“Gold just suffered one of its worst corrections in a decade, silver has been crushed, and precious metals investors are asking the question nobody wants to ask: did gold fail the test? In this interview, Alasdair Macleod argues that the gold price correction is not the real crisis. In his view, the real danger is a credit crisis, rising bond yields, the U.S. debt trap, dollar debasement, QE to infinity, and a stock market bubble built on leverage. Gold has crashed, but Macleod believes the real panic has not started yet.

“Alasdair Macleod also explains why he believes central banks are still buying gold, why China may be moving away from U.S. Treasury debt, why COMEX open interest matters for gold and silver prices, and why investors may be misreading the relationship between gold, the U.S. dollar, interest rates, inflation, and the broader stock market bubble.

🧠 About Alasdair Macleod
Alasdair Macleod began his career as a stockbroker on the London Stock Exchange in 1970 and later worked in investment management and banking, including as an executive director of an offshore bank in Guernsey. His work focuses on sound money, credit, banking risk, monetary history, fiat currency debasement, gold, silver, and the relationship between real money and the modern credit system. He publishes his current research and commentary through Macleod Finance.”

Visit Alasdair online: https://substack.com/@macleodfinance

CHAPTERS
00:00 - Intro
01:52 - Gold and Silver Investors Face the Hard Question
03:34 - Is There a Near-Term Catalyst for Gold?
04:01 - Alasdair Macleod: Gold Is Money, Not an Investment
06:09 - Bond Yields, 20% Rates & the Dollar Problem
07:30 - U.S. Debt Trap, QE to Infinity & Dollar Debasement
11:23 - Iran War, Hormuz & Pressure on the Dollar
12:19 - Why Did Gold Drop 20%?
16:13 - Central Bank Gold Buying & the Declining Dollar
20:18 - Get Out of Credit: Real Money, Gold and Silver
21:00 - Silver, COMEX Open Interest & Physical Supply
22:13 - China, Treasury Debt & Gold Accumulation
23:19 - Gold vs. Stocks Since Nixon Closed the Gold Window
28:41 - “Get The Hell Out of Credit”
29:30 - Stock Market Bubble, Leverage & 1929-Style Risk
39:24 - Bundesbank Gold, China Gold & the New York Fed
43:10 - Gold, Retirement & the Two-Stage Crisis
46:30 - How Close Is the Financial Crisis?

This is thoughtless nonsense which assumes that currency deposits in a bank are the ultimate safety. The delusion is primarily due to accounting investment returns in these currencies, which ignores the factors changing their purchasing power. Last week has been a prime example of this error, as the values of currencies have been driven higher against those of gold and silver.

Trading short-term is particularly hazardous. But there is a major benefit for stackers prepared to benefit from an arbitrage between current investment misconceptions about the role of gold and silver, and the reality which always undermines currency values following war.

In early European trade this morning (Friday) gold was $4225, having rallied from a low of $4029 yesterday morning on news from the White House that a settlement is being agreed with Iran which will lead to Hormuz being opened this weekend or possibly Monday. But it should be noted that Iran said that there’s no agreement and restated its red lines. At $67.30, silver rallied this morning from yesterday’s low of $61.50.

The problem we have in assessing the immediate prospects for gold and silver prices can be summed up in the following bullet points:

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“Alasdair Macleod believes the silver market is facing a powerful convergence of forces that investors may be underestimating. In Part 1 of this interview, Macleod argues that silver is being mispriced by markets despite persistent supply deficits, growing industrial demand, China’s aggressive silver accumulation, and mounting stresses in physical silver markets.

”Macleod explains why disruptions tied to the Strait of Hormuz and sulfuric acid supplies could impact global silver production, why China may have abandoned its long-standing policy of suppressing silver prices, and why he believes silver should increasingly be viewed as an industrial metal rather than simply a precious metal.

