A Gold Revaluation from $42.22 to Current Price Levels Would Obliterate the Banks. (Uncut) 02-19-2025

A Gold Revaluation from $42.22 to Current Price Levels Would Obliterate the Banks.

And if that can’t be paid back, you devalue that note to nothing and you throw it out. But that’s what most of the dollar is. It’s IOU notes.

IOU notes of what? Of what, for God’s sake? It’s IOU notes of the original gold that the dollar started with. That’s what it is. So that’s where the dollar’s most of its value is.

It’s in the IOU note that is still tethered to gold at 42. Wednesday, February 19th, 2025, Meneco64, Home of Alternative Economics and Contrarian Views. Today I’ve got Rafi Faber of the Endgame Investor YouTube channel.

You should really check his channel out. I highly recommend you subscribe to it. You can just type Rafi Faber or Endgame Investor.

Rafi, welcome. Thanks for having me, Mario. Yeah, thanks for coming, Rafi.

And I watched, well, actually, my wife watched your video yesterday about $17,000 gold and revaluation of gold or devaluation of the dollar. And then I watched it and I thought it was interesting. And I’ve been speaking a little bit about it.

There’s a lot of speculation. And before I start, I like to say we’re not saying this is going to happen. It’s possible.

And Rafi, before I let you explain how you see this possible revaluation, I just wanted to tell the viewers and Rafi as well that the dollar has been devalued because when you revalue gold, you devalue the dollar. It’s been done four times in history. And the only reason I found out about the first time is because I got this book of United States coins.

You’re such a nerd. Wow. Yeah.

If you go to the Gold Eagles, it says here that in 1838, they changed the weight and the composition of the dollar. So prior to 1838, one ounce was $19.38. And it was actually 22 carat. After that, it became 90%.

22 carat is 9167. So anyway, that was the first revaluation. Doesn’t seem like a lot.

But Rafi, percentage terms, guess how much it was? From? 1938. And then they revalued to $20.67 in 1838. Like 5%, 6%, something like that? 6.66. Oh, okay.

It’s like a Freemason kind of thing again. I don’t know. I don’t know.

And then they revalued again almost 100 years later. So it shows how stable money was for almost 100 years. It was at $20.67. That’s why it was such a big deal, I think, when Roosevelt revalued it to $35 in 1934.

And then it stayed there until I’ve got the dates here. And I’m going to share it with you guys a second. I’ve got two articles from the New York Times.

I think that’s the only good thing the New York Times is for now, is for archives. It’s really such a trash paper now. So the gold price bill is sent to Nixon, March 22, 1972.

So it says here, the House passed overwhelmingly and sent to President Nixon today the legislation formally reducing the international value of the dollar by raising the official gold price from $35 to 38. The vote on final passage after relatively brief debate was 342 to 43. So it does look like Congress has to approve this.

And then that didn’t really work out. So they had to do it again. And that was February 13, about a year later, gold to be $42.22. And it says again, the United States announced tonight devaluation of the dollar by 10%.

And Rafi, I just wanted to show you this chart before I let you chime in. So that’s when they announced the first, well, the number three revaluation in history, March 72. Gold was already trading almost at $50.

So they didn’t even revalue to the market level. And notice how pretty much a month or two later, these are monthly bar charts, bars, gold started taking off. And I guess they realized, well, we didn’t revalue it enough.

So they revalued it again here in February 73 to $42.22. And then it just took off. And we topped around almost $200 in December 74. It corrected to about $100.

That’s about a 50% correction. That’s what we saw from 2011-2015, almost a 50% correction. And then from here, it went to almost $900 in about, well, just under four years.

What it seems to me, Rafi, if there’s going to be a revaluation of gold or devaluation of the dollar, one thing, and it doesn’t, I don’t know what price they’re going to pick. It will probably be a price that’s below the market, or you never know. It could be where the international market price is.

It seems that it puts a floor on gold and it’s really bullish. So with that, I wanted you to chime in and also talk about the other things that you think would happen if there were to be a revaluation and what it really means. Because some people, and you explained this really well, some people don’t understand that it’s the dollar or the currency that’s priced in gold.

It’s not gold really that’s priced in dollars. Gold came first, right? Yeah. So I just want to make this clear before I start philosophizing.

I don’t think this is going to happen. I don’t think a revaluation, at least a statutory revaluation is possible. There will be a revaluation of gold, which is really a devaluation of the dollar, which is really a devaluation of the debt, because the dollar, the real definition of the dollar is everything that’s on the Fed’s balance sheet, which includes the gold and the debt.

