Today’s relationship between money and credit started with the Romans. The first system of Roman law from which modern banking and commercial relationships evolved was the Twelve Tables (or Tablets) of 448 BC, which through subsequent jurists’ rulings established methodical habits of business, and defined value. The Twelve Tables were the foundation of Roman private law. And the fact that even today commercial banks have evolved their businesses on the basis of the Romans’ rulings says something about the durability of banking in its current form. The systemic problems we face today are more the responsibility of a far younger phenomenon — the rise and evolution of central banks.

It is central banks, coordinated by a Bank for International Settlements committee which are trying to develop systems to give the state more control over media of exchange, devising means of directing new forms of credit to enhance the states’ desired objectives, and withholding credit from those deemed disadvantageous to policy. A further evolution of the current system of fiat currencies is intended, which already operate in defiance of Roman and therefore our common laws and which history confirms always fail before reverting to the Roman-based system.

The legal distinctions of money and credit

What interests us in this topic is the system of recording transactions, which following Rome’s Twelve Tables and subsequent juristic findings were divided into two classes, res mancipi, and res nec mancipi. The former referred to a small list of physical property transferred by a formal ceremony of mancipation, or final settlement. It consisted of bronze-copper ingots (the physical form of money at that time), lands and houses on Roman soil, beasts of burden, slaves, agricultural rights, and other rights over land which are res mancipi. By this definition only a bronze-copper ingot weighing a Roman pound, the aes, was corporeal money and the final payment for discharging debt obligations. It was conveyed formally in the presence of five witnesses of full age (cives) and another citizen (librepens) carrying a balancing scale. The aes would be weighed on scales in front of the witnesses and handed to the seller in exchange for goods and to settle outstanding obligations.

Everything else were termed res nec mancipi, including incorporeal debt obligations, which were always entered into to be finally settled in aes in due course. The relationship between money and credit, the latter always the other side of a debt obligation and being subject to final payment was thereby defined in Roman law.

At the time of the Twelve Tables very few Romans were literate, agriculture dominated, and settlement practices reflected society at the time. The strict formalities of a property transfer in res mancipi were abolished by Emperor Leo in 469CE, reflecting the economic and social advances in the eight centuries since the Twelve Tables. Other forms of money, principally the silver denarius and gold aureus coins had entered into use during that time, replacing the earlier aes. The distinction between items confined to res mancipi and res nec mancipi was finally abolished in Justinian’s Pandects in 520CE. Reflecting the rulings of jurists Gaius, then Ulpian and Paulus in the second and third centuries CE, the relationship between money as final settlement and credit with its matching obligation was crystalised in their original relationship.

Jurists were independent wealthy statesmen and legal experts who initially advised the praetors and judges with the approval of the emperor. There is no equivalent of jurists today, but they directly influenced edicts issued by praetors and legal judgements on all matters. In the first two centuries CE, the power of the praetors to create edicts was gradually curtailed and juristic rulings given fuller legal weight. Thus it was that the three jurists particularly associated with the evolution of credit, debt obligations, and security for debt which had become common practice over preceding centuries derived their legal influence. The juristic system was only superseded by the direct authority of the emperor after the third century CE.

Despite these legal evolutions, Roman law firmly established that credit is always the other side of a debt obligation only to be extinguished by final agreement between creditor and debtor. The jurist Gaius (130—180CE) ruled that a debt obligation was strictly personal between debtor and creditor and could only be transferred to another creditor with the agreement of the debtor. Because the Romans had left Britain before Justinian’s Pandects, this was the accepted practice in English common law until the court of common law merged with the Court of Chancery in the 1870s, which had developed the law of equity before being replaced by the Chancery Division. It was this merger in the late-nineteenth century which put an end to the system of qualifying novation whereby a debtor would agree to each transfer to its creditor, unless under the terms of the original contract the debt obligation was agreed to be transferrable at the outset.

