Transcript
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the dollar would collapse the stock market would collapse the bond market would collapse banking system would collapse the insurance companies would
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collapse everything this is the great reset little by little by little I call it logarithmic Decay little by little by
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little by little it starts to chip away as those dollars are no longer there's no longer a necessity to hold them and
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as those dollars start to come home inflation rates would go higher and higher and higher and higher and but
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when the world catches on that this is a trend a trend in motion that isn't going to stop and we only get faster that's
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when things get very interesting and if we were to see an outright dumping globally like an operation Sandman um as
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Mike Adams talks about uh it would be chaotic because the natural reaction of
0:44
of the dollar creating hyperinflation being dumped across the globe hitting our Shores in a tsunami of inflation
0:51
would be a massive spike in interest rates and the overleveraging of the banks in particular is a real big
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problem here when they say it's time and they flip the switch I think the West
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will have a hard time to push back against it because you will be talking the majority of human population a
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larger military might a larger portion of GDP and the majority of the world's Commodities I think they realize that if
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they're going to do this they need to be methodical about it and have all their ducks in a row question is how fast does
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it accelerate and that's anyone's [Music]
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guess on the spot with Michelle mccy is brought to you by swan on
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bitcoin hello I'm Michelle mccy thank you for joining us in a major shift
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Saudi Arabia has let the Petro dollar agreement expire opting to sell oil in
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multiple currencies instead of exclusively using the US dollar the
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agreement of the past 50 years expired on June 9th now the so-called Petro Dollar Deal reportedly stipulated that
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Saudi Arabia would price its oil exports exclusively in US Dollars and invest its
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plus oil revenues in US Treasury Bonds in exchange the US would provide
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Military Support and Protection to the kingdom this helped the US dollar cement
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its position as the world's Reserve currency and ushered in an era of American Prosperity so Saudi Arabia now
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looking to move Beyond an exclusive relationship with the US marks a significant change in global economic
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Dynamics and could have far-reaching implications for the US Dollars Dom
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meanwhile Saudi Arabia's Central Bank has also joined a trial for a China
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central bank digital currency crossb payment system known as project embridge
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and this could be another step towards less of the world's oil being traded in US Dollars and this all happens as the
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dollarization trend continues with the brics plus Ministers of Foreign Affairs recently meeting in Russia members
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reiterated calls to ditch the dollar and use their own currencies in trade and financial transactions and it's arguably
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the weaponization of the dollar after Russia's invasion of Ukraine that has accelerated the trend to dollarize and
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as the bricks members were meeting in Russia in Italy leaders of the G7 were also meeting and they agreed to issue
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$50 billion in loans for Ukraine that are backed by the profits of Frozen
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Russian Sovereign Assets Now ahead of the the United States decided to expand
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sanctions on Russia and China these new measures Target Chinese companies that
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support Russia's efforts in Ukraine and aim to deter foreign financial institutions from dealing with
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sanctioned Russian entities this caused an immediate suspension of trading in dollars and Euros on Russia's leading
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Financial Marketplace the Moscow exchange and Russia has also now officially adopted the Chinese ywan as
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its primary foreign currency and this all comes as China has been dumping its dollar assets Beijing
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sold a record 53.3 billion dollar worth of us treasuries and agency Bonds in the
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first quarter and has been piling into gold the precious metal now makes up
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almost 5% of Chinese reserves the highest since at least 2015 now not only
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are central banks buying gold at record levels but they're also reducing their share of US dollar res reserves
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according to the IMF dollar reserves held by central banks fell to
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58.4% during the fourth quarter of 2023 that is the lowest level in 25 years
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well here to discuss all of these developments and more what this all means for the global monetary system the
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fate of the dollar and your savings and Investments is Andy sheckman Andy is the
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president and owner of Miles Franklin precious metals he has over three Decades of experience in the precious
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metal sector and is a well-regarded expert on monetary history and political
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economy Andy it is great to have you back with us here on Kito Michelle it's
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great to be back thanks for having me I appreciate it Andy it is very good to see you but every time we connect more
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of what you warn what happen in our previous interviews does indeed come to fruition so it's always with a little
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bit of trepidation that we speak now Andy you have long warned that we will see a change in the dollar denominated
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money order that the dollar will lose its status as the global Reserve currency and asset and first time we
