Here in Australia we have a potential nuclear weapon sitting in the Commonwealth Banking Act of 1959 which is continually amended but has an entire Part (IV) relating to the confiscation of gold by the Reserve Bank of Australia. It's more or less based on Roosevelt's 1933 Executive Order but goes even further, demanding anyone holding more than a nominal proscribed amount of gold immediately transfer it to the RBA.
It only needs a proclamation from the Governor General for that part of the Act to immediately come into force.
Another oddity here is Australian issued sovereigns have been out of circulation since we finally stopped producing them in 1931 although they have never been officially demonetised from being worth a pound.
Today we rely on the Currency Act of 1965 and in its current schedule we still have 22ct gold coins of $200, $100, $50 and $25 and sterling silver coins of $10 as official legal tender, although virtually nobody around today has seen them.
Nevertheless a determination from the Australian Tax Office has been made that all of those precious metals coins issued by the Royal Australia Mint (and subsequently Perth Mint) are subject to capital gains tax and attract GST/VAT, simply because they are not "pure" gold. On the other hand, 999 fine or greater bullion coins do NOT attract GST.
It's even more weird in that in 1966, our first year of decimal currency and before the spot price of silver took off, we had a 50 cent coins in 800 fine silver, but they *have* been removed from the schedule.
Silver is not being valued as money, but as an industrial metal. The expectation is that as the world of credit disintegrates, the gold/silver ratio will come down. More immediately, the price is likely to be driven by bullion shortages.
It will be interesting to read what Alasdair may say.
My 2c is a reset is only being talked about from one curious and extremely blinkered US-centric viewpoint. It would not even necessarily back the dollar, nor really pay off and return the portion of US debt owed to non-US unless the alleged 8000 tons of US gold was sold to those others at the various astronomical dollar prices being discussed. It could make a few non-US nations seem briefly very rich, but most importantly, any reset would destroy all the dollar and gold derivatives out there, destroying the world's financial system.
And many other losses of control would also occur.
Indeed, then anybody who has enough gold could reset it again, and again. And they would have to. Debt-as-money would need to be eradicated.
So it sure seems a very strange place to stand, thinking 'deliberate managed reset'. Surely that's the last thing anybody wants. It would be setting off an uncontrolled demolition. Even if it just happens, a debt collapse, not deliberate reset, it's still the last thing most of the rich want.
Because nuclear-backed threats to collect ALL the gold would have to come from the nuclear powers first for the slightest control to persist.
And even then... there's still silver! And money has been backed briefly with productive land also.
Think it all through... the destruction in a deliberate reset would be immense, and pointless.
I quite agree. People talking of a reset make the mistake of thnking that the state can determine these things, when it is ultimately markets (i.e. the people) which decide.
True… but provoking the collapse of the paper gold system would be an easy way to induce the market to revalue physical gold. No-one knows where the market would reach equilibrium but it would be much higher than at present.
True , but I don't really think that the ' Paper Gold System ' needs overly more provoking from many more entity's than are already monitoring and greasing the wheels to speed along its demise . It's all too apparent for anyone with eyes to see how this has essentially been a blatant ' Ponzi Scheme ' from its inception
I guess it's a US-centric viewpoint because The Fed, being the only central bank still short gold, has dug a deep one-man hole for itself? The other central banks, and the bullion banks, are reportedly all long gold now.
But how many other central banks/treasuries value gold on their balance sheets at USD42/oz?
Maguire seems to think that a re-valuation is inevitable:
The ECB has been 'allocated' 506 tonnes of gold, but many of its nations have much more and some almost none. So at any price, many CBs are not backing their contribution to the Euro with more than the minimal amount of gold they agreed to in 2022. Canada has no gold reserves at all; Australia, where unmined reserves are huge, has a very complicated situation. Same worldwide, CB figures vary wildly even if true.
Concerning the flows of gold said to be caused by tariffs, or by Trump chaos, there are flows but there's no good evidence where they are ending up. If it was in China, i suspect they'd be flown there from London as well as to NY. Maybe the rich in USA are simply becoming stackers. Sure, very interesting details do emerge as paper gold is unwound, but obviously nobody knows the full story.
Hypothecation and paper gold unwinds are key unknowns.
A new gold standard at $1m or $10m /oz wouldnt work any better than the old gold standard did before. The US cant both set interest rates and run the global currency, would still be just as bust and it's bustness would all be realised just as fast. And other consequences would flow if it abandoned money-as-debt. So it's just screwed.
