Gold Is the Ultimate Safe Haven (Uncut) 03-31-2025

Gold Is the Ultimate Safe Haven in the Coming Currency Turmoil. Treasuries Will Offer no Safety.

Gold is going to outperform and it’s going to leave treasuries in the dust. And the problem with treasuries is that there is counterparty risk. It’s the U.S. government.

And there have been many governments in the past, including the U.S. government, who have defaulted. It’s a myth to say that the U.S. government will never default. Because I can give you two examples in the last, let’s say, 100 plus years.

Monday, March 31st, 2025. Monecco 64. Humboldt alternative economics.

And contrarian views. So it has been a very interesting start so far to the week. All the trends from late last week are continuing.

But what I want to look at today is where’s the ultimate safe haven? And there are many out there, for example, on X or Twitter, who are very good analysts, but who still see treasuries as the ultimate safe haven. And that gold is going to correct in the current environment. And what’s the current environment? Well, yes, the most obvious one are the tariffs.

Trump’s bellicose statements towards other countries. Iran being one example. Yes, even against allies as well.

Not just a kinetic war, maybe against Iran, but all the trade and tariff wars against other countries. But yeah, I think those are the obvious reasons. The underlying fundamental reason is that you reach a point in a credit bubble.

And the credit bubble we’ve had since 1980 is culminating here, in my opinion. And it’s been the biggest one ever in the recorded history of our planet, in my opinion. We’ve just printed and printed so much money out of thin air.

We’ve kept interest rates artificially low for so long. And we’ve got a huge amount of debt. And a lot of the values we see are mythical or ephemeral values, not real values.

And by we, of course, I mean the central bankers and the people who run things, the governments. I’m not blaming you, of course. So yeah, that’s what we’re going to quickly look at today.

And I’ll prove it to you right now that the place to be is gold and silver as well, for that matter. So before I go further, I just want to give a shout out to Dirty Men Safe. It’s hidden protection.

I’ve been affiliated with them for a couple of years. If you want to find out more about Dirty Men Safe, there’s a link below in the description. And someone asked a week or so ago in the comment section, are they going to make bigger safes? And I asked Howard, who runs Dirty Men Safe.

He said they are working on a bigger safe. So there you go. You get 10% off if you use my link below in the description.

And I think they send you a special present as well if you were to buy one. Anyway, yeah, there’s loads of factors that are affecting the markets. The obvious one, of course, is the disruption and the uncertainty surrounding everything when it concerns the Trump administration.

And here I’m not criticizing anything. It’s just that it’s very disruptive. Some of it makes sense.

Some of it doesn’t. But there’s also things like bond yields. Yes, they have come off a little bit.

But in Japan, they’re going up like crazy. And even though they’re down today, I’ve covered in the past and I have a playlist about the Japanese yen carry trade, excuse me, and how disruptive it can be for the whole financial world’s financial sector. And that’s because the stronger the yen gets and the higher their yields go, the worse it is for the carry trade.

Carry trade, people borrow in yen. But if the yen is getting more expensive and Japanese government bonds are falling in value, they have to cover it. And then sell the assets that they used when they… well, the assets they bought when they borrowed in yen.

And it’s a whole can of worms. Yes, last year, there was kind of a crisis surrounding that. But now it looks like it’s coming back.

So it’s not just the tariffs. It’s also the yen carry trade. And that will put pressure as well on the stock market in Japan and stock markets around the world.

The Nikkei 225 dropped almost 4% today. 1,400 points settled at 35,685. Yeah, I think, yeah, last year, we saw some huge drops in the Nikkei.

I think there was a 10% drop in one day because of this. Back to the topic of what’s the ultimate safe haven. And I saw this comment by Michael A. Gayet, he’s a CFA.

And I follow him and he talks a lot of sense a lot of times. But this I had to disagree with him. He posted here and he said, gold was sending a warning all along and gold is next to collapse.

Treasuries will stand alone. Well, I think he’s got it backwards. And I don’t want to be critical.

He’s entitled to his opinion. But I have to say, I totally disagree with that. As you can see, I replied.

I said, you mean gold will stand alone? Treasuries are collapsing too if you measure them in terms of money or gold. And before I show you a chart here, I just want to show you John Exeter’s inverted pyramid of liquidity. And John Exeter, he was a top central banker back in the 40s, 50s, all the way to the 60s, I would say.

He worked for the New York Fed. He hoped to create and found the Central Bank of Sri Lanka and the Philippines. And he was a gold bug.

It’s one of the central bankers I admire. And I think he died in 06. And by then, I was already following John Exeter.

And he wrote some interesting articles, especially one in 1972 about how the dollar became an IOU nothing after Nixon suspended the convertibility of the dollar temporarily into gold. And John Exeter was actually involved in advising the Nixon administration, the Treasury Department. And he said they could do two things in 1971.

They could have raised rates and stopped the gold outflow, or they could have defaulted. Unfortunately, they chose to default. Politicians never want to raise rates, do they? So his inverted pyramid of liquidity shows in a collapse, market collapse, if you want to call it.

All the liquidity flows to the bottom. And what’s at the bottom, according to John Exeter? Well, it’s gold. And you can add silver to that as well, I would say.

Yes, a lot of money will rush to government bonds and Treasury bills and even paper money. But the ultimate destination is real money, gold. And I can prove it to you right now that that’s happening already in terms of the relative flow towards the bottom of the pyramid.

And I can understand why people like Michael Gaiet thinks that Treasuries are the ultimate place to be, because a lot of people don’t understand that gold is money, and maybe he doesn’t. Treasuries, be it bills, notes and bonds, depending on the maturity, they’re just the fiat dollar being traded forward in time. So if the dollar is imploding, if everything is imploding, why would you want to hold on to Treasuries? But I can understand that it’s the most liquid market out there.