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spoke was January of 2023 where you warned that the trend to dollarize was
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accelerating especially following the sanctions imposed on Russia after its invasion of Ukraine and banning Moscow
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from the international Swift system what many called the weaponization of the dollar now since then much has happened
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including the expansion of the bricks something that you said would happen and member countries formalizing bilateral
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trade agreements not using the dollar but their own currencies something you also said would happen we've even had
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non-member countries like France ditching the dollar and completing natural gas deals with China paid for
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entirely in Yuan you also correctly called that the Saudis would join the
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bricks or align with the bricks they do kind of have a little bit of a toal out of the water there straddling it a bit
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but you will correct that they would align with the bricks and last time we spoke you said that the Saudis joining
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the bricks would be of huge significance to the Petro dollar status and would accelerate dollarization and seems you
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have been right again on that one now they've joined the bricks and just as a reminder to our viewers the bricks plus
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countries produce about 44% of the world's crude oil now now the
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Saudis it seems have let this 50-year long Petro dollar agreement laps they
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haven't renewed it it doesn't look like they will now this is super important because part of what keeps the dollar as
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the global Reserve currency has been its status as the Petro dollar meaning that
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oil could only be purchased using dollars so let's start off with some
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history some background here and remind our viewers how the dollar got the status of the global Reserve currency in
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the first place if you would be so kind as to give us just a very quick recap of Breton Woods then Nixon taking us off
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the gold standard and then signing the Petro dollar deal with the Saudi king back in
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1974 and how we got you why don't we start off with that
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sure at the end of World War II 1944 the Allies met at brenon Woods the dollar
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replaced the pound sterling as a world Reserve currency and we told the world at that point that you take our dollars
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but can always exchange them back at a fixed rate of $35 per ounce of gold we will in essence
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back the currency by gold making it as good as gold and it was that way until
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you know 1971 when several of the European leaders in particular de gal
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from France realized that we were printing more money to fund the guns and but butter Endeavor and the Vietnam War
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then we had gold backing it and called our Bluff and sent warships to New York Harbor filled with dollar bills
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requesting a transformation into gold and we did that so much so that over the
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period of about a year and a half about half of the gold held at the treasury was bled down and this is what led Nixon
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to take the unconventional Step at that point of temporarily which never opened back up the gold window and at that
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point our currency was completely Fiat that would be Breton Woods one Breton Woods 2 Loosely would be when Kissinger
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as you mentioned 50 years ago last week struck a deal with the Saudi Kingdom
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that hey we're going to protect you provide you Munitions but for that for that protection uh you will by extens
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men of OPEC value oil in dollars and then take the excess reserves and and
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recycle them into us treasuries and it has been that way for as you mentioned
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50 years now if we take that at face value that this deal was not renewed we
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then will follow what zultan posar says is Breton Woods 3 where we are right now
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A system that would be identified primarily by Commodities and I would add into it transparency A system that was
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predicated on opaque debt instruments is and Promises by a government that is borderline insolvent and viewed as I
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told you way back when uh in 2022 as being hypocritical and we are viewed
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that way by much of the Southern Hemisphere um I think the days of that being accepted as a as an asset the debt
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Promises of a country that is viewed as hypocritical those days are coming rapidly to an end and we see that by the
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massive sell-off and treasuries that we've seen over the last year to by the countries that have been our primary
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creditors China and Japan and and and Saudi and all of these countries that have been holding our treasuries seems
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to be that things are changing quite a bit and I think you can really highlight
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not only as you mentioned the weaponization of the dollar in the treasury market but taking the unconventional very dangerous step of
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confiscating or right let's just call it what it is stealing the Russian assets whether it be stealing the interest on
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the acral which the European Union is talking about to fund the Ukraine and
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the war or the United States confiscating the 5 billion in assets
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we're holding to fund Munitions to give to the country that we're Ste that is
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fighting the country we stole it from this is a line that you know once you cross it can you come back from it it's
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like a broken glass thrown against the wall can you put it back together before mom and dad comes home and I don't know