Following and contradicting Gaius, Ulpian in the early third century CE ruled that a debt obligation was transferrable between creditors without the debtor’s permission. He recognised the commercial need for a creditor making a loan of property to retain its value to the creditor even though he temporarily lost possession of it. It was formal recognition of a practice which had already been in use between private parties in preceding centuries.

It was Ulpian’s ruling of a creditor’s right to transfer obligations that became incorporated in Justinian’s Pandects (530—533CE). Through the advancement of banking, by common agreement bills of exchange were not required to be indorsed at every transfer, which until well into the nineteenth century was the principal business of banking.

The merger of Courts of Chancery with the court of common law in the 1870s finally did away with the need to indorse transfers, confirming Justinian’s rulings and permitted debt to be valued as wealth in the form of credit in possession. This is the basis of capital markets worldwide to this day.

Debt security

The Romans had two means of ensuring that the relationship between credit and debt would be secured. The first was a personal surety by the debtor, and the second a pledge of a res, an asset of economic value. Roman law with respect to the valuation, possession, and identification of a res formed a considerable body of legal evolution from the earliest days, which are not the focus of our attention. But we should note that these are still the two methods of securing a debt today, underpinning the value of all credit.

Post-Roman common law

Out of the Roman Empire evolved the colonising nations whose common laws were based on Justinian’s Pandects and the later Basilica translation of them into Greek (AD892). Following the global discoveries by Spain and Portugal in the fifteenth and sixteenth centuries, their colonies and those of the colonising nations that followed them all adopted Justinian’s legal distinction between money and credit in their common laws. Spain’s discoveries in the New World brought gold and silver into greater circulation, as did Britain’s guinea from West African gold introduced in 1663, eventually leading to gold replacing silver as the merchants’ favoured final settlement as money.

Following independence, the US adopted UK common law through Blackstone’s Commentaries on the Laws of England, including the inherited relationship between money and credit crystalised in Justinian’s Pandects. And when in evidence to Congress in 1912, John Pierpont Morgan the greatest banker at that time said that “Credit is evidence of banking, but it is not the money itself. Money is gold, and nothing else”, he was stating correctly the legal position defined in common law from Roman times.

The attributes of gold as money

To this day banknotes issued by the Bank of England bear the legend, “I promise to pay the bearer on demand the sum of [the face value of the note]” signed by the chief cashier. It requires the issuer to maintain sufficient stocks of gold in the form of coin or bullion to meet public demand for redemptions of currency and deposits. To suspend conversion of currency and deposits into gold is simply fraudulent in common law.

In the twentieth century, governments began to bend the law, starting with European combatants suspending convertibility of currencies into gold at the outbreak of the First World War. In 1933, America’s President Roosevelt transgressed common law by executive order commanding citizens to submit their gold and gold notes in return for dollars, which he then devalued by 40% the following year. The selective return to international convertibility under the Bretton Woods Agreement was in 1944, which was finally suspended in 1971. Since then, the US Treasury and its central bank embarked on a propaganda campaign to establish dollars as money in place of gold and for all other currencies to regard it as such for international settlements.

But the dollar is never money in common law. It is a broken promise to pay the bearer his right to final settlement in legal money. Since 1971 the dollar has been a fiat currency, fiat meaning it owes its status to the legislation of the country and not to the common law right of private citizens to demand final settlement in gold. The consequence is that the dollar has lost purchasing power against gold so that its value in real money has declined since Bretton Woods was “suspended” from 13.714 grains of gold per dollar ($35 per ounce) to only 0.12 of a grain currently (July 2026).

Credit today

The influence of Roman law embodied in juristic findings incorporated in Justinian’s Pandects and the Eastern Basilica delineates the basis of all our commerce today. Credit is an incorporeal asset still defined as a promise to finally pay in a corporeal asset to which no one else has a claim and includes physical metal. Circulating credit is imaginary money, not money itself. Credit can be settled in other incorporeal promises to pay, a pass-the-parcel of credit-for-credit without final settlement which is almost entirely the basis of modern commerce.