There's a lot of hard sell of gold and silver on Youtube, wild talk of bank holidays and resets. Very little sellside talk. I'm not saying the guy in the video is all wrong, but... his conclusions are uncertain.
More than 170,000 tonnes of above-ground gold exist, CBs have never had more than the US had around 1950 which was i think 50,000 and of course if you and I had 1,000 tonnes here... well, we wouldn't be here. Point surely is nobody ever knows where it all is or is travelling to.
I agree with most of the Goldmoney storyline especially the US debt crisis aspect but there's a lot of missing data about global physical gold, which will never be made clear to us plain folks. We are always going to be the marks at the poker table as the rich exchange their dollars for whatever. That's what we are seeing a part of.
The EU much as NATO must be soon for the waste disposal unit and it's got to be plain enough for all of the member states and their respective CB's to see , so I for sure can't see any of them parting with sizable amounts of the real thing just as the ' Titanic ' that the EU surely is -slides beneath the waves .
Good delivery ' London Bars ' aren't usually shipped directly to China or Hong Kong - the normal modus operandi is to first ship them to refiners in Switzerland where they are re-assayed and re-cast into 1 x Kilo bars as stipulated by the Chinese .
Where do you get / how have you calculated the 2 x figures you've noted
per a new gold Standard with the metal @ $ 1m - $ 10m per ounce ..?? .
Seen a number of mega-high numbers based upon different metrics
but nothing anywhere near your figures ..etc .
Andrew Maguire ( " The Guy in the Video " ) as you so charmingly put it put it is one of the foremost , most expert and most experienced analysts out there , a man who is universally respected all round - so I for one would be highly disinclined to be bet against him in an area like this where he's such a renowned ( and usually unerringly correct ) expert / observer + going by his track record - his conclusions are virtually never " Uncertain " . Think On .
Are you an ' American ' ...?? - it certainly appears so .
Out of my... exact same sort of place the popular $142000 number came from. That number completely pointlessly balances external US debt with gold, as I detailed. Andrew Maguire doesn't have conclusions as much as observations, reflections. The info is so scanty, nobody can infer where physical gold is moving from/to.
Americans, who already have most of the other kind of money, can't tell!
But those are the people who will decide.
And if we were, say, very rich Chinese or German or Thai... why would we store gold in our home in Beijing etc? What about allocation in NYC? Not very charming perhaps, but might be the best place to use it to back family businesses and cartels worldwide during a debt deflation. Assuming some kind of financial system still operates, it sure won't be a legally responsive outfit out of Beijing or Berlin.
We are all gonna be the kind of American with a bank in NY when we get to afford it.
Trump has a very few good points but he and Bessent can't use gold assets to back the dollar, merely - in an possible, very unlikely, extreme - as one monetized asset to delay the debt crisis. It won't be his debt crisis, you see. It's ours.
Any risk of confiscations hinges around those kinds of thoughts, vs. the other risks of what else those guys in Washington could do about the US$ debt trap.
I think that Andrew is correct in his thinking here as a vast number of indicators are all pointing toward this being an inevitability . It's got to happen
To Alasdair and All Subscribers. If you do one thing this weekend, please watch this interview. It’s long but absolutely riveting. FYI i was alerted to it by Dan Denning of Bonner Private Research who now has my undying respect.
Interesting thesis from another substack @ GOLDFIX on what's happening:
View in browser
The GoldFix Gold-Monetization Thesis
The Case for Revaluing Gold, and Retiring US Debt With it
VBL
Feb 13
The GoldFix Gold-Monetization Thesis
“So, yes, buy bonds. Tell the world it is a first step toward the restoration of Hamilton’s sinking fund. Attack the debt. Redeem the paper dollar. Make American finance great again.” - James Grant
The Case for Revaluing Gold, and Retiring US Debt With it
Background: Gold Reset Puzzle Pieces
After reading a section in this week’s very enjoyable Grants IRO, a missing piece of the Gold revaluation puzzle was finally found. Having already opined a Gold reset was happening and saying so as much;¹ one final piece eluded a cohesive theory on it.
The missing puzzle-piece in question was: How would this gold revaluation be catalyzed and cemented without damaging the USD/Bond markets? A signpost of some sort would be needed to this effect as well.