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Michelle if that's even possible okay before we get into all of those issues again I just really want to help
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our viewers understand the significance of oil being priced in US dollars for
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all this time and what it could mean if indeed this agreement is now fully done
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with yeah so every country on the planet's had the stockpile dollars for the last 50 years in order to buy oil
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the significance of that is extraordinary almost as extraordinary as taking the the reserves the excess and
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putting it into treasuries which is the reserve status of the dollar the settlement status of the dollar where
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every country needed to to own it and stockpile it in order to buy oil is certainly being challenged by all of
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these deals that are being done bilaterally where countries will trade with one another in local currencies and
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this is a huge deal in other words what is the incentive of countries to hold our dollars which are being inflated
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away at a rate of a trillion dollars in debt every single hundred days what used to take2 200 years to accumulate a
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trillion now we're doing it in 100 days and and and a government that has chosen weaponization uh of asset of of the
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treasury and the dollar if we don't align ideologically so the incentive of these countries who have been forced
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into holding dollars and stockpiling them creating a synthetic demand You could argue is no longer in place now
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how fast is this unwind is is is the big question but yeah the it's very very
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very significant the reason the dollar was called the Petro dollar the reason that it had such great privilege and and
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and the hegemony if you will was created because everyone had to own it in order to buy oil and oil makes the world go
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around you take that away and what is behind the dollar it becomes truly Fiat
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backed by nothing whatsoever but as Putin has recently said in a conference the confidence of the United States
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economy and I I have to you know add to that the confidence of the United States government and you ask yourself is that
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waning I'll leave that up to people to decide I'm sure we'll talk about that as this interview goes on right so you know
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the dollar backed by the full faith of the US government but paint a picture for us what happens when people stop
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using the dollar for oil what happens globally and what happens to people here
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in the US with dollars well ultimately it loses value I mean the the theory
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really would be that as those dollars are way more dollars outside the us then
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are inside the us because of the stockpiling to buy oil for for 50 years
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and as those dollars come home and and are sold back to the issuer because no
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one wants to hold them anymore now it hasn't turned out to a into a full-fledged dumping which I could see
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it turning into that at some point but there still is demand for the dollar as you mentioned still does represent 58%
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of of global reserves and there is dollar denominated debt that needs to be paid off but little by little by little
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I call it logarithmic Decay little by little by little by little it starts to chip away as those dollars are no longer
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there's no longer a necessity to hold them and as those dollars start to come home inflation rates would go higher and
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higher and higher and higher and heaven forbid it's a dumping there's something out there called project Sandman that
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basically says there's a whole group of 150 175 countries that have agreed to do
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just that to dump dollars and treasuries at a pre predetermined time question is
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is it orderly or is it chaotic but as those dollars come home the level inflation Rises as those currency units
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are added to the currency base here which would then raise interest rates and that's the big thing that I've
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always talked about is that Powell doesn't want to raise rates doesn't want to let the the 10year treasury get above
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5% because of the over leverage system in particular the banks and the broker or the insurance companies that are
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massively overleveraged and under capitalized and as rates rise and supposed L this magic number is at 5% on
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the 10-year treasury um things start to break now if all of a sudden the world
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is no longer holding dollars and in fact forsaking and dumping them and throwing them back to the issuer creating much
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much higher inflation than the CPI would probably tell us the the the market would demand a higher interest rate to
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compensate for that loss of purchasing power you can't have double- digigit inflation and singled digigit uh
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interest rates your currency dies so interest rates would rise to meet that
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loss in purchasing power to compensate for that and when that happens that's when you start to get into problems
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where as rates rise things that in this country that make people feel wealthy their stock Holdings their bond Holdings
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their real estate holdings and the money held in the bank are all inversely correlated to that moment and the
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overleveraging of the banks in particular is a real big problem here but if you think about it if this
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happened all at once if it was all at once it would be catastrophic as everything in this
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country is inversely correlated to a spike in interest rates including the banks and the insurance companies and