Credit is not restricted to banking. In fact, bank credit is only a minor part of our lives and is central to the entire system of the division of labour. A workman is employed for his skills, expecting payment on completion. He gives his employer credit for his work until the task is done. If he is paid in advance, the employer gives the workman credit to be discharged by his labour.

A parent educating his children by committing to pay school or university fees commits to a series of debt obligations until their education is complete, the creditors being the educational institutions. If he pays these fees in advance, then the institution is the debtor to be discharged by providing the education.

The management of a business has a debt obligation to its shareholders to provide a future stream of returns, for which the shareholders are the creditors. The idea that equities escape the debtor/creditor relationship is incorrect: the relationship still exists, it is the risks to credit’s value which differs. Creditor—debtor relationships of this sort and in the previous paragraph, even if a socialising state intermediates, dwarf the lending of banking systems and commonly escape the attentions of credit analysts.

In all credit relationships, the key is that the value of the debtor’s promise should be tied to a corporeal asset which itself is a medium of exchange, and today that is commonly gold. It is for this reason that a currency issued by a government which denies the relationship eventually fails. And before it fails, its value in terms of goods (corporeal assets in Roman law) and services (incorporeal assets) varies considerably. Figure 1 illustrates this divergence for West Texas Intermediary oil priced in final settlement (gold) and the dollar currency, which is unsettled credit and a debt obligation of the central bank.

So long as the Bretton Woods Agreement guaranteed that the dollar would act as a gold substitute between nations, the price of oil in gold and the dollar were the same for practical purposes. In other words, the dollar took its value from gold and acted as a gold substitute. Consequently, the oil price varied little in the two decades following the Second World War.

However, the Bretton Woods Agreement led to a run on the US’s gold reserves, reducing them from 20,279.3 tonnes in 1950 to 9,069.7 tonnes in 1971, leading to President Nixon suspending the agreement. No longer a gold substitute, the dollar became a fiat currency from that moment, leading to a decline in its purchasing power reflected in dollar oil prices moving multiples higher with great volatility. The instability of oil priced fiat dollars since the absence of final settlement in gold as a res mancipi since 1971 is plain to see, comparted with oil priced in gold.

The value of all credit, including that of currencies is always a matter of faith. It is true that variations in a currency’s quantity will affect its value. Even though a currency is the objective element in transactions where buyer and seller agree its value and confine price subjectivity to the goods and services being bought or sold, currency units are themselves a commodity which have a value.

Normally, users of a currency will fail to recognise the loss of its value, observing it in changes in the prices of goods and services. This naturally accords with objective and subjective relationships in transactions. But when commodities in aggregate have developed higher values expressed in currency, it is because the purchasing power of the currency has lost value. Not understanding that the currency has lost purchasing power is an error which can persist for some time, demonstrated by the substantial decline in the dollar priced in gold since the Bretton Woods Agreement was abandoned. But like any commodity, if it is not wanted, irrespective of changes in its quantity a currency becomes valueless and the promises of the issuer no longer have credibility.

The only way in which a currency’s credibility can be maintained is for the issuer to ensure that it will always be exchangeable for gold at a fixed weight. And the emergence of new forms of exchange media in future will be subject to the same basic law.

Furthermore, the Keynesian playbook is for governments to expand credit in addition, to prevent economic slumps and recessions. Coupled with domestic political priorities G7 central banks will be forced to intensify suppression of interest rates and bond yields. It is leading all these nations into deeper debt traps.

So, what is a debt trap? At the sovereign level, here is a definition:

Read more

The problem is that by managing outcomes governments always make things worse. And just occasionally the consequence is a crisis. Drop the Keynesian la-la stuff, and we can see the approaching crisis clearly. There are a number of elements to it which give MacleodFinance easy copy, but the purpose of this report is to look at it with respect to precious metals.

