re going to get a lot of comments in the questions from the people that follow this closely which is not a huge percentage of this Audience by the way but is
Um is there a role for you know Bitcoin crypto to play here um or do you have that you know do you have a a particular position against crypto as a potential solution here because of course that’s what you hear from a lot of people which
Is like oh well if you think Gold’s gonna be good about you know protecting your purchasing power crypto’s the real answer absolutely I mean um uh the answer is no I don’t see it having any role whatsoever it is born out of speculation in paper money and everybody who earns Bitcoin is thinking
That you know I bought it at fifteen thousand dollars or whatever it might be and I think it’s going to go to half a million two million you know they’re all bulls and um the point about being bullish about Bitcoin is you buy it at one price and I hope that you’re going
To make a wonderful profit in dollars you know that’s that’s actually what it’s about now the whole of the crypto industry is going through um massive problems um I don’t need to dwell on those so far it hasn’t affected the price to bitcoin but it’s hard to see how the exchanges
And the whole sort of crypto structure uh is likely to survive I would also make the point that there is a legal distinction in criminal law between money and credit on the one hand and other forms of assets which also include cryptocurrencies and the distinction is this
If let us say uh you have a painting on your wall and someone steals it uh and um later on you find it on someone else’s wall someone who bought that painting in good faith from another party is still your property you may have to go through a few Hoops
To prove it but it’s still your property you can claim that property back and no compensation to the new owner in inverted commas is is is required this is the basis in which Jewish families in particular have been recovering assets stolen from them by the Nazis so that is
One category now when you look at money and credit if someone let’s say breaks into your house and steals your wallet with you know lots of lovely hundred dollar notes in it and or one dollar note depending who you are and then goes and spends them
Um in a shop shopkeeper takes them in good faith you can’t claim that back it is a very important legal distinction and this again goes back to Roman law the difference between money credit and other forms of property so now we’ll return to bitcoin Bitcoin is not legal money that’s the important Point
Furthermore it has a blockchain behind it which means that the authorities can work out if the Bitcoin that you own or was last seen going into your wallet was the proceeds of crime from someone uh earlier down the blockchain so you have absolutely no security of possession of
Your Bitcoin now I’ve had you know enthusiasts say well you know they can’t find they can’t access my wallet and all the rest of it but rarely what they’re doing is they’re saying um uh you know the law can’t be it can’t be applied to it I’m sorry but that’s not a way
Forward huh that’s super interesting I I I’m not a crypto expert but you know just from what you’ve just said there Alistair uh let let’s project ourselves 10 years into the future and you’ve got some Bitcoin in your wallet your you know Cold Storage wallet at that point
In time or wherever it is presumably you could get contacted by the authorities saying hey we just found out that eight years ago at some point along the history of those Bitcoin it was used in a fraudulent activity and therefore the the claimant prior to that is really the true guy
Who’s got the the claim on this Bitcoin so it’s gonna take it back exactly exactly and and they can access um all the records of the miners and not only that but every exchange where you might have bought this if you haven’t got it you know from a minor uh
Has to do kyc know your know your customer um you know money laundering regulations and all the rest of it so you will be identified as the last person to which that little you know whether it’s a whole Bitcoin or a part Bitcoin actually went so the idea that uh the authorities
Um you know can’t track you down if they really have a go at Bitcoin uh it’s not true they’re already doing it from what I understand so this is a very important weakness I mean the idea of the blockchain as a self-auditing process I mean brilliant concept but in terms of
Property it’s actually property rights it actually turns out to be very very bad news I also think that it’s quite possible that as um the whole cryptocurrency thing collapses which it it is doing at the moment I’m not saying that the collapse will actually be Bitcoin but it’s all
The others I think you’ll find that the authorities will feel um uh uh Keener to clamp down on this sort of speculative activity and they will make it extremely difficult for you to buy and sell Bitcoin okay um and there’s all sorts of questions about cbdc’s and whatnot Alistair but
We’re gonna have to leave that to the next time we have you back on this channel here thanks for giving us so much of your time here again uh uh Alistair very uh critical topic I mean there’s there’s very few things more foundational uh to the global economy
And the financial system than actually the the money that we used um all right so for folks that have really enjoyed this discussion with you perhaps maybe the first time they’ve they’ve been exposed to you where can they go to learn more about you and follow your work uh I write a weekly
Um article which is published on goldmoney.com um and uh that’s on Thursday and it’s released about sort of midday ish I suppose uh Eastern Standard eastern time or Eastern Standard Time and on Friday the following day I’d do a market report which is basically a sort of Market related summary of
Um you know sort of what’s happened in the weekend how I see things developing so that is a bit more angled if you like it the investment Community even though I’ve just denied that they should be and shouldn’t be involved with this but anyway all right and those are both
Under the money.com correct gomoney.com yeah both of them are online I’m head of research there and uh that is what I do great and you’re also have a Twitter account right you you posted Twitter from time to time yep at McLeod Finance so um if you want to join the happy or
Not so happy band of Twitter followers please do great all right well when we edit this Alistair we will put up the the links to bothgoldmoney.com and and your Twitter handle so folks know exactly where to go um all right well look folks in wrapping up here one quick free resource for you
Um for those of you that may have been motivated by alistair’s uh discussions here especially about uh the the wisdom of owning precious metals um I get bombarded with those questions all the time in terms of how to buy them I’m sure Aleister does as well uh certainly go check out goldmoney.com
Um and their Solutions there but a wealthyon I’ve written sort of a free primer that just sort of goes through all the major options available uh to the novice to intermediate uh and even in some cases Advanced uh bullion uh or gold owners and uh you know there’s
There’s a number of different ways you can own it and there’s pros and cons to each um so that that free primer just sort of explains it all and may be very helpful in helping you determine where you want to start I had to go read that just go to wealthyon.com
How to buy and also too um uh Aleister made some you know I think made this point very well throughout the conversation here but uh you if you go to a traditional financial advisor and look for their help they oftentimes they try to steer you away from the precious metals and in most
Cases it’s because they can’t collect a fee off of them and so they try to talk you out of them in fact you know kind of a very common refrain analysters sort of smiling and laughing as I’m saying this from a traditional financial advisor is you want to own some gold only crazy
People own gold right well Alistair just told you all the reasons why it’s not um highly recommend that as you build your financial plan and and especially if you want to have your portfolio managed by a professional which I advise that almost everybody watching is do you
Want to find a financial advisor that is aware of all the issues that Aleister and I talked about here and that has a healthy respect for the role that precious metals can play in your portfolio if you have a good one that already does that great stick with them
But if you don’t or you’d like a second opinion of one who does feel free to talk to one of the financial advisors that wealthyon endorses to do that just felt a short form at wealthyon.com to set up a free consultation with them again it’s free it doesn’t cost you
Anything there’s no commitment to work with these guys they really just offer it as a public service to help make people better informed help help people make better informed decisions with their wealth um you know in regards to all the trends and issues that Aleister and I have just been talking about for
The past hour here last if you’ve enjoyed having Alistair on this program would like to see him come back on at some point soon please do us a favor and support this channel by hitting the like button and then clicking on the red subscribe button below as well as that
Little bell icon right next to it Aleister I can’t thank you enough buddy I hope we can have you back on soon I’d love to be back and thank you very much for having me Adam oh it’s always a pleasure Aleister everybody else thanks so much for watching