So you’re not devaluing the gold that’s on the balance sheet, you’re devaluing the debt and the value of the gold takes its place. That’s what’s happening here. So I got an interesting WhatsApp from a businessman friend of mine in Israel, who understands money more than most businessmen.

Like he’s in the top 0.1% of monetary geniuses that understand what the monetary system is. And he’s also a good businessman. It’s very rare that you have that combination.

So he said, he probably watched the video and he sent me a message that says, Rafi, a revaluation of gold is impossible. It would instantly collapse all the banks, all the bullion banks, the monetary system would break down and you’d have like an instant transfer, an instant and crazy transfer of wealth from most of the population to very little of the population and it would cause chaos. And I don’t know to what degree is correct, but to some degree definitely is correct.

I don’t know how long it would take, whether it would take like minutes, hours, weeks or months, but it wouldn’t take more than a month or two. If we look at the charts of the devaluations from the 1970s from 35 to 38 and then 42 each time, it takes like a month or two or maybe just a few weeks because it’s on the same monthly bar candle or candle or bar, whatever it is. It would be very, very quick and it would be quicker than could be handled by civil society.

So what he thinks is happening. In the 70s though. Yeah.

Yeah. It happened in the 70s, but like look at the devaluations they did back then compared to what would have to be done now. I mean, we’re still at 42.22 and the market price is like 50 times that.

Is it 50 times? Seven times I think. Okay. It’s like it’s unfathomable compared to what this is.

So a small revaluation from 35 to 38, relatively small, it’s still very disruptive. And the biggest devaluation we had was from 2067 to 32 and then 35 and 1933 and 1934. And I showed in my video what it does to gold stocks, what it does to consumer prices.

It’s a very disturbing revaluation. And so what his hypothesis is that they’re just trying to control the conversation to get people to talk about the idea of a gold revaluation, just so that the idea that gold is money goes into our consciousness. Now, I don’t know if he’s right there.

That’s his theory. What I think actually happened and I don’t know if I’m right either. This is just what makes the most sense to me from the little evidence that I’m able to see, which isn’t much, like my view isn’t that broad in terms of what happens behind closed doors or anything that they’re planning.

But Scott Besant, he doesn’t seem to understand money itself that much. So I think when he said to monetize the balance sheet of the US, I don’t think he was talking about gold. I think he was talking about like just property of the federal government, like selling off buildings or maybe renting them out or selling national parks or developing land or something.

I don’t think he was talking about gold at all. I don’t even think that was in his mind. But OK, maybe it was.

I don’t see that as something that he was actually thinking about. Sorry to interrupt you. I listened to that comment he made and he was in the Oval Office.

He did say treasuries assets. And then he also said the treasuries liquid assets. So I don’t know what he I mean, I would consider gold very liquid.

But anyway. So maybe. Look, I’m not saying it’s impossible.

I’m just it seems very unlikely to me. But unlikelier things have happened this year and last year. So who knows? I’m just giving my thoughts on it.

But in terms of what would happen? Here’s a good analogy. It was just one that that occurred to me this morning. I pay my kids in silver dimes and quarters for chores that they do.

And every so often, we pay them shekels just so they have the fiat liquidity if they want to buy something. So this morning, one of my daughters needed 10 shekels and we only had like eight or seven or eight little coins in the change purse. So we had her go to my son who wasn’t here, who has a few shekels and take the shekels and then put notes in his little pouch.

So he has a note and he has an IOU from his sister that she owes him. Okay, fine. And then so I’m thinking like that.

Is that part of his money supply? No, it’s not part of his money supply. But then theoretically, he could trade that note with his sisters and like for whatever favor like you could. But then if that can’t be paid back, you devalue that note to nothing and throw it out.

But that’s what most of the dollar is. It’s IOU notes. IOU notes of what? Of what for God’s sake? It’s IOU notes of the original gold that the dollar started with.

That’s what it is. So that’s where the dollar’s most of its value is. It’s in the IOU note that is still tethered to gold at 42.

But in order to tether those IOU notes of gold at 42, you need, I think, Phil Lowe, the Bidder Draft guy, who I do a show with once a month, he’s like, you need more gold than exists in the solar system to satisfy all those claims at 42. So the devaluation from 42, let’s say 2800, would be a massive devaluation of the debt. And all of these banks are stuffed with hundreds of billions of dollars of this crap, which the purchasing power of that debt would completely plummet.

And what’s so pathetic about the way the mainstream media, let’s not even call them that, they’re not even the mainstream media anymore. There’s some kind of like a pimple or a zit or tumor on the body of the real media now saying, oh, if they devalue gold from 42 to 2800, well, then the treasury will have 700 billion dollars to spend. Yeah, 700 billion dollars, they could get you a few packs of gum.