This week, gold and silver showed signs of turning a corner after their major declines since end-January. This morning they are tickling a little better, but investors need to focus on the big picture.

Read more

If you think I exaggerate, don’t forget that owning the means of production is a basic tenet of Marxist theory. Burnham starts with the obvious: endorsing nationalisation of steel production, utilities, transport, and energy. For his trade union backers and his backbenchers, this will only be the start; they all have their wish-lists to be funded by taxing the rich, the banks, and oil businesses.

It is a recipe for disaster, played many times before which appears to be generally unrecognised by the media and by sleepy voters. Already, on his first day in office the gilt market celebrated with the yield on the 10-year gilt rising to over 5%.

With a preponderance of foreign hedge funds and other non-UK investors long of gilts, they will become sellers as they wake up to what a Burnham premiership means. So where is the silver lining in all this?

Read more

In this week’s Live from the Vault, Andrew Maguire is joined by Alasdair Macleod to discuss why China's gold gateway marks a decisive shift in global monetary architecture, with Beijing positioning the yuan as a gold-backed alternative to the dollar.

As G7 bond yields break to levels not seen since the 1970s and currencies are exposed as nothing more than credit in decline, Alasdair delivers a stark warning — the window to exchange depreciating credit for physical gold and silver is narrowing fast.

Check out Alasdair:

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

Timestamps:
00:00 Start
03:20 Why China accelerated its gold strategy after Trump's Iran policy
08:01 How China has been accumulating gold and silver since 1983
13:44 Why G7 bond yields are heading far higher than markets expect
18:52 China's silver imports reverse decades of exports and what it signals
24:35 Why closing speculative accounts ahead of July 24th is a bullish signal
30:14 How the derivatives market papers over a collapsing physical supply
36:22 Japan: the world's largest debt zombie and what happens next
42:01 Why Russia and China are positioned to crash the dollar deliberately
50:18 Get out of credit - the only solution for individuals right now
57:04 Why physical gold must be stored outside government reach

Consequently, capital markets have sailed on as if nothing material is happening. US government propaganda and media silence are creating a cliff-edge for markets which will wake up with a nasty bump. And there are indications that the situation in the Middle East is about to worsen significantly.

However you look at it, US policy against Iran has failed to achieve any objective and has created an energy, commodity, and logistics crisis which is sure to hit global economic activity hard. Oil prices have been suppressed by the US’s drawdown on strategic oil reserves which for practical purposes are now running out. There is a mounting diesel crisis, made worse by Russia banning its exports due to refining capacity being hit by Ukrainian drones.

Diesel is the lifeblood of logistics and the way things are going it will not just be a matter of price, but diesel will become unavailable. Trains and trucks will go nowhere. And we can be sure that whatever the blah-blah coming out of the White House, the administration knows that it is imperative and urgent for the US to gain control of Hormuz.

This can only mean that a ground invasion is being planned.

Moves in this direction could become obvious to sleepy markets as soon as this

Read more

There are two interrelated facts which must be noted. The first is that the US/Israeli attempt to destabilise Iran has failed, and consequently Hormuz will remain shut for the foreseeable future. And the most recent evidence is that Iran is increasing the pressure on the US by renewing attacks on their assets in the Gulf. Furthermore, there are early signs that the Houthis in Yemen will get more actively involved and assist Iran by closing the Bab al-Mandab strait to shipping, restricting oil exports from the Saudi terminal at Yanbo.

Despite the fog of war, we can be certain that the effective elimination from global markets of 15 million barrels a day of crude and condensate plus a further 5 mb/d of refined petroleum products such as diesel and jet fuel will impact prices with shortages driving them higher. In addition, global shortages of fertilisers, sulphuric acid, and helium to mention just a few oil derivatives will have their impact. China’s response has been to protect her economy by stopping fertiliser and sulphuric acid exports, further tightening global supplies.

