Gold, US Dollar, and CBDCs: The Next Currency War Is Bigger Than You Think
I want to begin this panel a bit uh different I’m G to I’m going to start with you Frank and um you know the conversation here is I called it the future of currency Wars but we’re going to be looking at uh the strength of the US dollar from a global standpoint US dollar versus non US dollar Trade A lot of these conversations have been surfacing and surging in the last couple of years and so but it’s very complex and there’s a lot of hyperbole in conversations like this because often it’s tied to things like the decline of
the US Empire and all of this so I want to bring some realism to it um Frank if you could for me um outline uh just give us some context paint the picture for us right now US dollar strength globally and trajectory well um there’s a shift taking place it’s actually a tectonic shift and it’s most people are oblivious to the fact that it’s happening and there was a lot of denial um by Americans in general that this was even possible but it’s it’s certainly gaining momentum now and the the shift is that there’s a move away from the
dollar okay as a trading currency also as a reserve currency for central banks but I think the more profound change is happening in the trading where a lot of the world since the Ukraine war started and the sanctions were imposed on Russia and the and that the money was frozen Russia’s money was frozen a lot of countries around the world almost everybody outside the G7 is trying to find mechanisms by which to trade outside the US dollar system and we could go into the many mechanisms that are currently working but the most
common is bilateral trade agreements using just local currencies that’s that’s sort of going to be the near-term mechanism until some something happens and I I predict we’re going to get a global monetary system reset at some point okay and the US dollar will lose a lot of its status it may not lose entirely its reserved status but it will have very major competition from non-dollar systems now just real quick I asked this question this morning I’d love to ask it one more time if this is your first time
at one of my events would you mind just giving me a wave okay I love seeing you guys here so I I just want to take nothing for granted uh in in terms of this conversation so my next question therefore maybe Andy I’ll pass it to you just to move down the line if you could differentiate for me the difference between as Frank mentioned the Reserve currency and the trade currency and then we’re going to start pulling on some threads yeah you know in terms of for example everyone focuses on the bricks
and their their desire to have a a new world Reserve currency but what they’re really talking about is a settlement currency at least for now and a settlement currency would be something to be used in trade in terms of Reserve typically the reserve would be in the in the form of us treasuries which have been weaponized as as Frank was saying to a degree where people and governments around the world have really no desire left to hold us treasuries not only because they’ve performed poorly over the last year and a half but because
they’ve been weaponized and and countries feel well if they can do it to them they’ll do it to us and and to Frank’s Point that’s exactly what they’ve been doing is building a network of trading with one another in local currencies and by default if you look at gold and compare it to the 10-year treasury over the past 25 years gold has doubled its performance but has no counterparty risk and it’s universally accepted as wealth so there is a good percentage of of the world that is now usurping the addition or the
accumulation of us treasuries for gold but settling in local currencies now I would argue there is a strong possibility we will see a common settlement currency in fact they’ve already called it the unit and and the head of the bricks new development Bank Del maruso the former president of Brazil has said as such and we can talk about mbridge and what happened with the bis and how they pulled out at the last minute it’s almost out of a James Bond movie it’s Espionage as far as I’m concerned and it might be further along
if it weren’t for that but I can assure you this that the resolve of the global south of the brics Nations to continue to find a settlement currency outside the dollar whether it be gold whether it be a an agreed upon settlement currency whatever it will be it will have a dramatic effect on the US Dollar’s not only settlement status but ultimately also its Reserve status I have to pull on that thread Andy if You’ walk us through the mbridge scenario uh and and walk us through the James Bond picture for me
so the bricks uh Innovation Hub excuse me the uh bis Innovation Hub along with the founders of of embri Technology China Hong Kong Thailand United Arab Emirates for four years they’ve been developing it developing it along with the the bis Innovation Hub last year Saudi Arabia signed on as the fifth full participant of embridge this is a big deal the world’s largest producer of oil is now saying we want to be part of emridge Del maruso said we will trade the brics unit currency which is deliverable upon request to the central
banks over embridge called the unit all of this was great they have the meeting in Kazan and at the 12th hour Augustus Carston’s the head of the bis who resembles a gustus from willly Wonka only grown up he says oh well we can’t be part of any of any program where perhaps one of the members is being sanctioned by the West this is a guy who just more or less said we just realized that Russia is the RN bricks after 4 years pulled the plug we can’t be part of it so now it’s going from embridge to the bridge and it will crystallize the