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when you realize that that this is something that you know I've been talking about for four years and has
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materialized much faster than I would have ever have dreamed when I started talking about it nobody was and now
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everybody is and when I think to myself could this really happen in a in a in a
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fashion that would be chaotic I think absolutely absolutely it could look it starts off slow and the players that are
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in the no don't want to cut off their nose to spite their face so it starts with little by little by little
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dollarization de treasuries replacing gold or replacing treasuries with gold doing it slowly methodically but when
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the world catches on that this is a trend a trend in motion that isn't going to stop and will only get faster that's
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when things get very interesting and if we were to see an outright dumping globally like an operation Sandman
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um as Mike Adams talks about uh it would be chaotic because the natural reaction
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of of the dollar creating hyperinflation being dumped across the globe hitting our Shores in a tsunami of inflation
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would be a massive spike in interest rates the dollar would collapse the stock market would collapse the bond market would collapse banking system
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would collapse the insurance companies would collapse everything this is the great reset could it happen I don't know
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I hope not but I think that we will see a a progression a continued progression
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of dollarization De treasuries that we have seen accelerate over the last few years it's not stopping question is how
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fast does it accelerate and that's anyone's guess right so even if there isn't this coordinated operation Sandman
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for everybody to dump the dollars at once even without that this is very
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consequential because Beyond agreeing to sell oil in dollars part of the deal was that the Saudis agreed to invest Surplus
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oil revenues in US treasur treasury bonds and that's what helped the US dollar cement its position as the
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world's Reserve currency and also ushered in an era of prosperity for Americans they enjoyed the benefits of
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being the preferred market for Global corporations to sell their we to for all Commodities and the inflow of foreign
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Capital into US Treasury bonds supported low interest rates and a robust bond
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market so what are the implications of that angle alone if the Saudis don't
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invest that Surplus money back into the US that is the angle alone and a lot of
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people who push back against this thesis say well you know the braks don't have a bond market and and the bond market is
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still the most liquid and where do you put your reserves well I'll tell you where you put your reserves first and foremost they have been putting them
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into gold and if you go back 25 years gold has doubled the performance of the bond market it's average
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9.9% compounding per year for the last 25 years but what it doesn't have is
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counterparty risk so when you look at all of these these bilateral agreements
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if we go back to the meeting in South Africa last year that was the the the that was the plan that was you know go
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back to the drawing board we still need to talk about how we reach a common settlement currency and I want to talk
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about that for a moment because James Rickards has a very interesting take on that and I agree with it but in the
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meantime let's all trade in local currencies where you know uh China just uh canceled big orders for for grain
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from from Australia and the United States replacing it with with um orders from Brazil the second largest producer
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or exporter of corn in the world and a big um grain producer and they will take
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you on for the payment not in dollars that chips away the dollar settlement and then the reserves would then be put
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into gold instead of us treasuries which have a better track record and have no counterparty liability but this is being
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seen everywhere whether it be between Iran and China or as you mentioned earlier between China and and the United
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Arab Emirates or between Russia and India the all these countries are trading in in local currencies that
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chips away at the dollar settlement status the reserve status gets chipped
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away when we see these country shedding treasuries like we've seen China's down to just over 700 billion in treasuries
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from almost three trillion and their gold Holdings have increased other than this month which has remained stagnant
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for 19 straight months in a row that's indicative of all of these countries in the southern hemisphere they are slowly
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and methodically deturi and accumulating gold and foreign or or Commodities in
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replacement and I really do believe that these Commodities as Zan POS are calls
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Bretton Woods 3 a system backed by Commodities have become more valuable than the currencies that they're being
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bought with and so the lack of Treasury settlement is really the key and I think
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this is the one thing that the people who the dollar Bulls and the the recency biased normaly bias people are missing
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and yes there isn't something like the bond market yet but I think gold represents not only you know think about
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it treasuries represent but a very small sliver of history in terms of other countries accepting a country's debt as
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an asset but gold has a 5,000-year history of that as do all of these Commodities there's an old saying he who