The second fact can be discerned from China’s policies via-a-vis the US dollar, which it has been dumping as rapidly as possible. Being closely involved with Iran, China’s intelligence appears to conform with what independent intelligence analysts tell us: that Iran has won the war and is out to destroy the US presence and her relationships with GCC members in the Middle East. Consequently, the dollar is losing credibility, which is why China is selling them and establishing a global gold trading facility in Hong Kong.

China expects nothing less than the death not only of the petrodollar, but of the fiat dollar itself.

Investors in western capital markets have been broadly oblivious to these developments. But with renewed Iranian attacks and increasing bellicosity from the US administration, there is no doubt that this is beginning to affect bond markets.

Today’s markets are driven by sentiment and not fundamentals. This is to be expected in a credit bubble where greed dominates over caution. For decades, investors have increasingly turned to charts in the way Romans examined entrails of goats to predict the future. It is easier than trying to think things through. Technical analysis is valuable for discerning sentiment and trends, but they are right until suddenly they are not.

This is the chart which is now worrying investors:

Conventional technical analysis indicates that the yield on the 10-year US treasury note is in an uptrend, also apparent in most of the other G7 bond markets. Furthermore, there are signs that the yield is breaking out above a three-year consolidation pattern. The next chart puts the importance of a breakout into context.

Read more

Introduction

Read more

“Alasdair Macleod thinks that those sitting on the sidelines hoping for a further drop in the silver price are playing a dangerous game because when silver does move, it moves fast, and as the continued decay of fiat currencies accelerates, the price move up ahead for silver could be legendary.”

00:00 Introduction
01:05 Silver is Going Much Higher
03:26 6th Year of Silver Deficit
10:15 China's Silver and Gold Production
12:14 New Hong Kong Gold System
19:50 End of Paper Gold in China
23:26 Energy Crisis and Gold Price
32:15 GDP - The Real Story
40:17 Rise of the Surveillance State

Suppressing interest rates to almost nothing for the last thirty years has made this possible, but for no longer. Japan relies on imported oil, its derivatives, and LNG almost entirely. The crisis in the Persian Gulf is undermining the economy already, pressuring the government to accelerate its debt funding with no buyers for it in sight. Not even the BOJ can come to the government’s rescue. Instead, the Minister of Finance is pleading with Japanese institutions to buy the extra government debt, which will mean selling higher-yielding US treasuries, UK gilts, and French OATS

Japan’s ultra-Keynesian experiment has run into the brick wall of reality, with consequences for us all. This article sets out the seriousness of the problem for us all.

History is rhyming

Read more

“In this episode of the Macroscopic Podcast, Alexej Jordanov speaks with Alasdair Macleod about China’s new gold clearing system in Hong Kong, the shift of physical gold and silver from West to East, and why Beijing may be preparing for a future without the U.S. dollar.

”Macleod explains why China is accumulating gold, silver, copper and other strategic commodities, how the Shanghai Gold Exchange and new vaulting infrastructure could support a yuan-gold settlement system, and why he believes Western paper gold markets like COMEX and London are vulnerable as physical demand moves east.

”The conversation also covers the possibility of Russia putting the ruble on a gold standard, the future of the dollar, the silver squeeze, China’s role in global commodity markets, and what investors should consider when storing physical gold and silver outside the banking system.”

Note that gold drifted lower when the oil price was hiked by 66% by OPEC led by Sheik Yamani. Having traded down to $90 in late-November, it then began to rise before Yamani hiked the price even further in early-January 1974 to $11.65. Gold went on to double by the year-end. If this was repeated today, we would see gold nearly doubling to $7,750 in less than four months before going on to over $8,000 in just twelve.

Food for thought, not a forecast.

Now to today…

Having shaken out the speculators, the PBOC and China’s commercial banks have taken the opportunity to acquire significant quantities of bullion. In 2026 up to May, China imported 692 tonnes of non-monetary gold, with May’s figure of 163 tonnes the highest monthly total for over a year. We have yet to see June’s total but there’s every reason to believe that this rate of gold imports has continued.