resolve uh and and I think ultimately incentivize other countries to join on you can’t trust the West you can’t trust the bis we have to go this alone and and you listen to a guy like Jim Rickards talk about they have a largest swth of population of GDP of military might of on sea and and on land trade routes and the world’s commodity production not to mention China being the manufacturing Hub of the world all of that stuff is something that I think the biggest mistake of many people is to underestimate the significance of it
what would be the the the accuracy versus the inaccuracy of comparing embridge to the alternative Swift system for somebody who hasn’t been following that that thread the units is the The Exchange it’s a blockchain embridge is a blockch it’s a crossb but it’s it’s closer to like xrp than it is to the Swift system that’s controlled by by the United States but it’s built to be the competitor 100% it’s built to to allow all of these countries to trade Central Bank digital currencies amongst one another with complete without any
interference whatsoever from the Swift system and it’s operational it is working they’ve already made trades where uh China has purchased both oil and gold from the United barab Emirates over embridge it is operational yeah okay and so to summarize you know Banning Russia from the Swift system provided the incentive for the brics Nations to get together and build an alternative that is embridge effectively a swift equivalent outside the realm of the US dollar protected from sanctions decentralized yes 100% okay okay Grant I
want to throw it over to you and uh I just want you to jump in on what you’ve heard thus far where you think the important threads are when people talk about the concept of d polarization and countries migrating away from US dollar trade distinct between distinct for me between the noise and the signal what what’s important to you um well I think there’s one other really important piece of context here particularly for people that are here for the first time and that is um the origins of the Petro
dollar and why the dollar is the world’s reserved currency and the connection to oil because this again I I talk this morning about how much change is happening um you know underneath all of this is are the energy markets and the energy markets are changing as well so um a quick history lesson I don’t want to bore anybody that knows this but I’ll run through it quickly back in the early 1970s guy called Bill Simon went to Saudi Arabia um and made a deal with the Arabs and saying we will we will uh give
you all the weapons you need and we will be the big brother backing you up because you live in a rough neighborhood and in return you will only sell your oil for us period you won’t accept any other currencies for it and that deal was made and it’s such an important deal deal to understand because what it meant is that every country in the world that either Imports or exports oil which is every country on the face of the planet has to hold US dollars in reserve to pay either pay for their energy or receive
in exchange for their energy and that was where the bid for us treasuries came from every country in the world a central bank would hold their reserves in dollars and they would convert that into us treasuries to hold it um that has lasted for a very very long time and it’s why this Swift thing is so important that made the dollar the primary Reserve currency in the world because everybody had energy need to hold it that enabled the US to run up massive deficit it enabled the US to print dollars at will
uh for things like QE it’s enabled the whole financial system to work now several times in history countries like Libya for example have said that they were going to accept us accept Euros for their oil instead of US Dollars and uh we ended up with Mr Gaddafi ending up not being the leader of Libya we’ve seen Iran Iraq talk about this in the past this requirement of every country on Earth To Hold Us dollar reserves has been crucial now we’re seeing this change and the weaponization of the Swift system uh if you take a currency
that everybody has to hold and you say to all those central banks there is a circumstance or a set of circumstances under which we will confiscate your reserves you now make sure this is not an option for everybody they now have to come up with a plan to diversify themselves away from a complete Independence on the dollar that was perfectly fine while the US was benign and did not weaponize the dollar you hear this phrase that Andy used their weaponized dollar the world has changed the energy markets have changed the US
is now a massive exporter of oil not an importer of oil so that means that the Saudis now have to find other buyers for their oil which used to go to the United States that’s their impetus and their um The Catalyst for them not wanting to be behold to the US dollar anymore so wherever you look whether people are saying look US dollar trade is still the same US dollar Treasures are still the same the rules have changed now you no longer have to have US dollars in fact you now longer now you now have to have