”In this episode Of The Real Story with Michelle Makori:

• Why Alasdair Macleod believes silver is significantly mispriced
  

• How the Iran conflict could affect global silver supply
  

• China’s record silver imports and what they signal
  

• Why silver was added to the U.S. critical minerals list
  

• Growing demand from AI, data centers, EVs, solar and defense industries
  

• What collapsing COMEX open interest may be signaling
  

• Whether a major silver squeeze is developing
  

• Why China may no longer be exporting silver to global markets
  

• The role of industrial demand in the silver bull case
  

• Why Macleod believes silver could potentially double from current levels

We can forget any ground invasion which would be required for a win, however pyrrhic. Temperatures are now too high for troops not climatised for them. The US and Israel are running low on ordinance, the former having depleted stocks by supplying Europe and Ukraine while Iran has an arsenal accumulated over the last 47 years and particularly since 2003 when the US destroyed Iraq.

Furthermore, there are credible reports that Iran’s hypersonic Fattah missiles are technologically superior to US and Israeli weapons, travel at Mach 10—15 and are virtually impossible to shoot down. Iran also has the backing of China and Russia, guaranteeing accurate targeting and technological input.

Read on for an increasingly certain outcome…

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In this article, we look at why bonds and equities are certain to lose significant value, probably rapidly. And we compare the situation today with how gold performed in 2008—2009, which was the last major financial crisis. That was a private sector leverage crisis. Today, we have a government debt crisis.

Introduction

An optimistic jobs report on Friday was like a volley of grapeshot over markets. A fear factor crept into equities about the likely course of interest rates. The fear is that if the economy is strong, then with Hormuz shut and driving prices higher, bond yields might rise. Just a hint of this danger led to a near 5% fall on the Nasdaq 100 index, indicating how febrile the equity bubble has become.

It also exposed the shallow depths of thinking by equity investors. Comments by President Trump on his Truth Social are all too common in investor thinking: “With a great jobs report, like just announced, stocks should go up, not down… That’s the way it was for 200 years. Growth does not mean inflation! How else can a country attain GREATNESS??? President DJT”.

Like nearly everyone else, the president appears blind to the inflation danger. For a start, inflation of prices is a misnomer. When prices across the board rise, it reflects a fall in the currency’s purchasing power. Clearly, as a consequence of the closure of Hormuz shortages of oil, gas, and downstream products such as urea, sulphur, fertilisers, sulphuric acid, and helium to mention a few will lead to a global economic slump unless central banks fire up their printing presses. Inevitably, government revenues will collapse while welfare costs increase. Furthermore, the political imperative will be to support financial markets and slumping economies to prevent a thirties-style global depression. Without a gold standard to underwrite the dollar’s value and a US government debt to GDP of about 125%, the dollar will face collapse if these policies are followed. That is almost a political certainty.

US government debt-to-GDP was only 32% during the last major oil shock in late-1973. It led to inflation of 11% the following year and 10-year treasury note yields of 9%. All G7 nations faced similar difficulties, with the UK and Japan worst affected as the table below illustrates.

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As our introductory chart shows, gold and silver are barely changed on the year. As a measure of investor sentiment, North American investors sold down 12 tonnes in gold ETFs in the last two weeks of May, according to The World Gold Council. Doubtless, this week they sold some more.

This is one proxy for market sentiment. This disinterest is also reflected in open interest on Comex, which has collapsed to the lowest levels for decades, even lower than at the end of the 2011—2016 bear market when sentiment was extremely negative, and from which the current bull market commenced:

Mood swings in markets always lead investors to buying tops and selling bottoms. Market makers know this and exploit investor sentiment ruthlessly. The time to kick an investor hard is when he is down. This is why very few people trade successfully and consistently.

In horse racing, the bookies make lots of money at the expense of the punters. It’s just the same in financial markets. This is why at MacleodFinance we discourage trading gold, insisting on stacking in the knowledge that the risk is in currencies and credit and not gold. Gold is legal money without counterparty risk, and has been remarkably stable in its purchasing power over long periods, as the next chart of the oil price in gold and US dollars demonstrates:

Currently, oil priced in gold is trading at a 40% discount to its stable post-war 1950—1972 Bretton Woods level, whereas in fiat dollars it has risen 25 times with great volatility along the way. This story is repeated for all commodities, reflecting the dollar’s loss of purchasing power, which is now accelerating, made increasingly obvious by the Iran war.