As it turns out, that signpost may have already been given during President Trump’s Sovereign Wealth Fund (SWF) announcement. Trump’s Executive Order for creating a SWF in combination with the aforementioned Grant’s story obliged us with a solid answer as to how gold would be reset and to what purpose that revaluation would serve. First, here is a clip from Trump’s SWF signing courtesy Chris Marcus at Arcadia Economics:
Scott Bessent’s Comments May Hold the Key to Gold’s Revaluation…
Taking what Bessent said in the clip above and putting it in context with Grant’s analysis explaining a gold revaluation could be done in combination with monetization for debt retirement; and it all made sense.
As a result, Bessent’s seemingly obscure statement describing what the US could monetize (Gold)— as opposed to what we would buy (Tik-Tok?)— made perfect sense.
Bottom Line: Trump’s Sovereign Wealth Fund could be used similarly to a Sinking fund. The rest was easy.
Here then, is an opinion on how Gold’s price will be reset, its value monetized, and it’s risk to disrupt King Dollar mitigated².
HOW GOLD WILL BE MONETIZED
Revalue Gold >> Borrow 800BN at 0% >> Buy 5% US Debt
1. Mark Gold to a more realistic price- Reset the Gold
2. Borrow against the Reset price- Monetize the Gold
3. Retire US Debt with the difference- Reduce the Debt
Gold has always been tied to Bonds for true finance people. This is the way to re-express that tie without demanding either asset. Bet on ourselves. The world will follow³
SWF: AS BOND RETIREMENT FUND
On the day Trump initiated a Sovereign Wealth Fund (SWF) process, Scott Bessent made it clear he wishes to monetize US Assets
"We're Going To Monetize The Asset Side Of The US Balance Sheet"
Very good Alasdair. You're getting there. More and more people are catching on to the fact they're being shafted by the banks and are going for the physical metal. Keep going 👍
Great piece Alasdair.
Here in Australia we have a potential nuclear weapon sitting in the Commonwealth Banking Act of 1959 which is continually amended but has an entire Part (IV) relating to the confiscation of gold by the Reserve Bank of Australia. It's more or less based on Roosevelt's 1933 Executive Order but goes even further, demanding anyone holding more than a nominal proscribed amount of gold immediately transfer it to the RBA.
It only needs a proclamation from the Governor General for that part of the Act to immediately come into force.
Another oddity here is Australian issued sovereigns have been out of circulation since we finally stopped producing them in 1931 although they have never been officially demonetised from being worth a pound.
Today we rely on the Currency Act of 1965 and in its current schedule we still have 22ct gold coins of $200, $100, $50 and $25 and sterling silver coins of $10 as official legal tender, although virtually nobody around today has seen them.
Nevertheless a determination from the Australian Tax Office has been made that all of those precious metals coins issued by the Royal Australia Mint (and subsequently Perth Mint) are subject to capital gains tax and attract GST/VAT, simply because they are not "pure" gold. On the other hand, 999 fine or greater bullion coins do NOT attract GST.
It's even more weird in that in 1966, our first year of decimal currency and before the spot price of silver took off, we had a 50 cent coins in 800 fine silver, but they *have* been removed from the schedule.
Thanks for the information Andy. Always appreciate hearing what’s happening in other countries with respect to their governments policies.
Thank you, Alasdair.
James Turk's "King World News" interview this week was interesting.
Is silver underperforming because insiders are expecting a gold re-valuation?
What would silver be expected to do if gold were re-valued, please?
"Is The World About To Witness A Shocking Gold Revaluation?"
https://kingworldnews.com/is-the-world-about-to-witness-a-shocking-gold-revaluation/
Silver is not being valued as money, but as an industrial metal. The expectation is that as the world of credit disintegrates, the gold/silver ratio will come down. More immediately, the price is likely to be driven by bullion shortages.
Thanks again, Alasdair.
It will be interesting to read what Alasdair may say.
My 2c is a reset is only being talked about from one curious and extremely blinkered US-centric viewpoint. It would not even necessarily back the dollar, nor really pay off and return the portion of US debt owed to non-US unless the alleged 8000 tons of US gold was sold to those others at the various astronomical dollar prices being discussed. It could make a few non-US nations seem briefly very rich, but most importantly, any reset would destroy all the dollar and gold derivatives out there, destroying the world's financial system.
And many other losses of control would also occur.
Indeed, then anybody who has enough gold could reset it again, and again. And they would have to. Debt-as-money would need to be eradicated.
So it sure seems a very strange place to stand, thinking 'deliberate managed reset'. Surely that's the last thing anybody wants. It would be setting off an uncontrolled demolition. Even if it just happens, a debt collapse, not deliberate reset, it's still the last thing most of the rich want.