a plan to not rely on US Dollars and I think Jay it’s really important because as you know Charlie Munga famously said show me the incentives and I’ll show you the outcomes yeah the incentives have changed dramatically now and that puts a stop clock on the use of the dollar and whether it goes away today or tomorrow or next week or just incrementally gets chipped away this has changed because every dollar that one country no longer needs to hold is a dollar that the US has to find a buyer for and those buyers
are getting fewer and farther between so it’s a massive change you’re not going to see it on a daily basis but it’s a huge change yeah Frank you’re nodding along here I want to pass it to you next I I agree with everything that’s being said but um what what people have to understand that the the the US is quickly realizing this is this is a national security issue uh I I would argue that the reserve currency status is as important as their military if they ever lose their Reserve currency status they lose control over the Global
Financial system it’s as simple as that and they benefited greatly over the last 50 years um oh actually since World War II by having the the the reserve currency so there there’s going to be a reaction to this this is not going to happen without a I would say very aggressive and perhaps a violent reaction by America Trump has already threatened 100% tariffs on any country that contemplates uh dollariz and I think that’s to me it’s a sign of desperation and I think it will backfire it’s only going to accelerate the dollarization
movement um you know it’s like if you can easily bully one kid in the back of the schoolyard but if there’s 50 kids lined up behind them right you’re going to think twice and this is the power this is the beauty of the bricks and it’s and as you know the bricks is now 11 members and it’s growing there’s number like 40 40 applicants that want to join the bricks um and that strength will allow them to have the courage which they’ve never had to actually move away from the dollar but the US will react and it’ll be with sticks and
carrots the sticks will be you know we’ll take away your security guarantees you know countries like Saudi Arabia um we’ll you know exclude you from the G7 markets they can use all sorts of threats so I think but I don’t think that’s going to stop anything this this movement is well on its way and there are very good reasons for it you you know a third of the countries in the world are under us sanctions 60% of the poorest countries in the world under us us sanctions you know everybody wants to
escape from this US dollar prison they’ve been in forever and so you can’t blame them you know you know the US has weaponized the dollar increasingly and it’s now it’s it’s it’s payback time and so you know that’s an interesting perspective when you hear the incoming presidents make those threats we’re going to implement 100% tariffs on any countries that dollarize and you have to put yourself in the shoes of the country hearing that message and you could say well that sounds terrifying I also know
that he’s going to be gone in four years right and how much you think that plays into the incentive of these these countries uh moving away instead of towards the United States when these threats are uttered Grant I’ll pass it over to you yeah look I think I think those threats might work in the short term I there’ll be people that tomorrow don’t want to be under those kind of uh tariffs so it might work in the short term but as Frank makes the point there the more people there are lined up ahead
the more people that are working to find ways to trade bilaterally and the more ways all these countries are reimagining and redesigning their trade deals and so you know let’s take China for example the the Chinese Auto industry right Trump’s talking about putting 100% tariffs on Chinese cars coming across they will still be cheaper and better than American made cars I mean literally you you some look at some of these Chinese cars are coming out they’re extraordinary and they are a third of the price of the US equivalent so you’re
going to have to start putting two 300% tariffs on these Goods to make them too expensive for Americans to buy so America has an incredibly powerful place in the world we all understand that but that power is historical and while it still holds true what Frank said there is is so important to understand everybody’s incentivized to find an alternative now and they’re incentivized to come together and find a collective alternative and once they get that once they get that Collective alternative in
place and they start using it even incrementally you watch how quickly when people realize there is a viable alternative use of the dollar starts to fall so a perspective I heard on this stage a ton last year and I’ve heard a couple cple times today not nearly as much was that so much of this you know non US dollar activity and in combination actually so much of the global conflicts that have erupted have been in response to a weak us leader and a strong us leader has the ability to reverse those
courses is that the case Andy you start with you no I don’t think so not at all I mean to a degree as Grant is saying yes maybe in the short term but what he’s doing is not impos opposing tariffs these are sanctions masquerading as tariffs he pissing off the world uh and and I I think if anything it’s solidifies the these these countries the 11 represent as I was saying a larger portion of human population of GDP you add the Belt Road initiative into it you have 75% of human population and a a growing course of countries that