Monetary gold is not recorded in customs figures. So far this year, this has amounted to an additional 40 tonnes to end-June, representing sales of foreign currencies by the PBOC, almost all dollars, to the tune of about $60 billion. But that’s not all. She also imported 1,626 tones of silver in Q1, selling a further $4 billion. Add in the non-monetary gold, ridding the banks of a further $100bn up to May.

To this activity we can add other base metals and commodities which she has been buying such as copper. Add in sulphuric acid and fertilisers etc. which she no longer exports for dollars. Perhaps China sees this chart and understands the implications:

Read more

Ahead of the NATO meeting in Ankara this week, Ukraine stepped up its attacks on Russia, and economists have been disparaging its war economy. But as the chart of the rouble rate in US dollars indicates, the currency has been remarkably stable. However, Russia’s is a war economy, and 10-year bond yields have risen to 16.7%. And Russia’s debt to GDP is only 18%. Russia’s economy is probably more robust than those of her European enemies, whose threats verge on hysteria.

The UK, France, and Germany are increasingly belligerent. For the moment, they are funnelling arms, intelligence, and military assistance through Ukraine. Ukraine is deploying drones into Moscow, St Petersburg, and targeting oil refineries presumably in an attempt to turn the Russian public against their leadership.

Outside Russia, it is impossible to assess the degree to which this is working. What we do know is that some senior figures are getting edgy with Putin’s patient approach and the likelihood of attacks against weapon production facilities outside Ukraine appears to be increasing. From Russia’s point of view, surely it is alarming to see European NATO members gearing up their defence capabilities. For now, stocks of ordinance are badly depleted by support for Ukraine so far, and American supplies have been compromised by the war against Iran.

Read more

“Is China laying the groundwork for a return to sound money while the West doubles down on debt and currency creation? Alasdair Macleod

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

explains why Beijing's accelerating purchases of gold, silver, and strategic commodities could signal preparation for a gold backed yuan, even as confidence in the U.S. dollar begins to erode. He also warns that rising sovereign debt, Japan's growing bond crisis, and expanding government intervention across the West are creating conditions for a much broader monetary reckoning. Macleod argues that physical precious metals, not paper assets, may offer the best protection as global financial markets undergo a historic transition. Watch the interview to hear why he believes the cracks in the current monetary system are becoming impossible to ignore.”

INTERVIEW TIMELINE:
0:00 Intro
1:00 Yen currency crisis
11:05 China’s movement toward gold and silver
24:37 Socialism as "communism lite"
39:30 Macleod Finance

“Gross domestic product is a measure of the size and health of a country’s economy over a period (usually one quarter or one year). We also use it to compare the size of different economies at different points in time.”

In other words, it is being confused with economic progress, which is actually unmeasurable. Here is our accurate definition:

“Gross domestic product is total credit deployed in the economy for qualifying activities over a stated period of time”

For the Bank’s definition to be correct assumes that all credit deployment is productive, financing the production of goods and services or their consumption. It can only be true in an economy when there is no government intervention. But governments do intervene heavily in many ways to distort the relationship between production and consumption.

The distortions introduced by socialising governments are bad enough. We should know this from the collapse of state-directed economies such as the USSR and China under Mao Zedung, particularly compared with the extraordinary success of post-war Hong Kong under its free market regime with minimal government intervention.

It is even worse when governments debase the currency. It allows a government to claim GDP growth just by increasing its budget deficit, because almost all government spending directly or indirectly adds to the GDP statistic.

The point about government deficits is that they create additional spending which is not earned out of consumers’ production nor covered by their taxes. And despite Keynesian claims that deficits stimulate, we should exclude them from the GDP calculation to get a truer view of credit deployment in the private sector. The table below shows the consequences of this adjustment for G7 nations over the last two years:

Read more

“In this explosive interview, legendary sound money advocate and former banker Alasdair MacLeod delivers a no-holds-barred breakdown of why America’s influence in the Middle East is effectively over; and what that means for the US dollar, gold, silver, and your portfolio.