Because nuclear-backed threats to collect ALL the gold would have to come from the nuclear powers first for the slightest control to persist.
And even then... there's still silver! And money has been backed briefly with productive land also.
Think it all through... the destruction in a deliberate reset would be immense, and pointless.
I quite agree. People talking of a reset make the mistake of thnking that the state can determine these things, when it is ultimately markets (i.e. the people) which decide.
True… but provoking the collapse of the paper gold system would be an easy way to induce the market to revalue physical gold. No-one knows where the market would reach equilibrium but it would be much higher than at present.
True , but I don't really think that the ' Paper Gold System ' needs overly more provoking from many more entity's than are already monitoring and greasing the wheels to speed along its demise . It's all too apparent for anyone with eyes to see how this has essentially been a blatant ' Ponzi Scheme ' from its inception
I guess it's a US-centric viewpoint because The Fed, being the only central bank still short gold, has dug a deep one-man hole for itself? The other central banks, and the bullion banks, are reportedly all long gold now.
But how many other central banks/treasuries value gold on their balance sheets at USD42/oz?
Maguire seems to think that a re-valuation is inevitable:
https://www.youtube.com/watch?v=wboYdkk84cM&t=13s
I watched that video.
The ECB has been 'allocated' 506 tonnes of gold, but many of its nations have much more and some almost none. So at any price, many CBs are not backing their contribution to the Euro with more than the minimal amount of gold they agreed to in 2022. Canada has no gold reserves at all; Australia, where unmined reserves are huge, has a very complicated situation. Same worldwide, CB figures vary wildly even if true.
Concerning the flows of gold said to be caused by tariffs, or by Trump chaos, there are flows but there's no good evidence where they are ending up. If it was in China, i suspect they'd be flown there from London as well as to NY. Maybe the rich in USA are simply becoming stackers. Sure, very interesting details do emerge as paper gold is unwound, but obviously nobody knows the full story.
Hypothecation and paper gold unwinds are key unknowns.
A new gold standard at $1m or $10m /oz wouldnt work any better than the old gold standard did before. The US cant both set interest rates and run the global currency, would still be just as bust and it's bustness would all be realised just as fast. And other consequences would flow if it abandoned money-as-debt. So it's just screwed.
There's a lot of hard sell of gold and silver on Youtube, wild talk of bank holidays and resets. Very little sellside talk. I'm not saying the guy in the video is all wrong, but... his conclusions are uncertain.
More than 170,000 tonnes of above-ground gold exist, CBs have never had more than the US had around 1950 which was i think 50,000 and of course if you and I had 1,000 tonnes here... well, we wouldn't be here. Point surely is nobody ever knows where it all is or is travelling to.
I agree with most of the Goldmoney storyline especially the US debt crisis aspect but there's a lot of missing data about global physical gold, which will never be made clear to us plain folks. We are always going to be the marks at the poker table as the rich exchange their dollars for whatever. That's what we are seeing a part of.
The EU much as NATO must be soon for the waste disposal unit and it's got to be plain enough for all of the member states and their respective CB's to see , so I for sure can't see any of them parting with sizable amounts of the real thing just as the ' Titanic ' that the EU surely is -slides beneath the waves .
Good delivery ' London Bars ' aren't usually shipped directly to China or Hong Kong - the normal modus operandi is to first ship them to refiners in Switzerland where they are re-assayed and re-cast into 1 x Kilo bars as stipulated by the Chinese .
Where do you get / how have you calculated the 2 x figures you've noted
per a new gold Standard with the metal @ $ 1m - $ 10m per ounce ..?? .
Seen a number of mega-high numbers based upon different metrics
but nothing anywhere near your figures ..etc .
Andrew Maguire ( " The Guy in the Video " ) as you so charmingly put it put it is one of the foremost , most expert and most experienced analysts out there , a man who is universally respected all round - so I for one would be highly disinclined to be bet against him in an area like this where he's such a renowned ( and usually unerringly correct ) expert / observer + going by his track record - his conclusions are virtually never " Uncertain " . Think On .
Are you an ' American ' ...?? - it certainly appears so .
Out of my... exact same sort of place the popular $142000 number came from. That number completely pointlessly balances external US debt with gold, as I detailed. Andrew Maguire doesn't have conclusions as much as observations, reflections. The info is so scanty, nobody can infer where physical gold is moving from/to.