represent the majority of all of the commodity production the transportation they have the Red Sea covered right now in The Straits of horo you’re talking about on sea onland uh military might um it’s growing and it and they’re finding strength in numbers and I think it would be far better to extend the Olive Branch with strength but to extend the Olive Branch instead of continuing down the road of of threats which will only as far as I’m concerned just like the bis did it will not Inspire trust and
confidence in the Western system clinging to the end to the last vestages of of of this system of this cycle of the kenian experiment of of of a system that has been mismanaged where’re we’re we’re 36 almost 37 trillion in debt that doesn’t take into account Medicare and Medicaid and Social Security and government military pensions were 200 trillion in debt a trillion seconds ago as I said this morning 31,6 188 years ago at were broke uh were aggressive and we should be going the other direction so no I in
fact it might even have the opposite effect and it may infect in fact incentivize these countries to do it more maybe just not be very open about it and if we look at at at China and Saudi Arabia their import numbers in Gold oh yeah you’re right we have been importing more than we said and yeah you caught us on the import export numbers even though we didn’t say we were doing it we were you caught us and now China’s going around to to Peru and to to South America buying all the concentrate in the DOR they’re being covert about it
because they understand that this won’t be something easy Grant was saying chipping away that’s why I I’m I’m very fond of the term logar logarithmic Decay little by little by little by little then bang on a Sunday night we wake up to a new reality when is that don’t know but I agree with both of these guys we heading towards a reset and food for thought what better guy to have Usher over a set than the expert on bankruptcy and restructuring I’m not saying it’s going to happen under his watch but
maybe just maybe when he imposes these threats maybe he’s just trying to push the needle in that direction to reset the system uh operation Sandman The Dumping of treasuries a dumping of dollars spiking interest rates to the moon what happens then stocks bonds real estate the banks the insurance companies poof oh but guess what we can issue our new cbdc I mean I’m not saying this is going to happen and if he does it could it could he go down the road of pegging it to gold and silver or Could It Go the
opposite direction the United Nations way and and the World Bank all I’m simply saying is that this is a lot bigger it’s a lot more fragile it could go either way um I guess only okay I’m going to I’m going to pull on that thread in a minute I have to uh both yeah I’ll make one point gr you first come to you Frank just I give Frank the floor just um as a matter of perspective for all of us in this room the US dollar system which we’ve worked under our entire lives essentially our entire adult lives all
of us has been very very good for the West right it’s made the West incredibly powerful at a time when Asia was weak was myed in poverty um but just imagine try and flip the perspective and picture yourselves as living in Asia where you’ve grown up exporting to the West you’ve been under the Yoke of the dollar but now you have Ed hundreds of millions of people out of poverty you are building a rising middle class and your perspective is very very different suddenly the dollar system that has benefited us so well becomes a yoke
under which you’re operating so you are incentivized to try and find a way out of that we we sit here in the west and we look at the world through our own perspective our own prism it looks very very different to how it looks in the East I think the more the more we can get into the mindset of the people we’re trying to think through what they’re trying to do we understand the motivations a lot clearer I think yeah Frank was there something you wanted to bolt on there I just want to say that I I Andy I don’t I don’t agree
with that that you’re making the assumption that Trump is playing 3D chess with his strategy and that’s just not the way I think he’s thinking this through I I think the US I think everybody recognizes the the really smart people recognize they’re in trouble they’ve gone beyond it’s out of control there’s no way to reel this back in at this time with the the level of debt the deficits are going to explode um you know rates are going to be pushed Higher by the market um you’ve got all sorts of there’s so much debt in the world not
just in the US but it’s all over the world and there’s so many black swans hatching everywhere that something’s going to break and it and I and I suspect it’s going to break in the US first because you’re going to have deficits of three four five trillion dollar a year we’re going to get there very quickly to the point of nor where the point where there’s an actual crisis you’ve already have you know the Chinese have dumped a lot of their treasuries in the last quarter they dumped uh $51 billion with treas they dumped $730
billion Japan who’s been absolutely steadfast in owning us treasuries at a think of $1.3 trillion holding sold $63 billion in the third quarter CU they’re you know they’re having to defend their currency you’ve got all these things happening because of all of this debt and something’s going to break and I I don’t think that there is a strategy for it I think there’s a lot of distraction and in and the game they’re playing is distraction this whole crypto game I was railing this morning about crypto uh but this to me is a huge