”Alasdair explains the geopolitical earthquake following events in the Gulf, China’s aggressive move out of dollars into gold and real assets, the terminal decline of fiat currencies, and why investors must shift from “accumulation mode” to “portfolio protection mode” right now.

Soundbites:
“The dollar is toast.”
“America is no more than a paper tiger.”
“The complete collapse of the fiat currency system is not far away.”
“It’s not the gold price rising. It’s actually paper currencies collapsing.”
“The time for portfolio accumulation is over. We’re now moving into portfolio protection mode.”
“Get out of credit and get into real money without counterparty risk; physical gold supported by physical silver.”
“China is just getting the hell out of the dollar now. She is literally buying everything.”
“When the dollar goes valueless, Western capital markets are not going to work. COMEX, gold futures, silver futures, and also LBMA; they’ll be dead.”
“Any loose gold that comes out has got buyers queuing up for it.”
“The war is not over.”

Key Takeaways:
U.S. influence across the Middle East has effectively ended following the failed campaign against Iran and the closure/restriction of Hormuz.
The US dollar faces terminal decline as the world’s reserve currency due to debt, geopolitics, and loss of trust.
China is rapidly building a gold-backed alternative system (vaults in Hong Kong/Saudi Arabia, yuan mechanisms, and more) while dumping dollars.
Central banks are buying gold in record volumes because they understand real money; fiat currencies are losing purchasing power.
Equity markets sit in an enormous leveraged bubble; rising bond yields will likely trigger a sharp correction.
Gold and silver miners may hold up better than the broader market during a crash, with strong underlying demand for physical metal.
The smart move now is protecting wealth with physical gold and silver rather than chasing credit-based assets.

Timestamps:
00:00 – Intro
01:11 – The Core Message: Out of Credit, Into Physical Gold & Silver
02:43 – BRICS Changes, Monroe Doctrine & Shifting Geopolitics
05:58 – Gulf War Consequences, Energy Crisis & Dollar Impact
07:52 – China Dumping Dollars & Stockpiling Real Assets
09:40 – China’s Gold Strategy: Vaults, Refining & Yuan Gold Standard Plans
15:18 – Record Central Bank Gold Buying & Stagnant Supply
18:22 – Why Gold Price Dropped: It’s Fiat Currencies Collapsing
21:49 – Why Central Banks Keep Aggressively Buying Gold
24:48 – Bank of Japan Crisis, Yen Collapse & Debt Trap
28:30 – 1970s Parallels & Why This Fiat Decline Is Terminal
33:24 – No Quick Economic Recovery – Energy & Supply Chain Reality
37:30 – Stock Market Bubble & How It Could Affect Precious Metals
41:12 – Gold & Silver Miners During a Broader Market Crash
43:43 – China Building Alternative to COMEX & LBMA in Hong Kong
45:15 – AI Bubble vs Dot-Com & Equity Valuations
49:16 – Final Takeaway

Let’s start with gold. This week, the price has rallied from a low of $4950 on 30^th June to $4170 this morning. As is the case in silver the July contract and option series on Comex expired this week, an event which usually leads to a sell-off. That pressure on prices has ended.

As the chart above illustrates, it leaves open interest in the gold contract the lowest it has been since the run-up to the December 2015 low of $1050. This tells us that speculators who sell dollars to buy paper gold are even more absent as they were then, which was the springboard for a decade long $4500 dollar rise. In other words, they will buy gold futures, adding potentially 300,000—400,000 contracts to take it back into oversold territory.

This is the outlook that the bears, typically market-makers and bullion banks must now fear.

Indeed, market sentiment is similarly bearish to the 2015—2016 period. But this time

Read more

While politics is always about image, it is particularly so with socialists. They promote themselves as representing the downtrodden masses at the expense of evil capitalists. But it always turns out to be impossible to improve on capitalism, for one simple fact which was exposed in the socialist calculation debate triggered by Ludwig von Mises’s 1920 article pointing out the impossibility of economic calculation in the socialist state.