Would you rather have gold, which in times of currency stress is stable, or the fiat dollar with its inherent weaknesses? This is what the dollar is doing relative to gold:

If you had $1000 in cash in the late-1960s, it would have lost $994 of its purchasing power by now. Furthermore, the rate of this loss is demonstrably accelerating.

The current gold/dollar exchange rate is irrelevant when fundamental factors are leading to a renewed loss of purchasing power for the dollar, misleadingly reported as price inflation. The Gulf war is bringing on the crisis, leading with certainly to an economic slump and rising prices. This is certain to reduce all G7 government revenues while at the same time increasing their spending commitments. From a debt-to-GDP starting point averaging about 120% on average, not only are bond yields set to rise significantly, but G7 government debt will simply become unfundable. Our next chart shows that the US long bond yield is on the verge of breaking higher, with disastrous consequences for financial assets and the dollar itself:

You would think that common sense will intervene and prevent this outcome. But that ignores a simple fact: economic outcomes are driven by politics, not sound economics and certainly not common sense.

Take Japan. Its prime minister thinks she can defend the yen by increasing spending in an attempt to strengthen the economy. In other words, she is having a Liz Truss moment but with a debt to GDP of 250%. And Japan depends almost entirely on imported oil and gas as well as fertilisers etc.

Doubtless, the Bank of Japan is furiously defending the currency against this madness, which is challenging all-time lows, while bond yields are soaring:

Last time this happened, which followed the oil crisis of October 1973, Japan’s CPI inflation rate soared to 25% by spring 1974, while the wholesale price index rose nearly 35%. The situation for Japan today certainly rhymes with 1973—1974. And being the largest source of foreign investment capital for the US and the rest of the world, the inevitable crisis Japan faces will affect us all, particularly the US government because Japan is the largest foreign holder of US treasuries.

In conclusion, current investor sentiment obscures the brutal facts facing the fiat currency world. Anyone who gets upset about losing money day-to-day by holding gold is suffering from extreme myopia and is prey to the real professionals such as central banks and market-makers who play on investor sentiment to get you to sell your gold to them.

Hold Fast!

“Alasdair Macleod outlines a rapidly shifting global monetary and commodity landscape driven by physical metal flows, geopolitical disruption, and weakening confidence in paper markets.

”He explains how China’s aggressive accumulation of silver and other critical materials is reshaping global supply dynamics while exposing a growing disconnect between physical markets and exchange pricing. The conversation also explores how rising industrial demand, constrained supply chains, and changing export behavior in key nations are intensifying pressure across silver, copper, and energy related inputs.

”The discussion expands into the broader geopolitical backdrop, including tensions involving Iran and the Strait of Hormuz, and how disruptions in energy and chemical supply chains could ripple into agriculture, manufacturing, and food prices. Macleod also examines the implications of weakening confidence in fiat currencies, accelerating foreign positioning shifts out of US financial assets, and the long term consequences for gold and silver as alternative stores of value.”

INTERVIEW TIMELINE:
0:00 Intro
1:30 Global Silver Supply Conflict | Resource Control & Strategic Metals Competition
15:00 Gold Market Manipulation | Gold Accumulation Strategies & Price Suppression Debate
19:00 Global Commodity Shortages | Supply Chain Disruptions & Raw Materials Crisis
25:00 BRICS Expansion | De-Dollarization Trend & Collapse of US Dollar Dominance
43:50 Alasdair Macleod | Macro Finance Insights | Monetary System Breakdown Analysis

· Global silver supply is tightening, because 56% of mine supply comes from copper and nickel ores the processing of which requires sulphuric acid which is not easily sourced due to the Hormuz closure and China withdrawing from exporting it.

· Copper and nickel prices are hitting record highs suggesting that silver should be as well.

· Industrial demand is increasing driven by a number of factors, adding perhaps 10% or more to The Silver Institute’s estimates of industrial demand, increasing the supply deficit. The industrial shortage is increasing significantly.