It’s ridiculous how they’re even saying that. And the fact that we’re even having this discussion, imagine if there was even a discussion about the revaluation of oil from 71 to like 800 dollars a barrel or whatever it is. Why would we even be talking about this? What is the connection between oil and the dollar? Nothing except that you can trade one for the other.

The link is between gold and oil, not the dollar and oil. The dollar is just the intermediary. The fact that we’re even talking about revaluation of gold as if it is consequential in any way, is itself an admission that the money is the gold.

Why do you have to maintain this lie that gold is 42 dollars and 22 cents on the balance sheet of the Fed? We all know it isn’t. Why should it even be consequential at all that you change a fictitious number to a real number? Why should that change anything other than the price of wedding rings if gold is not money? But it is because we’re talking about this as if it’s like this big consequential decision, which it is. But you can’t say it’s both consequential and that gold is just a metal.

What if they just scrapped that statutory price and just I think the ECB marks its gold to market and just say we’re going to mark gold to market now. I guess that would probably I mean, that would improve the Fed’s balance sheet and they could lend more to the Treasury. And I think that’s what they’re looking to do, because right now it’s only worth about, I think, 12.

Is it 12 billion that that gold, the 8133 tons? I don’t know. Or maybe, Rafi, they haven’t worked it out like we have or you have that by revaluing the statutory price would be disastrous. They might do it and create havoc.

Yeah, well, okay. So the ECB is a different case. The ECB is that it controls a currency that is not the reserve currency.

The dollar was set up as the reserve currency post World War II thanks to, I think, Russia was a big part of it because they had all these dollars. So the ECB, the value of the euro is less dependent on the gold that it has and much more dependent on the value of the dollar, which is dependent on the gold that the Fed has. Right.

The ECB’s gold is just, it’s more of a, it’s not a backing to the euro. It’s more of an, it’s a liquid asset that they have separate to their own monetary system because their monetary system is based on the dollar from way back from the post World War II era and that and the regression, the regression principle or the regression theorem, it’s not just, you know, going back, you know, to what the, what the gold dollar exchange rate is. It’s, it’s going back to like all the, the collective economic links that existed back then and that have evolved since all the way down to retail level.

I mean, obviously, like just like evolution and microevolution is a process of, of, you know, every mating, every sexual relation that has happened, you know, in every species going back from the beginning of time to now. So too, like the regression principle is, is a collection of every economic transaction leading up to where we are right now and why, why we’re transacting the way we are. It’s linked to everything.

So the ECB can, can mark it’s, it’s gold to market without affecting the main global monetary system, which is based on the dollars marking to gold, not the euros. Yeah, no, that’s a good point. So what do you think is going on? Because all we’re seeing the lease rates go up massively in London.

I saw yesterday the lease rate for GLD gold for borrowing GLD and getting the gold out of GLD and you need 10,000 shares. So it’s for big institutional holders that jumped yesterday from like 4% to 11%. It reminded me of the LIBOR back in 2008 when that spiked and also reminded me of the, the repo crisis in 2019.

What do you think is going on? Why so much physical gold is going to, to the US? I don’t know. I’ve, I’ve been, I’ve been trying to figure this. I think I asked you this question in one of the interviews that I have with you.

And you, like there are answers, but there, obviously there is an answer, but in order to like, find what it is, you have to like, figure out the financial situations of all these actors that are borrowing these shares and what exactly they need and what are their counterparty people demanding and why are they, why do they need the gold from the, why is it going to New York? Why is gold cheaper in London and more expensive in New York? And, and I just, I don’t have a satisfying answer for it other than to just say generally when the monetary system is under stress, like everything goes into the core. It’s like when your body’s under stress and it’s trying and you’re, you have hypothermia, right? So like your blood comes out of your extremities and goes into your core to keep your, your main organs warm, and then your hands are freezing and you’re shaking. But, so, so if the, if the monetary system is under threat, then, then if you can take from biology, just like we did the evolution, like the, the monetary liquidity, the strength, the warmth is going to go out of the extremities and go back into the core, which is in New York and not in London anymore, right? Since post-World War II when America conquered the world, basically, then, then, so when the monetary system is under stress, we should expect the gold to go towards the core.

It’s like the gold is the blood. It’s not the dollar. And it’s going to, it’s going to try to insulate the dollar, which is the, the derivative liquidity that most people use.