Americans, who already have most of the other kind of money, can't tell!
But those are the people who will decide.
And if we were, say, very rich Chinese or German or Thai... why would we store gold in our home in Beijing etc? What about allocation in NYC? Not very charming perhaps, but might be the best place to use it to back family businesses and cartels worldwide during a debt deflation. Assuming some kind of financial system still operates, it sure won't be a legally responsive outfit out of Beijing or Berlin.
We are all gonna be the kind of American with a bank in NY when we get to afford it.
Trump has a very few good points but he and Bessent can't use gold assets to back the dollar, merely - in an possible, very unlikely, extreme - as one monetized asset to delay the debt crisis. It won't be his debt crisis, you see. It's ours.
Any risk of confiscations hinges around those kinds of thoughts, vs. the other risks of what else those guys in Washington could do about the US$ debt trap.
Thank you. Interesting times!
I think that Andrew is correct in his thinking here as a vast number of indicators are all pointing toward this being an inevitability . It's got to happen
To Alasdair and All Subscribers. If you do one thing this weekend, please watch this interview. It’s long but absolutely riveting. FYI i was alerted to it by Dan Denning of Bonner Private Research who now has my undying respect.
Enjoy https://www.youtube.com/watch?v=VRrDCJ-U_Vg
Interesting thesis from another substack @ GOLDFIX on what's happening:
View in browser
The GoldFix Gold-Monetization Thesis
The Case for Revaluing Gold, and Retiring US Debt With it
VBL
Feb 13
The GoldFix Gold-Monetization Thesis
“So, yes, buy bonds. Tell the world it is a first step toward the restoration of Hamilton’s sinking fund. Attack the debt. Redeem the paper dollar. Make American finance great again.” - James Grant
The Case for Revaluing Gold, and Retiring US Debt With it
Background: Gold Reset Puzzle Pieces
After reading a section in this week’s very enjoyable Grants IRO, a missing piece of the Gold revaluation puzzle was finally found. Having already opined a Gold reset was happening and saying so as much;¹ one final piece eluded a cohesive theory on it.
The missing puzzle-piece in question was: How would this gold revaluation be catalyzed and cemented without damaging the USD/Bond markets? A signpost of some sort would be needed to this effect as well.
As it turns out, that signpost may have already been given during President Trump’s Sovereign Wealth Fund (SWF) announcement. Trump’s Executive Order for creating a SWF in combination with the aforementioned Grant’s story obliged us with a solid answer as to how gold would be reset and to what purpose that revaluation would serve. First, here is a clip from Trump’s SWF signing courtesy Chris Marcus at Arcadia Economics:
Scott Bessent’s Comments May Hold the Key to Gold’s Revaluation…
Taking what Bessent said in the clip above and putting it in context with Grant’s analysis explaining a gold revaluation could be done in combination with monetization for debt retirement; and it all made sense.
As a result, Bessent’s seemingly obscure statement describing what the US could monetize (Gold)— as opposed to what we would buy (Tik-Tok?)— made perfect sense.
Bottom Line: Trump’s Sovereign Wealth Fund could be used similarly to a Sinking fund. The rest was easy.
Here then, is an opinion on how Gold’s price will be reset, its value monetized, and it’s risk to disrupt King Dollar mitigated².
HOW GOLD WILL BE MONETIZED
Revalue Gold >> Borrow 800BN at 0% >> Buy 5% US Debt
1. Mark Gold to a more realistic price- Reset the Gold
2. Borrow against the Reset price- Monetize the Gold
3. Retire US Debt with the difference- Reduce the Debt
Gold has always been tied to Bonds for true finance people. This is the way to re-express that tie without demanding either asset. Bet on ourselves. The world will follow³
SWF: AS BOND RETIREMENT FUND
On the day Trump initiated a Sovereign Wealth Fund (SWF) process, Scott Bessent made it clear he wishes to monetize US Assets
"We're Going To Monetize The Asset Side Of The US Balance Sheet"
Very good Alasdair. You're getting there. More and more people are catching on to the fact they're being shafted by the banks and are going for the physical metal. Keep going 👍
Really? Britain wouln't do that sort of thing? America is corrupt, to that I agree. And so is Britain.
America is not holding Venezuela's gold and refusing to give it back Britain is.
The gold is stored at the Bank of England who refuse to return it.
https://www.reuters.com/world/britains-high-court-rules-against-venezuelas-maduro-latest-gold-battle-2022-07-29/
Thank you Alasdair.