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has the commodity or the gold rather makes the rules and this flow of Commodities in particular gold and
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silver from the West to the east is being massively underestimated and and I
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think that under estim underestimation of the significance of that is a very very big Achilles heel um this is
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something where these countries I believe are looking to Commodities to replace in particular gold which is the
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only other tier one Reserve asset as as mandated by the bis in 2019 look at the
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massive accumulation of gold by all of these southern hemisphere countries and the slow dollarization and deuri they
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are trading treasuries and dollars for Commodities that cannot be weaponized or inflated away and and that's really gold
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is the issue here and it's being overlooked the Golden Rule Andy he who
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has the gold makes the rules right um now you mentioned that
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2019 uh change in the bis the bank of international settlements the Central Bank of central banks when they made
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gold 18 tier one asset explain the significance of that because that was
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one of the first points that I think really started to trigger this process in your mind that this dollarization
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trend is really going to accelerate yeah well since World War II there's been one
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tier one asset by Central Bank standards us treasuries and dollars and in 2017
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when we saw the bundis bank lead the charge to repatriate their gold from the New York fed slowly thereafter the bank
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Austria Hungary turkey Poland the Czech National Bank the Dutch national bank they all said give us our gold back from
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the bank of England in the New York fed and then quietly went on a buying spree where in 2018 the following year those
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same Banks bought more gold as a group than they did in the 60 years previously combined those numbers have continued to
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increase ever since but in 2019 the bis said oh by the way gold is now tier one
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um and that's a huge huge deal when you put all of this together and look where
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we are right now countries are continuing to do the same thing in fact what we saw uh what do we see the Bank
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of India who just bought one and a half times the amount of gold they bought all of last year just in the first four
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months of this year but they repatriated their gold they brought it back from the
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Bank of India to the point where much of their gold is or from the bank of England rather much of their gold has
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been sitting there since 1991 they now hold almost all of their gold but this is not something that is immune just to
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um uh India here or or or Center just on India we've seen Saudi Arabia and Egypt
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and a half a dozen African countries just bring all of their gold back from the New York Fed so not only is gold a
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tier one asset a riskless asset if it's a riskless asset you want to have counter remove counterparty liability so
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these countries who understand that it can replace the dollar in or the bond market rather the treasury in terms of
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its its status as a Reserve um and being recognized by the bis they are also
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removing counterparty Risk by taking it back from the bank of England which is the same thing as the London medals or
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the London bullion Market Association and the colx which is the the the New York fed this repatriation is just as
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important as the accumulation yeah um and in fact Andy according to a study by
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Invesco last year a substantial share of central banks were concerned about what we saw with sanctions against Russia and
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68% of respondents said that they were keeping Reserves at home compared to 50% in 2020 so in 5 years according to this
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Invesco survey of repatriation uh that figure is expected to rise to 74% of
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countries repatriating their gold we know China has been on a massive gold
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buying spree buying at least for the last 18 months apparently a pause in the last month we can get get into that
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where is Saudi Arabia with its gold purchases Saudi well again you know not not everything a lot of the the trading
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is done in a very um opaque Manner and what's called the over-the-counter market and the London
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Metals exchange so it's far more private far less less scrutiny um less
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transparency they've spent a tremendous amount of money investing in in um uh
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natural resource discoveries in Gold and Silver Mines I don't know how much they've been buying suffice it to say by
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all estimations they are have been buying a lot and using the selling of treasuries and replacing it with gold
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for the reasons that we just spoke about and it was Nigeria South Africa Ghana senagal Cameroon Al Algeria Egypt and
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Saudi Arabia that just brought all their gold back from the New York Fed so I don't have the official numbers how much
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they've been buying but if it's anything like the rest of the countries in the southern hemisphere a lot and let's
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remember one other thing that Saudi Arabia has been selling their oil for the last year to China for Yuan and what
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then happens is that yuan is immediately convertible because maybe China doesn't want to hold the Yuan they can
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immediately send it back and convert it into gold on the Shanghai Gold Exchange which is Cash and Carry give them give
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me the money take the product and we're seeing an extraordinary amount of action coming off the Shanghai Gold Exchange