So I know that’s not exactly an answer, but it is a biological analogy that I think is accurate. I just don’t know exactly why. So about the borrowing from GLD, if I were, if I were a bank and I had obligations to make deliveries, then, and I didn’t have it, then I would, I would borrow GLD, make the delivery, and then hope I can buy back GLD at a, at a cheaper price.

And then not only like it’s, I would be able to make the delivery and then buy it back and then profit on the short, or at least break even and, and get rid of my obligations. So I think that’s what’s happening. Somebody has to make a delivery.

They don’t have the gold. So they’re using GLD. And I don’t know if I pointed this out last time, but, but in 2020, the ETF holdings were like, they were skyrocketing both GLD and SLV.

As, as the gold was flowing into New York, the, the, the, the holdings of the main ETFs were just like going vertical. So that’s where the gold was going. So this time, the, the GLD is like meandering up and down as gold goes up and up and up.

So I think that, that demand for GLD, I think it is increasing. This is my theory, but it’s being counteracted by redemptions from people who want the physical, which we didn’t see last time, because at that point, probably, you know, London did have enough liquidity to supply it. And this time they’re getting kind of low.

So they have to take from GLD also, which is why we’re kind of seeing a choppy action in the holdings there. We’ll, we’ll see who the weakest link is by, you know, whatever bullion bank goes broke first, whether that’s going to be now or in a few weeks or a few months. These, these, these indicators in the ETF, the, the borrowing fees, I think which went to like 10% or 10.4% yesterday.

I just started following this. Like it was, it’s a new thing to me. They went to 10.4%. That doesn’t happen, you know, just on a, you know, because the wind is blowing a certain way.

It’s happening because of a sustained demand for gold, where it’s coming from. I don’t know, but we’ll find out when the first, when the first bank falls. You spoke about like the gold going back to New York, the center of the monetary system and in your videos, you have a little cartoon at the end where, where you’re smashing, smashing the John Exeter’s pyramid.

Yeah. So, and John Exeter’s pyramid is he, he says that eventually the, the system, the fiat currency system or the dollar system will collapse and all the liquidity from the pyramid will flow down to gold. So could, could this possibly be what’s happened, you think, or are we jumping the gun? No, no, it’s, it, that process is always happening.

It’s always happening in principle. Like when, when the bubble pops, when it starts to pop or deflate, that’s, that’s the purchasing power going into gold. Like in, during that time in those few weeks in 2020, when gold was going down from 1700 to 1450 and gold was crashing, you know, it wasn’t, it was, its purchasing power was skyrocketing because the value of everything else in dollars was like crashing like five times as fast as gold was.

So that, that really, that was the, the transfer of purchasing power from the, the higher derivative layers into gold, except the bubble was reflated again and reflating the bubble takes the purchasing power out of gold. Even if the dollar value is going up, it takes the purchasing power out of gold and reflates the top levels of the pyramid, right? So instead of seeing it as like this rock solid pyramid, or you could see it as like, let’s say a perimetal bubble with a solid gold base, and then the air goes in, the air goes into the upper layers and makes the big, the upper layers even bigger. So the purchasing power seems to be in them.

And in any given time when people will trade liquidity for the different layers, you can get that purchasing power, but it’s, it’s ephemeral. And it’s based on an illusion that everyone has it where only a few people have it. And when nobody has it in the upper levels, it all goes down to the bottom.

Yeah, I’ve noticed, you know, and I haven’t, haven’t got the charts, but I’ve shown them a few times. If you do, let’s say the 10 year treasury price versus gold, gold’s taking off. The Dow Jones, the Dow gold ratio is dropping through around 15 at some, some key levels.

And I think that’s going to continue. So do you think the policy of the US is to just let the market naturally devalue the dollar and let gold go higher? Or do you think they also need to, maybe they need the physical gold because they want to sit down with the Russians and the Chinese and it doesn’t sound outlandish anymore, because Marco Rubio did an interview with Megyn Kelly a few weeks ago, Secretary of State, and he said, we’re not in a unipolar world anymore. We have to respect other powers.

He said we’re in a multipolar world. And seeing that the BRICS are buying so much gold, the Americans are saying, well, we got to bring back or unencumber a lot of the gold that we have, because we might need to sit down with the Russians and the Chinese to, to, to kind of stabilize the monetary system. I don’t know what you think about that.

So your basic question is, is the US government buying gold? Is that why it’s going up in whatever way they’re doing it? It could be. I really don’t know. Like, I don’t have, I don’t have like a complicated, you know, four dimensional trust political monetary mind in terms of like, you know, this geopolitics.