distraction um to get people not not move people away from the idea of what is real money and and you’ve got gold is the only real money in the world and every country on the planet outside of this G7 including Eastern Europe is buying gold because and they’re selling their Treasures some very quietly and as you said Saudi Arabia and China are buying gold very secretly you have to ask yourself why why would you be very secret and not disclose your Holdings well you know I grew up as a I got into this business as
a Trader you know 50 years 45 years ago and as a Trader you know you never if you’re trying to accumulate something you don’t show your hand and that’s what they’re doing so while in the US they’re screaming at the top of their lungs to buy Bitcoin and Bitcoin ETFs and all of this stuff the really smart sophistic sophisticated people all around the world are buying gold so ask yourself why the US media Wall Street has never ever and still even though gold has outperformed the S&P in the last 25
years we’ll never talk about gold they have a reason cuz gold if you buy gold that means you smell trouble for your home currency and they know they’re in trouble and I think Bitcoin and all this crypto stuff is is is a distraction I think it’s a distraction from reality and reality is going to hit home very quickly so consensus on the panel thus far has been we’re heading towards some kind of monetary reset uh Andy I want to give that idea some air time but just to recap some of the things we heard you
know back in the height of the Petro dollar Libya tried selling oil outside of US dollars US Army arrived at the door Iraq tried selling oil outside of US dollars US Army arrived to their door and today we’re seeing maybe similar uh threats made this time with tariffs but you want to trade outside the US dollar we’re going to tariff your economy 100% uh that’s a game you can play for a certain amount of time um but we’re heading towards some kind of a reset probably and it you know you reminded me
of a tweet I read this week posted by Elon Musk that said Global debt has now hit $315 trillion holy smokes Earth sure owes Earth lot of money right and if for no other reason than that we’re going to have some kind of a reset if you’re in the position of the United States you’re going to want to be the one to trigger it right when disruption happens you want to be in control of it you want to be the one that caused it not the one disrupted by it is that is that idea Andy behind your speculation that maybe
Trump is the Trojan Horse who’s going to ride in and then lift up the curtain on the the monetary reset through some vehicle well that’s what I was saying today is he the horse or is he riding the horse I mean I think if you haven’t learned to question everything over the last four years and you’ve learned nothing period that’s my opinion and if if we can all realize that from a from an indebtedness standpoint it’s game over you don’t think they’ve realized it they know that there has to be a reset
we we’re 200 trillion in debt how do you pay that off you don’t and so either you default or you inflate or you could revalue gold to $142,000 an ounce and your balance sheet would be pristine as crazy as that sounds I interviewed Judy Shelton we talked about this she wants to introduce $50 or 50-year treasuries redeemable in Gold she even talked about issuing stable coins off of it but if if there has to be a reset why would the most powerful Bank in the world the bank of international settlements reclassify
gold as the world’s only other tier one Reserve asset why would the central banks be buying it at a level the has never seen and how about the repatriation of it 40 countries have brought their gold home from the bank of England in the New York fed because that used to give them access to the to the comx and to the lbma why are they all doing this why gold why not something else as a tier one Reserve asset you talk about something that that maybe should be mentioned here also and that is that you know confiscation no I
don’t think it’ll happen I always said I think they’ll take the ETFs and this bear is mentioning just a hm as to to Grant you know things that make you go hm one of the best I’ve ever seen this makes me go hm so JP Morgan paid a $920 million fine to the justice department for manipulating the metals Market they were allowed to continue to be the custodian of the world’s larg silver trust SLV right HSBC Bank was the custodian of GLD but not anymore now JP Morgan is the custodian of GLD and they’re moving all of the gold into JP
Morgan vaults who now possesses more gold than most of the G20 countries you want to reset the gold price reset it to a level and by the way in every central bank balance sheet you know what what the name of the account is that gold has held the gold revaluation account that is the name of it it happened in 33 They confiscated they revalued it devalued the Dollar by 40% it happened in 71 when we close the gold window at 35 bucks an ounce it’s now 2700 who’s say that they couldn’t revalue gold to a level really
really high and Peg a new system to it reset the system I don’t know but like I said what better guy to do it than the guy that is the master of the bankruptcy and reorganization I’m just saying hm just think about it yeah okay I like it um uh Frank I want to give you the final word and then quickly run down the panel uh your top strategy for yourself right now to manage this transition you know it’s hard to time we don’t know but we’re going through it in real time that’s pretty fair to say uh top