· China is severely restricting silver exports and has become a net buyer in record quantities.

· Speculative interest in London and New York paper markets is at the lowest level seen in over a decade, leading to poor liquidity and potentially another bear squeeze.

The current setup

There are a few indications that something is afoot in silver even though speculative interest in both gold and silver is almost absent. This tell us that selling is almost exhausted and the speculators’ next action will be to buy.

It’s not just silver. Gold’s open interest on Comex has also collapsed to levels not seen for nearly 20 years:

Open interest in both metals is now lower than at the bottom of the 2011—2015 bear market in gold. But today, they are trading in fundamentally different conditions, leading the wider commodity world to higher price levels.

Silver’s industrial demand is accelerating

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“In this Monthly Wrap Up episode, Craig Hemke for Sprott Money welcomes Alasdair McLeod for a powerful end-of-May market update covering gold, silver, bonds, and the growing risks facing fiat currencies. They discuss silver and gold prices, buy-gold strategies, buy-silver opportunities, central bank buying, silver shortages, bond yields, and why precious metals may be entering a major repricing phase. If you’re following gold price trends, silver price action, physical silver demand, and where to buy gold and buy silver in today’s market, this is an important conversation you won’t want to miss.”

Timeline:
00:00 Introduction and Overview of May's Events
02:39 Economic Landscape and Bond Yields
05:31 Inflation, Commodities, and Purchasing Power
08:46 The Role of Gold and Silver in Current Markets
11:40 Market Dynamics: Selling in May and Going Away
14:40 Treasuries, Yield Curve Control, and Market Predictions
17:21 The Impact of Oil Pricing on Precious Metals
20:30 The Disparity in Gold and Silver Pricing
23:33 Open Interest and Market Sentiment
26:35 Conclusion and Future Outlook

A geopolitical change such as the one currently evolving before our eyes is rarely without conflict. The tectonic clash between America and emerging Asian powers acting in partnership is such an event. Aptly described as a Thucydides Trap, the battles in Ukraine and Iran echo how the rise of Athens instilled irrational fears in Sparta leading to the Peloponnesian Wars, which Sparta lost. If it was not so, today the Ukrainians would not be being butchered, and nor arguably would the crisis in what we call the Middle East, but the Asians call West Asia have descended into a major conflict against Iran.

In the former, like the Spartans the Europeans are fearful of Russia’s territorial ambitions. But the issue is far larger than that due to her partnership with China, which is now the most productive and powerful economy on earth. And the Israelis, whose recent heritage is European are fighting a similar battle against Asian Muslim forces, and now specifically Iran which is in partnership with Russia and China.

The fight is against a new emerging world order. Militarily, the Asians have evolved their technologies and strategies to cope with the threats of today, while America and NATO have been stuck in the past, their forces unsuited for modern warfare. If Thucydides was alive today along with Pyrrhus of Epirus, he of the Pyrrhic victory, there would be little doubt about what they would say about the current situation.

Without their guidance we can make two observations. The first is that the old order will be replaced with the new, and the second is that the intervening struggle is not over, but with the US, Israeli, and NATO reserves of armaments running out, it may be over soon — perhaps in a matter of months.

Death of Empire, death of the dollar

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Open interest is now at multi-year lows

This week saw open interest in the Comex gold contract drop to under 350,000 contracts. This is the lowest it has been in at least thirteen years.

It is the clearest indication of a near total absence of speculative interest on Comex, and because Comex arbitrages with London, it will be true of that market as well. This is even more remarkable given the price rise since 2023 would normally lead to greater speculative interest, but it has collapsed instead, particularly after December 2024.

We see the same trend in Comex’s silver contract, which is next:

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As a young stockbroker, I found that business from late-May onwards into the summer was doubly frustrating. Investment managers from whom I hoped to get buy orders would be “out of office”. While I was at my desk or on the floor of the stockmarket, they would be at Lord’s for test match cricket, followed by Royal Ascot for the racing and socialising, Henly for the rowing regatta, and Wimbledon for tennis. Quite simply, the buyers were out of town and in their absence the market would wilt.