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where these countries are accepting the Yuan for example you know all of the
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like for example you take a look at uh at at Iran who who just struck a deal with with China to
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modernize their uh their biggest airport they're paying for it in oil but any
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transactions that are done where yuan is received they are immediately convertible into gold on the Shanghai
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gold exchange this is how countries like Iran selling their oil for for Yuan or
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or Saudi Arabia doing it or Russia doing it these assets that are being sold for Yuan can convert into the world's only
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other tier one asset my guess a lot more than we would be led to believe and the repatriation from the New York
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fed I think speaks volumes about their their desire and their Outlook to hold gold themselves and what that actually
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means so let's get back to this Petro dollar agreement has there been an
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official statement from the Saudis or from the US is this
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confirmed I haven't seen really a ton that confirms in an official statement I
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wouldn't expect the United States to say anything really I mean that would just fit like a hand and glove but in term
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look I've seen in several Russian news outlets that confirms it but I have not seen anything from the Saudis the Saudis
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seem to kind of be playing both sides of the of the of the fence here so to speak
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and and I'm sure they have reasons to do that but I mean look um the Saudi just turned down a meeting an invitation to
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join the G7 meeting that was just here just a few days ago uh in Italy they turned it down they didn't want to go
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there they are they are uniting very very closely as you can see with the rest of these countries and when you
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take a look at their they just uh joined fully project embridge and people have
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been following me know I've been talking about project embridge for over two years and that is a crossborder digital
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payment system that was designed by China uh Hong Kong uh United Arab
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Emirates and Thailand and they are now a full member I'll read to you it says Saudi Arabia has joined a China
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dominated Central Bank digital currency cross border trial and what could be another step towards less of the world's
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oil trading being done in US Dollars the move announced by the bank of international settlements on Wednesday
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will'll see Saudi Central Bank become a full participant in Project embridge now
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what's interesting about project embridge they did two trial trades in 2023 the first was uh China using a
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digital Yuan crossborder with United Arab Emirates for oil and the second one was digital W Yuan crossb for gold and
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in both cases here I think what you are seeing are the two assets that are being remonetized as I mentioned Iran is
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paying um China in oil to remodern their their biggest airport and you know when
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you take a look at what gold represents and the massive amount of gold accumulation by the Southern Hemisphere
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and the the draw down in all of the world's exchanges and the convertibility of gold off the Shanghai gold exchange
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for youan all of these things are coming together where I think it's it's fitting
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you know it's setting up for a perfect storm where zultan posar is right this
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is about Commodities leading the way and these countries are in a race to slowly
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methodically accumulate Commodities without causing too much attention so am
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I surprised there hasn't been any official announcement no not yet but their actions are betraying their lack
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of uh rhetoric and I think it will become very obvious at some point and that's when the dollarization and the
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det treasuries accentuates these countries don't want it to happen too quick um you
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know as James Rickards talks about the common settlement currency the reason
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you don't see it yet is they want greater mass well there was five and now
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10 and 59 countries you you had mentioned a meeting in uh novigrad and
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what came out of that meeting were several things but the one thing that that I noticed the most that came out of
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that meeting was 59 countries have expressed interest and said they're going to join the bricks and you know
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Jim's comment was look if you only have 10 countries to to trade with in your
31:08
local currency that doesn't give you enough shopping options but if you have 59 countries in order to or 60 or a 100
31:15
in order to to buy goods and services from that is when they will issue their common settlement currency which will
31:22
then you know give them the ability instead of pigeon hoing them into a handful of choices to what would
31:28
represent the majority of human population a larger swath of global GDP and and the majority of the world
31:34
shipping lanes and the majority of the world's Commodities and all of these things that start to add up when you put
31:39
all of this together yeah I think it's it's going to happen but until then I
31:44
truly do believe that gold and oil have been remonetized and are look being looked at around the globe as a form of
31:51
money that lacks counterparty risk and uh project mbridge is just another
31:56
example so whether Saudi announces this officially their actions for the past
32:01
two or three years joining the bricks all of the OPEC countries on on the Belt Road uh joining the Shanghai cooperation
32:08
organization which is the largest regional financial and military organization on the world joining the brickson Development Bank their actions
32:16
are speaking loudly and to put an exclamation point on it uh you know the crown princing I'm not going to come to
32:23
the G7 meeting thanks for the invite you know those those actions or lack of
32:28
actions speak very very loudly to me and I think we'll see more and more of this as time goes on and we'll get more into