Mises demonstrated that Marxist dogma about the state owning and distributing the means of production was nonsense, because the economic calculations to make the division of labour work for society’s benefit could only be made by businesses in free markets. The less the intervention from the state, the more effective the economic delivery and progress both become. Socialism travels in the opposite direction.

You only had to compare the free market success of Hong Kong with communist mainland China under Chairman Mao. John Cowperthwaite was instrumental in Hong Kong’s recovery from the economic and monetary ruins left by the Japanese army and is a story well told. He oversaw this recovery by refusing to intervene, kept the state small, and kept taxes low.

Contrast that with China’s misery under Mao which led to an estimated 40 to 70 million deaths attributable to his communist policies. Same ethnic people, just different politics.

The truth about communism, which is simply a severe form of socialism was fully revealed when the Berlin Wall fell, and the corruption in Eastern European states was revealed. Honecker, Jaruzelski, Husak, Kadar, Zhivkov, and Ceausescu — all Warsaw Pact leaders living high on the hog while their populations were suppressed and starved. It is a characteristic of socialism that while it fails, those deemed “more equal than others” become increasingly divorced from economic reality and personally corrupt. Hark! Did someone say Brussels?

Over fifty years ago, there was another King of the North called T. Dan Smith aka Mr Newcastle, leader of that city’s council, who along with bent architect John Poulson and another council leader Andrew Cunningham in nearby County Durham were jailed for corruption. Mini-Honeckers and Ceausescus all of them.

I recall discussing this with an acquaintance back in the seventies. He was in the business of developing car parks in city centres, negotiating with planning departments and Labour councillors all the time. He was clear that the further left a councillor, the easier he was to bribe. His cynical observation appears to be confirmed by the facts.

Imagine you have a social conscious and become a socialist politician. You rapidly find that everything you do suffers from unintended consequences, but lobbyists come to you simply because you have power. Dinners, visits to the races, fact-finding missions and conferences in luxury resorts all paid for, and finally some deals on the side are quietly offered. The chances are your head is turned. The Brussels elite which doesn’t even have to face a plebiscite is a supreme example of a socialist political class which in terms of luxury and indulgence gives the Warsaw Pact leaders a close run for their money.

Burnham and his appointees may or may not succumb to the most obvious forms of bribery, but when things don’t pan out too well, almost certainly he will follow Starmer for the photo opportunities, the dinners, and all the other trappings of NATO, EU, and G7 meetings whose attendees meet to simply reassure themselves of their importance.

Importance abroad offsets impotence at home. Nothing changes, because socialism doesn’t deliver. As Mises correctly observed, there’s no such thing as economic calculation in a socialist state. Formally the most powerful nation in the world, Britain under socialism is now becoming a third world country. It is extraordinary that no one seems to think that the problem is too much government and regulation. Instead, the solution is to double down: more government, more regulation, more taxes, more Burnhams. Any complainer is an enemy of the state and his right to a contrary opinion is vigorously denied.

“In this episode of the MoneyMagpie Invest podcast, Jasmine Birtles is joined by Alasdair Macleod, author of the Macleod Finance Substack, and Nigel Ryan, former tech CEO and retail investor, to discuss why silver may be one of the most distorted markets in the world.

”They discuss China’s dramatic shift in silver buying, the growing gap between paper silver and physical silver, the gold-silver ratio, industrial demand from solar, electronics and AI infrastructure, and why both guests believe fiat currencies are becoming increasingly dangerous stores of value.

”Alasdair argues that gold and silver should be understood as “real money”, while pounds and dollars are credit. Nigel explains why he has personally favoured physical metals over leaving cash in the bank. The episode also covers ETFs, banking risk, inflation, AI stocks, and the possibility of a wider credit-system crisis.”