For these reasons, selling in May with a view to returning to the market later in the year made sense. So off I would go to Lords, Ascot, and Wimbledon as well.

This time, there are extra reasons to be cautious.

The first is that equities have become completely detached from the reality of what’s happening to bonds. In general terms, when bond yields rise, that’s bad for equities and when they fall that’s good for equities. This is because bonds set a return hurdle for equities to at least match and even exceed their yield returns, given that equities are higher risk with uncertainty.

If you chart an equity index, such as the S&P 500 and compare it with the long bond’s yield, the correlation should be consistently negative. In other words, a track to higher bond yields will lead to lower stock prices. By inverting the bond yield, the two series should track each other. This is demonstrated in the chart below:

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Any technical analyst will tell you that when the yield on the long gilt (illustrated below) breaks above the 4-year upward sloping channel, it will rise strongly. The minimum arithmetic projection is to 11%, while the logarithmic is 22%.

Similar readings are evident in all G7 currencies. The link is with their purchasing powers, which can now be expected to decline at an accelerating rate. This was less obvious to financial markets before the Iran war, but nevertheless the trend with the entire commodity complex being in a bull market was established in 2020, showing that the major move to higher bond yields correlated with the commodity bull, which initially peaked in mid-2022.

Since May 2025, long before the war on Iran kicked off commodities began their current run only just surpassing the May 2022 highs so far. The closure of Hormuz and its knock-on effects have only brought forward commodity price rises and not created a new trend. Clearly, the commodity bull has a long way to go, which brings us back to the relationship with bond yields.

As a matter of plain fact, a commodity bull market is evidence of a fall in currency purchasing power, conventionally recorded as inflation when it works through to consumer prices. Bond markets will reflect this fall in purchasing power through higher yields. And when investors expect a further decline in purchasing power for a currency, they will only invest in government bonds which offers them compensation for the risk of falling purchasing power. This is why both bond yields and commodities rose together between 2020—2022.

The threat to UK gilts

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“In this exclusive May 2026 interview, we are joined once again by Alasdair Macleod to break down the latest macro-economic events sending shockwaves through the precious metals market.

"From India’s sudden request for citizens to limit their gold and silver spending, to France’s strategic move to liquidate and repatriate its U.S.-held gold, the global landscape is shifting rapidly. Alasdair also provides an urgent update on his recent Substack article, “Silver: The squeeze resumes,” and explains why Wall Street giants are screaming to buy gold while everyday investors remain dangerously on the sidelines.

”Are you prepared for the financial hurricane?”

In the interests of alerting as many MacleodFinance free subscribers as possible to the dangers to their wealth along with anyone to whom it might be forwarded, this article is free to share, and you are encouraged to do so.

Introduction

We can now see what a disaster the Iran war is with respect to the supply of energy and downstream products, such as sulphur, sulphuric acid, sulphates, and helium to name just a few. Furthermore, other exporters of these essentials are restricting their supplies into global markets to protect their own industries. Higher prices due to supply constraints are bound to follow affecting all goods and services, and we need to understand the consequences with clarity.

So ingrained are false narratives about inflation, that what actually drives changes in a currency’s purchasing power needs explaining. The key point is that macroeconomic analysis fails by being mathematical to the exclusion of changes in human preferences.

The first argument to grasp is that a medium of exchange, such as the dollar currency, is a commodity the same as any good or service with a price. Just as the price of a commodity depends on the sum of individual demands in the context of the supply available, the same is true of a currency. This differs from macro-monetary analysis which only assumes that additional currency supply from the issuer will lead to a decline in purchasing power of the currency unit. This may well happen, but it is not a simple matter of a proportional effect.

Putting the matter in the context of human preferences gives a far better understanding of why a currency’s purchasing power alters. If we assume for a moment that there is no increase or decrease in the currency quantity or the supply of a range of goods, then it is changes in aggregate consumer preferences for or against possessing the currency which will alter its “price” or purchasing power.