32:35
uh how project embridge challenges the Swift system as well as how the breaks currency as we said challenges the
32:42
dollar but part of the Petro Dollar Deal Andy was that the US was supposed to
32:47
provide Military Support and Protection to the Kingdom of Saudi Arabia now you mentioned how Muhammad bin Salman
32:54
snubbed the invitation to attend the G7 we know that tensions between the Biden Administration and Saudi Arabia um have
33:03
increased I mean since the beginning when Biden called Muhammad bin Salman a parah on the world stage there was also
33:10
that big signaling with the way the Biden Administration pulled out of Afghanistan and the debacle that that
33:18
was and the agreement that you'll get into between the Saudis and the Russians
33:23
for protection there after but again part of the Petro deal was that the US
33:28
gives the Kingdom of Saudi Arabia protection does this mean that they
33:34
don't want a military defense pack with with the us anymore what happens to that I mean say what you will at least for
33:40
now the US is still the military superpower are are the Saudis giving up on that part of the deal how do you see
33:47
that well no I I don't I don't that's why I think they're playing both sides but let's just talk about first of all
33:53
the Shanghai cooperation organization is the largest regional military organization in the world
33:58
the bricks control what two or three of the four largest nuclear arsenals on the
34:03
planet so when you talk about protection yes that is what the Saudi deal was
34:09
originally about was military protection and you know it's one of these deals
34:14
where I think that you when you add the combined military might of the countries
34:21
that they appear to be aligning with um it it it renders what the United States
34:26
has to offer far less meaningful now they have been talking about this other deal that they're working on which it
34:33
depends on a lot of things what's going on between you know the relationship between Israel and and Saudi Arabia and
34:40
all of these other things that we can add into it but which is kind of the reason I think they're straddling the
34:46
line here but what they are asking the United States for is very high-tech Weaponry which they've never given the Saudi Kingdom they are kind of holding
34:54
out for that and and who even knows if this other deal that they're talking about pans out I would just simply say
35:01
that they're aligning with a portion of the world that combined together has a
35:06
far greater military capability than the West alone does and that would be covered but here again the one thing I
35:14
admire Michelle about the bricks more than anything is how methodical they are
35:19
you know when you look at Bitcoin and Nvidia to me that's emblematic of the way the people in the United States
35:24
expect everything to work just like that right now you know instant gratification is not quick enough and you know I look
35:31
back on 34 years of of working in this industry to get to where I am now nothing comes quick nothing Richard
35:38
Russell my my um Mentor used to say if you earn 7% per year you're a rock star
35:45
and that takes time and compounding of time and of interest but time what the
35:51
bricks have been doing for the last 18 years this is not something that just came out of the ether it's been 18 years
35:56
but now the acceleration is happening but they do things in a very methodical fashion and they're not doing it shotgun
36:02
they are not trying to be instantly gratified they are doing it where they they get one chance at this the West has
36:09
Ruled The Roost for what 500 years um collectively and and they I think they
36:14
realize that if they're going to do this they need to be methodical about it and have all their ducks in a row so this is
36:20
something that I think is is I admire how how they're doing it and building
36:26
all of the backfilling and building the alliances and doing it with shipping lanes with commodities with military
36:32
with GDP with human population and the connection when you add the Belt Road
36:37
into it um you're talking 90% of human population at some point when you put
36:43
all of these groups together one of the things I mentioned with you way back when was the Eurasian economic Union and
36:50
the Shanghai cooperation organization I said they would join the bricks and it's they're the same countries uh Rickard
36:56
said it last year and now the president of bellarus is calling for a summit to join these groups together into the
37:01
bricks what you are seeing is a coal of countries around the world that are uniting under you know whatever it be
37:09
pushing back against the hegemony finding safety and numbers or looking at this as their chance to become
37:15
industrialized into a new system that they prefer one that seems to be more
37:20
Cooperative rather than coercive and when they say it's time and they flip
37:25
the switch I think the will have a hard time to push back against it because you will be talking the majority of human
37:32
population a larger military might a larger portion of GDP and the majority of the world's Commodities um and that's
37:39
an important thing you know especially for a country that's supp supposedly going green because there was just a
37:45
report that came out of uh JP Morgan that that said um China's dominance real
37:52
dominance lies in the mineral processing capabilities where they've processed 100% of the world's graphite Supply in
37:58
2022 90% of the rare Ur and 74% of the Cobalt the majority comes from the
38:03
Eurasian continent anyway but see these are the kinds of things that they are all Gathering and the countries in which
38:09
they align with and if you look at the comments that came out of that meeting uh in novag grad the countries that they
38:15
want are all going to be related to strategic shipping lanes and and natural
38:20
resources they're putting it together and doing it the right way methodically regimented and when they say
38:28
now uh it'll be a religious experience because that's when everyone that's when you would see The Dumping a massive
38:34
dumping where the dollar Bulls who have been right um albeit to a lesser and
38:40
lesser and lesser degree all of a sudden will realize that it's over and I hope I hope that doesn't happen but it appears
38:46
as though that's exactly what they're doing and doing it the right way rather than shotgunning
38:51
it okay we we lot to unpack there and and we'll get to that now trigger in a
38:56
bit but Andy yes granted you know China plays the long game and it's easier to
39:01
do when you have you know one president that doesn't really need to worry about term limits president she effectively
39:08
you know making it so that he can run full life and I I get that you admire aspects of this um but you know one
39:15
could argue that you say that it's it's co more Cooperative than coercive but
39:21
you know one could argue that China doesn't and and many of these bricks current countries don't really
39:28
represent the same value system of the West right a value
39:34
system which may have shifted but at least in theory is supposed to be one of
39:39
freedom of speech of Liberty of equal rights and you know the fact that China
39:45
can't play the long game is because as one example they don't have these term limits it's not a real you know
39:51
democracy So when you say you admire these countries I mean I I just want you
39:57
to kind of elaborate on on what you're what you really mean there well the where's the freedom of speech in this
40:03
country what happened to it censorship cancel culture um a and where is you
40:09
know the look at the the justice department and the inequality there and the and the the questioning of a