And when you’re getting out of the stuff above, you know, at the top of the liquidity inverted pyramid, you go to Treasuries and bills because it’s much easier than people always think it’s difficult to buy physical gold, even though it isn’t. So here you go. I’ve done a chart here of gold versus the 10-year note future, and it’s a constant maturity future.

So it’s always a 10-year because sometimes with the time, the futures contract becomes less than 10 years. So we’ve got a good picture here that since the early 2000s, since the beginning of this century, gold has been outperforming. Yes, from 2011 up until early last year, there had been a consolidation, but now it’s broken out and it’s very similar to the gold chart in cash dollars, right? This is forward cash, if you want to call it.

And as you can see, it’s a monthly chart when we’re making all-time highs, gold versus the 10-year. So yes, the 10-year might go up in value. There will be flows to 10 years, but I think gold is going to outperform and it’s going to leave treasuries in the dust.

And the problem with treasuries is that there is counterparty risk. It’s the US government. And there have been many governments in the past, including the US government, who have defaulted.

It’s a myth to say that the US government will never default because I can give you two examples in the last, let’s say, 100 plus years. So the first one was in 1933 when it defaulted on the Liberty Bonds, which were issued in 1918 to pay for Uncle Sam and his World War I involvement. And it was a gold-backed bond.

It was recallable, I think, in 1933. And yes, it was, I think, a 20-year bond that was going to mature in 1938. So what happened? How was the default? Well, Roosevelt banned gold from any contract.

He banned people from owning gold, monetary gold, and those Liberty Bonds, which were supposed to be the patriotic thing to do, they got paid in paper, not gold. So that was a default there from the US government. And then you have the biggest default of them all.

It was August 15, 1971, because every country in the Bretton Woods system that were holding currency, dollar currency, they were supposed to be able to redeem that or get payment in gold at $35 per troy ounce. And that has been suspended. So the US is technically in default.

So ultimately, yes, there is huge counterparty risk in treasuries. With gold, there isn’t. And you’re holding your gold, or you have it in a safe, private, protected vault as well.

Of course, you need to do your homework about that. In the US, of course, I’m affiliated with Miles Franklin and Andy Schechtman. They do that kind of service.

If you want to find out more, there’s details below in the description. And here in the UK, you can contact Gold Investments. They’ve been in business since 1981.

And I can vouch for them. And they provide vaulting service, private vaulting service. It’s not within the banking system.

So I’m sorry to say, Mr. Gaillet, or I’m not sure how you pronounce your name, but I think you’re going to be proven wrong. And the last man standing will be gold and silver as well. Silver is a little bit more volatile, but gold will provide stable store of value.

And it will be there when everything else fails. And so will silver, of course. But silver is more of a day-to-day transaction or bartering instrument.

That holds its value as well. So let’s quickly look at the markets this morning. Because yes, spot gold has broken through 3100, which, yeah, it’s a big thing.

And I think it’s accelerating. And I’ve shown you that chart, that long-term chart of gold going back to the 70s. And I’ll show it to you again here now.

And why I think there’s still a long way to go. It’s unfortunate for everyone who’s holding government bonds. Everyone who has a lot of deposits in the bank, no matter in which currency it is.

Because what we’re seeing here is the beginnings of a currency collapse or hyperinflation, in my opinion. And yes, you can get hyperinflation of the currency and collapse of the markets, I think. It feels like that.

And I’ve been warning, of course, about hyperinflation for many years. I even have a playlist, which I’ll put up here. But yeah, as I said, it’s not just the dollar that’s collapsing.

Look at the British pound this morning. It’s at 24.06, highest I’ve ever seen. Right now, spot gold, and it’s 8.02 a.m. London.

Spot gold is 31.22. It’s up 36 bucks, 1.2%. High’s been 28, low 76. Spot silver, that’s up 26 cents. It’s underperforming gold a little bit, but the stock markets are down.

So actually, that in and of itself is positive for silver. We’re at 34.38. The Dow is down 200 points. NASDAQ 100 is down about 250 or 1.2%. And the S&P is down about 43.

The dollar is quite weak versus the yen. It’s down about half a percent. And that’s that unwinding of the carry trade.

Against the other currencies, it’s pretty steady. Not much to write home about. The 10-year, sorry, the oil price, WTI crude, it’s down a third, just below 69.

High-grade copper is down slightly, but still way above 5. It’s at 513, down 0.4 of a percent. And yes, the 10-year yield is down 7 basis points, which means the price is up. But as I said, don’t be fooled.

Treasuries are not a safe haven. It’s the worst place to be, treasuries. It might be temporarily a good place for a fund manager with billions managing to park some funds.

But if I were a fund manager, I would be looking to get a lot of physical gold and silver outside the system. But of course, a lot of fund managers, pension funds, because of the rules and regulations, they’re not allowed to hold physical gold. Can you believe that? Isn’t that crazy? And that’s why I think, unfortunately, for many people out there who think they’ve got a nice pension coming to them, they’re going to be, it’s not going to be a nice surprise.

It’s going to be pretty bad. So there’s still time, in my opinion, to get out of Dodge, i.e. to jump off the Titanic, to go into the lifeboat. And the lifeboats, of course, are any assets that are tangible in the monetary sense, especially gold and silver.

I don’t think there’s any reason to be scared unless you don’t really know what’s going on. And hopefully, I’ve been able to explain to you what’s been going on these last few years. And you be prepared and you have peace of mind.

But I feel sorry for a lot of people out there who have no clue what’s going on. And it’s going to hit them like a train, like they turn around and they hadn’t seen it. Anyway, with that, I’d like to wish you all a very good day and a great start to the coming week.

Take care. Bye.