Nowadays, we are not only considering a consumer’s cash in the form of banknotes, but the currency resources he has at his disposal in the banking system: current and deposit accounts, overdraft facilities, other liquid savings, and credit cards. Now, let’s assume that our consumer happens to like beans and wants to buy more. He has a simple choice. He can reduce his purchases of other items to release funds to buy more beans, or he can draw on his cash facilities to pay the price.

If he decides to draw on his currency balances to pay for the beans or any other consumer good, he exhibits a preference for them over cash. If, as is likely to be the case, our consumer in common with a significant number of others decides to draw down on their currency balances, then the “price” or value of the currency will decline, undermining its purchasing power, while the values of the goods bought in exchange will increase due to the extra demand. It follows that if a majority of consumers act in this way, that the purchasing power of the currency will fall, potentially significantly.

So far, we have not considered price effects if the quantity of currency is expanded or contracted, only if it does not alter. But the quantity of currency has been expanding for a considerable time, as the chart of dollar currency supply indicates:

When the quantity of currency in circulation expands, and its expansion is matched by an increase in demand for it, then the currency will maintain its purchasing power. But if demand for the currency fails to keep pace with the increase in its quantity, then its purchasing power will decline.

We can now anticipate a combined effect, rarely predicted by the mathematical economists:

· If demand for a currency fails to match the expansion in its supply, its purchasing power will decline.

· If sufficient actors take the view that they should reduce their currency holdings in favour of goods, then not only is the currency sold, but the demand for goods increases their value, further undermining the purchasing power of the currency.

This is why changes in consumer attitudes can have a dramatic effect on a currency’s purchasing power. The effect is not to be underestimated. If all consumers begin to realise that rising prices for everything are due to the currency’s value declining, then they will dump all the currency at their disposal to buy goods — any goods indiscriminately. The currency becomes worthless, because as a commodity, no one wants it.

The Iran war and its consequences

The virtual closure of the Straits of Hormuz and the ongoing conflict between America with Israel against Iran is destroying supplies of energy and energy derivatives while disrupting shipping logistics. The production and supply of almost all goods are affected. The outcome for prices is clear. It is impractical for individuals to stop buying everything because higher prices are unaffordable. They are bound to draw down on their currency balances to acquire their necessities.

This means that they will sell currency for the goods they deem a priority, reducing the value of the currency even without the issuer inflating its supply. We repeat: the key to understanding the value effect of the currency is to know that it is a commodity being sold in preference for other commodities. Some commodities and products will see significant declines in demand due to far higher prices, perhaps with some being unobtainable. So not only will preferences disfavour currencies, but of very many goods as well.

As well as the drawdown on currency balances and even liquidation of savings reducing the value of currency, whole swathes of economic activity will see a slump in demand. A slump in economic activity undermines tax revenues, throwing government finances into chaos. Governments with welfare and other interventionist commitments will be unable to fund their increased budget deficits.

There is only one outcome: governments’ costs of funding will rise sharply, so bond yields will soar undermining the value of all financial and other assets that depend on low interest rates.

The consequences of a major disruption of the supply of all goods, and how it undermines a currency’s purchasing power has so far been described assuming the currency issuer does not expand its quantity. Even without that additional currency supply, the conditions exist for a collapse in the currency’s value driven by a flight to goods accompanied by a collapse in government finances. This is what is meant by a fiat currency’s value depending on no more than faith. That faith can evaporate even without any change in its quantity.

However, governments are bound to respond by attempting to raise their support for the economy by increasing price controls and business subsidies, all of which add to debt which is becoming unfundable.

The funding crisis commences from abroad

Essentially, G7 governments face a debt crisis where funding cannot be achieved at any level of bond yield. The higher the yield, the worse the position. The first to recognise the dilemma are foreign holders of a currency and the US dollar is particularly exposed. According to US Treasury TIC figures, Foreigners own $44.6 trillion in financial securities, including $21.2 trillion in equities and short-term deposits of $8.9 trillion. The signs of decline are already there, with these totals beginning to decline.