That’s not how my, that’s not the strength of my brain. I’m more of the upper ether concepts guy. But it’s, it’s possible that, that the US government is buying gold on the, or on the insistence of the Trump administration.

And, you know, how would that, how would that fit in? I mean, if, if Trump is sending Musk to like, respond positively to these audit requests, then, you know, maybe he’s, maybe Trump has been buying the gold and say, okay, now we have, you know, the, the tons that unencumbered tons. And now you can do the audit and you can make it public. And, you know, as a, you know, let the whole country see counting the bars and whatever he’s going to do.

It could be, it could be that he’s buying it. In terms of what, what do I think the, the policy will be, will be just hands off with the market restructure. I think that is the, the, the ideal they want to emulate, or they, they want to follow that path, but they won’t be able to, they won’t be able to, to a point because they, they want it.

They want to do that because that’s the principle, like let the markets work itself out. That’s, that’s Trump’s philosophy. And that, that will continue until there’s a serious problem, right? When the banks start to fall, Trump is not going to be, okay, well, let’s just let them fall.

It’s, it’s, he could, it’s possible, but I just, I don’t see that happening. What he’ll, he’ll let the market work itself out until it works itself out too much, and then he’ll stop it. And at, and at that point, the, the, the, the devaluation of the dollar, the revaluation of gold will go from, oh, is it going to be statutory? Is Trump just going to do that? It will be like, well, the markets, the market itself is going to say, well, if you’re not going to do it statutorily, we’re going to do it right now.

You know, just, you know, a, a, a, whether you like it or not, basically. And that’ll be the hyperinflation, which is the same thing as the devaluation, which is no matter what you call it, no matter what the dollar value is, it’s really the relationship of gold to every other asset. And when all the purchasing power gets vacuumed out to the maximum extent of every other asset and vacuums into maximally gold and silver at a 15 to 1 ratio, when silver hits a 15 to 1, we’re there, it’s done.

And then we can start redistributing the money. So that’s, I mean, whatever you call it, hyperinflation, hyperdeflation, revaluation, devaluation, it’s all different ways to describe the same process and the same end game. Yeah.

And just to let the viewers know, before we wrap up, uh, if you already have gold and silver and I hopefully you do, uh, the, I think it’s more important than ever to, to keep it safe. Uh, Rafi is also, um, he promotes Dirty Man Safe. So yeah, check out Dirty Man Safe.

Uh, there’s a link below in the description. You get a 10% discount, uh, for Dirty Man Safe. Uh, Rafi, uh, what, any final words for, for the viewers, what they should be focusing on right now, um, with all this, uh, kind of, uh, there’s so much happening right now.

Yeah. Yeah. Okay.

So what I would say is don’t, don’t get too hopeful about politics and, and believe me, I’m so excited about what’s happening now. I’m excited about what Trump’s doing. I’m really excited about RFK.

I’m super excited about Tulsi Gabbard and, and dismantling as much as we can in the deep state. That’s all great stuff, but it’s not going to stop the end game, no matter how good they are. It’s just not.

So, so maintain, I’d say, don’t be black pill. Don’t say, oh, it’s, they can’t do anything. And they’re just part of the deep state.

This is all a 17 dimensional chess and they’re just trying to take over. Uh, don’t think like that because that’s just going to make you not do anything and, and not improve your situation. And it’s going to depress you.

And I can’t stand people like that. I can’t be around them. I can’t talk to them because I just, I cannot be in that mental state, uh, maintain your hope.

And, and, and you should like the way I see the Trump administration now is, um, as like, not, not a savior of the people, but they’re packing, they’re packing away what they can, whatever they can salvage, you know, free speech is a value. That’s a huge one. Um, if they’re, if they’re buying gold, they’re trying to save what they can of the dollar.

That’s also big, but they’re not going to stop the end game. What they can do is pack up, uh, as much as they can to rebuild afterwards. And meanwhile, what you have to do is you have got to keep, uh, you know, stacking yourself, uh, maintaining skills, uh, honing skills, uh, getting connections and, and, and staying positive and, uh, and relying on God because none of us can control it.

Even the tiniest amount of what it’s about to happen. All we can do is just hope that God will bring us through it, uh, calmly and as calmly as possible. And, um, you know, God brought us through Corona.

And now that I see what’s happening politically, I see like all that suffering that we went through in the early 2020s. Um, none of this would be happening. None of these positive stuff would be happening if not for that hell hole back there.

I agree. Well said Rafi. And, uh, with that, I’m going to wish you a great day and, uh, to the viewers as well.

And, uh, yeah, I’ll talk to you later. You too.