strategy for yourself in your portfolio to weather the storm and any other comments you want to add on there Frank I was just going to say that one of the things that where people haven’t a lot of people haven’t connected the dots is that the countries that are participating in the embridge OR and want to there’s actually uh five and there’s 31 observing countries at the moment those are the same countries that are buying gold in huge quantities and one of the in and although we’re probably not going to get a new currency
like the brick unit that was talked about anytime soon that’s going to take a long time but in the meantime the one way that the whole global trading system can work under this new mechanism with these digital Central Bank digital currencies is that you have bilateral trade agreements between countries in their local in their local currencies Central Bank digital currencies and at the end of a period any unwanted currency if you have deficits if if you’re running deficits on with a on a bilateral deal you would settle that
with gold much like they use the bills of exchange back in the Middle Ages um and right up through the Renaissance that that is an easy way to trade in local currencies and not end up with unwanted currencies and that’s one of the theories that I have um why they’re all buying gold one of the reasons they’re all buying gold Andy final word strategy to navigate uh the next few years accumulate assets could be Bitcoin could be gold could be silver accumulate assets if assets feed you liabilities eat you the wealthy people own assets
and um for all of you people out there who who who like Bitcoin I think we should be complimentary to one another instead of um instead of uh fighting and divisive because in essence we see the the same way the Bitcoin folks typically want to make more money and the gold people want to keep it for their family and pass it on and I would just simply say that there could be a marriage between both ideologies and I think we’re a whole lot stronger if we if we are combined at least in terms of getting the word out there because so
many people who are well read just read the wrong stuff and you can’t get out of the way what you don’t see coming and and there’s some stuff coming so I don’t know accumulate assets and and do the best you can to mitigate your exposure to the dollar I think that would be the best advice I could give thank you Andy uh Grant want to give you the final word here my my personal Focus for since right before covid has just been on protecting my purchasing power that to me has seemed like the biggest challenge
that we all face and and as luck would have it gold has done a phenomenal job in in doing that um you know the median house price in the US is up 50% in the last 20 years in gold ounce terms it’s Fallen 70% so having that in your head and understanding what precious metals can do for you in terms of preserving and in certain periods enhancing your purchasing power um you know it’s a useful exercise to go through so that to me the strategy is I don’t want to not be able to afford what I can afford now
because it’s been confiscated by all the things we’ve talked about here in the debasement of the currency last one more for you yeah one more for you come Frank just listen I’m sorry I got to do this on the Bitcoin thing okay so I agree buy gold buy silver I would not buy Bitcoin and I’ll give you the reason why a it’s never been tested in a real crisis it came after the financial crisis if we ever get a US dollar crisis do you honestly think that the American government if everybody rushes to bitcoin as a safe haven do you think US
Government will allow that to happen they’re they’re going to react and they’ll use National Security issues or use you know too much you’re using too much energy you know there’s fraud there’s you know terrorism all this stuff that it Bitcoin can be blamed for and it’s very easy to make an illegal or tax the hell out of it shut off the on andof ramps and you’re screwed you got a bunch of codes sitting in a wallet what are you going to do with it if they try and take it away from you the thing about gold is that although governments
may try and confiscate it from you they’ll never destroy it CU they own it that’s not the you can’t say the same for Bitcoin so I think that they’re not equal they’re just not equal I never said they’re equal though they’re not equal but I said for those people who like it it’s an asset accumulated Jamie Diamond said you know by Jamie Diamond who’s the CEO of one of the largest banks in America JP Morgan um which has launched his own Bitcoin ETF has said on numerous occasions he thinks there’s no
value that it’s a Ponzi but he he us a great analogy he says listen if people want to smoke they should be allowed to smoke although it can kill you and uh and so you got understand about Wall Street and you know they’re not there to make you money they’re there to make money they would sell fusur and horse manure if there was a demand for it and that’s what they’re doing with Bitcoin and you know he’s come out and said it he’s the head of the biggest bank in America it’s got to tell you something
well look I own a precious metals company so you can see where my allegiance is but I think to continue to fight this fight amongst the same mentality at least in terms of dollarization in terms of reasons to not have all your wealth in dollars I think is a fruitless cause because they won’t listen to us so if you can’t beat them at least try and speak to them all right we might not reconcile the marriage tonight but we’re going to keep trying I appreciate all of you Gentlemen please give him a round of applause