Furthermore, central bank and other top insiders continue to sell dollars for gold, sending a clear signal that they expect the dollar’s purchasing power to decline further. With the US Treasury relying on foreign holders to buy their debt and certainly not sell, it faces a funding crisis even without rates going higher. If the Fed fails to raise its interest rate, the dollar will simply weaken sharply priced not just in gold, but the entire commodity complex. This advance warning is already happening, as prices for gold and any basket of commodities have indicated.

It is a situation which could evolve very rapidly into a complete destruction of the dollar’s value. And where the dollar goes as a fiat currency, given that it is the international reserve currency, others will follow. The value and economic destructions will be on an unimaginable scale. The only escape is to get out of currencies early before they lose all their value. The alternative is gold, silver and storable commodities without the counterparty risk which is the defining feature of currencies.

“Paul Buitink talks to Alasdair McLeod again, who is a former banker and gold expert. They take you deep into the mechanics behind the positive Deutsche Bank report on gold, explaining how central banks’ gold holdings, geopolitical tensions, and macroeconomic distortions are setting the stage for a gold price explosion. We break down the risks of relying solely on traditional markets and explore how countries like Russia and Turkey are positioning their gold reserves amid global uncertainties. You’ll learn about the historical parallels from the 1970s, the impact of interest rate shifts, and why the current environment hints at something unprecedented: a potential move towards a gold-backed system or at least a significant shift away from fiat.

”You'll discover how central bank gold policies and geopolitical chaos influence the gold market. Why the correlation between interest rates and gold is shifting back to historical norms and the evolving role of gold in a potential future monetary system and the risks of ignoring this signal

”This episode emphasizes why understanding gold’s potential is critical in today’s volatile macro landscape. Ignoring these signals could mean missing the opportunity to protect your wealth — or worse, falling victim to the collapse of fiat currencies. If you’re a forward-thinking investor, a macro enthusiast, or someone worried about the future of money, this is essential listening.

”Whether you’re already stacking or just curious about what future monetary systems might look like, Alasdair's insights will challenge what you think you know about gold. Prepare for a paradigm shift that could reshape your view of safe havens and financial sovereignty.”

Follow Alasdair here:

MacleodFinance Substack

Dedicated to explaining why gold is money and the rest is credit. Dedicated to explaining economics relevant to the preservation of wealth. And dedicated to explaining geopolitical developments relevant to investors.

By Alasdair Macleod

https://x.com/MacleodFinance

Follow Paul on X here:
https://x.com/paulbuitink

Deutsche Bank Report:
https://www.dbresearch.com/PROD/IE-PR...

Timestamps:
0:00 Intro
1:31 Deutsche Bank's $8000 gold forecast
6:31 The middle road between a gold and a fiat standard
9:13 European attitudes towards gold
12:10 Why is gold not going up for now
23:22 Central banks' fake independence, Kevin Warsh
30:00 Why stock markets haven't crashed yet
33:38 Great Britain's challenges and why you should migrate
38:38 Outro and Alasdair's mission

The chart above prices the dollar, which is only imaginary money, in real money which is gold. In 1968, when the exchange rate was $35 for an ounce of gold, if you bought $1,000 by selling 28.57 ounces of gold that $1,000 would be worth only 0.22 ounces today. The loss is represented by the double-headed arrow in the chart above. The pace at which the dollar’s value is slipping is now accelerating, even plotted on a log scale.

Of course, the relationship is almost always presented the other way round, showing gold having risen from $35 to $4,540 giving the illusion that gold is rising and the dollar is constant. The illusion continues to fool investors and commentators in G7 capital markets, but it no longer fools other foreign holders of the dollar, principally the Chinese. This is why gold and silver are being drained out of London and New York. Central banks and sovereign wealth funds along with increasing members of Asia’s private sector actors are dumping their excess dollars and other G7 currencies, encashing them for real money without counterparty risk.

Slowly and then suddenly, is what Hemmingway said about bankruptcy. National bankruptcies are no different. But the way they are reflected in national bankruptcies is different, being exposed by loss of faith in the currency and the growing realisation that it is only imaginary money.

That is ahead of us, how far is difficult to tell. This week, gold and silver were on

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This prompts the question as to why this should be so. Obviously, it reflects changes in the spread between gold’s lease rate and rising bond yields. This is a legacy of the last four decades, when the propaganda struggle to establish the dollar as money replacing gold gradually succeeded.

At least, this was the belief that gradually held sway. If the gold standard was no more than a barbarous relic and gold was little more than a pet rock, of course the dollar was king. Never mind that the dollar was a fiat currency, an imaginary money created by the US government’s central bank.

So long as participants in financial markets believe this tosh, then clearly a rise in dollar interest rates will act to make non-yielding gold less valuable. In other words, we can see why it is that when rates rise, gold weakens. But it is an effect always constrained to a period of perceived currency stability in domestic markets. Not only do US markets default to this error, but markets in thrall to the dollar, such as London and elsewhere fall for it as well.

A large part of it stems from the financialisation of economies stemming from London’s Big-Bang in the mid-eighties, when gold was used as the basis of a carry trade investing in US T-bills. Gold was sold for T-bills, fixing interest rate differentials as drivers of price in collective minds.

The relationship between gold and the dollar of the 1970s and instances of heightened inflation and bond yields were quickly forgotten. At the beginning of that decade, the Fed’s funds rate was 3.7% and gold $35. In 1981, the fund’s rate was 19% and gold hit $850. In other words, there was a positive correlation between the two.

Why the difference?

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Now that bond yields are demonstrably rising into multiyear highs across all G7 government bonds, investment committees will be meeting this week to assess the impact on their investment portfolios and how to derisk them.

They are in a bind, because the conventional view is to change portfolio weightings by reducing equity exposure in favour of bonds. But what do you do when both investment categories should be sold? Obviously, there must be a dash for cash. That is the likely conclusion for domestic investors. But what of their foreign investments?

Ostensibly, the reason for investing in foreign markets is to spread portfolio risk. But here again, when all G7 markets face rising bond yields, values are set to decline significantly, with the addition of currency risk. In these cases, foreign investors always repatriate their investment capital by selling foreign investments first.

The conclusion these investment committees will inevitably come to will be to sell down foreign investments in preference to their own, as the primary source of raising cash and derisking portfolios. It will be followed by adopting a more cautious stance overall, perhaps selling down more volatile equities and reducing the maturity profile of bond allocations.

All this assumes that markets were fairly valued before Hormuz. But as the chart below shows, this is far from the case:

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“On this episode of the WTFinance podcast I had the pleasure of welcoming back Alasdair Macleod. Alasdair Macleod has over decades of experience in financial markets, with a focus on monetary history, systemic risk, and the enduring role of gold. He is one of the most respected voices on sound money and wealth preservation.

During our conversation we spoke about the Middle East conflict, shifting world order, neutralising the US military, Petroyuan, precious metals future and more. I hope you enjoy!

0:00 - Introduction
1:50 - Middle East conflict
7:43 - Neutralising US military
10:40 - Taiwan
14:32 - Multipolar world?
19:00 - Saudi Arabia vs Iran
24:34 - Petroyuan
28:57 - China fixed currency
32:04 - Precious metals prices
37:10 - Liquidating gold
39:23 - Comex defaults
42:20 - One message to takeaway?

Alasdair Macleod is is an educator and advocates for sound money through demystifying finance and economics. His background includes being a stockbroker, banker, and economist.

Alasdair Macleod started his career as a stockbroker in 1970 on the London Stock Exchange. Within nine years, he had risen to become senior partner of his firm.

Subsequently, he held positions at the director level in investment management and worked as a mutual fund manager. Mr. Macleod also worked at a bank in Guernsey as an executive director.

For most of his 40 years in the finance industry, he has been demystifying macroeconomic events for his investing clients. The accumulation of this experience has convinced him that unsound monetary policies are the most destructive weapon governments use against the common man. Accordingly, his mission is to educate and inform the public in layman's terms what governments do with money and how to protect themselves from the consequences.”