40:16
two-tier justice system and and look at how this country has lost its bearings and this is what I mean about being
40:22
hypoc hypocritical we go around the world telling people the way to do things and look at what's happened in our own backyard
40:27
we've let 17 million people into the country illegally our immigration system is a mess and and you know our justice
40:34
system our electoral system all being questioned the wokeness the lack of free speech every single YouTube video that I
40:41
did in 2020 the guest would or the host would say to me Andy don't say the president's son's name don't mention the
40:47
name of the virus by its name or I'll get cancelled and I mean I I even been
40:52
on shows a lovely lady named Sarah West Hall where GoDaddy took her domain so when you talk about free speech and all
40:59
of these rights that the United States used to be so proud about look at what's happened to this country and ask
41:05
yourself is it the same country when we talk about democracy I think the world looks at this country and doesn't look
41:11
at it the same way so they're making a tough choice do we align here or do we align there and and it's never an easy
41:17
choice but I would say to you and I'm glad you brought that up because I think the fundamentals and actually bothers me
41:23
more than anything the fundamentals that this country stood for you know the nuclear family the respect
41:29
of authority even something as mundane as saying the Pledge of Allegiance the little things in this country where you
41:35
respected your teachers and your parents and and and and the police officers and
41:41
I left Minnesota because they defunded the police I mean literally I mean I I watched the city where Little House on
41:47
the Prairie and Mary Tyler Moore was filmed go to hell in a very short period of time and the lack of things that this
41:56
country stood for and stands for have bothered me more than anything but if you think that that's lost on the rest
42:02
of the world I got a bridge to sell you the rest of the world sees this country and says what the hell is happening in
42:07
the United States and um I I think that is part of the reason you're seeing more
42:13
countries have an easier time making the choice do we take Cooperative industrialization regardless of the fact
42:20
that we don't align maybe with the bricks but do we even align with the United States anymore is what they are
42:25
pedaling real or not and I'll leave that up to people to decide but I will tell you it disheartens me as a father of
42:32
three kids more than anything to think of the world my kids are growing up in and and the things that I've seen in the
42:38
last three years that I can't even believe I've seen in terms of um you
42:43
know what's happened to this country on a social level on a moral level let alone economics but mostly spiritually
42:50
socially and moral it ain't the same place that I remember right so you know if what's backing the dollar is the full
42:57
faith of the US government and that's coming into question not only let's not forget credit let's not forget the full
43:04
faith and credit so I mean yeah what is$ 35 trillion of debt right Andy $35
43:09
trillion of debt and growing uh full faith and credit of the US government which you know we've said is is waning
43:15
on the world stage and and also domestically and despite that we had
43:20
this whole bringing it back to the Petro dollar we had this whole Petro dollar deal to some degree propping this up now
43:26
you you say this is a very big deal but you know you could say we've already seen oil sold in other currencies right
43:34
um the expiration of this agreement is it that fundamental if according to JP
43:40
Morgan Chase around 20% of global oil in 2023 was brought and sold in on US
43:46
dollar terms so short of the Saudi saying we do not accept dollars anymore
43:53
which they haven't said and I don't think they're likely to say just to push back here is this really such a game
43:59
Cher that this Petro dollar agreement has expired if the trend had already be
44:05
gone yeah it is it's just that it's accelerating and again this is what I mean is that they do things methodically
44:12
it's one of these things that once you cross that line the immediacy of of
44:19
the reaction would be profound so I think it's more along the lines of doing things slowly and methodically and and
44:25
doing it the right way it is a big deal you know it used to be 100% okay now
44:31
it's 80% and even a bigger deal to me is the lack of of of using the treasury
44:38
market the the realization that holding treasuries is not only risky in a government that you know ultimately has
44:45
chosen inflation over austerity where rates ultimately have to rise even if the budget was the the the budget was
44:52
balanced you mentioned a 34 almost $35 trillion debt and remember trillion seconds ago was 31,6 188 years ago we
45:00
will inflate and rates will go higher because how the hell do you pay um uh I
45:05
don't know uh $99 trillion shortfall in Medicare Part B $22 trillion shortfall
45:12
Med Medicare Part D the prescriptions 77 trillion shortfall in Social Security
45:18
government military pensions the expansion of all of the welfare state you know if people should check out the
45:24
cloward Piven Theory blow your damn mind CL Howard Piven Theory I don't know if you've talked about it but this is a
45:30
very very very scary um similarity let's just simply say and if we have time to
45:36
talk about it we can but all of these unfunded liabilities that amount to nearly 200 trillion who's going to pay
45:43
for those who and who in their right mind is going to buy a a longterm a long
45:49
dated duration treasury in a country that is in essence broke who has chosen
45:54
inflation over austerity and the rest of the world is selling treasuries in order to buy Commodities so when you talk
46:01
about you know this being you know is this could this be not a big deal yeah it's all part of the same thing and I
46:09
think really what we are seeing is more along the lines of you know how do we continue to look the Congressional
46:15
budget office Michelle which is the last nonpartisan group in in in Washington said by 20131 100% of of in of tax
46:23
revenue goes to pay just the interest on this debt we're accumulating a trillion dollars of debt every 100 days just to
46:30
pay the interest and mandatory entitlement like Social Security but ask yourself this how does the West maintain
46:37
its Supremacy even militarily when military spending is discretional so we
46:43
have to borrow money to fund a military to go around the world coercing people ain't going to happen and and that
46:48
doesn't take into account the 17 million people who have entered this country illegally who's going to pay for their
46:54
their food their housing their clothing their their medical and you know um God
47:00
forbid that one or two% of them have bad intentions to this country every 1% is 170,000 people 5% is way bigger than any
47:08
standing military You could argue everything is different now in this country and it's starts with what
47:14
amounts to even if the majority of these people are seeking a better life at 5%
47:19
aren't you're talking almost a million people that want to disrupt this country so when you talk about buying gold and
47:25
silver or look looking at the reasons to do these things it's not to become wealthy it's because it is wealth gold
47:32
and silver are wealth and the biggest money in the world is proving that by their acquisition and their repatriation
47:38
the lack of trust is profound and the bigger question is how do we ever get that trust back and hopefully the new
47:44
Administration if there is God willing a new Administration without being political can can pull us out of this
47:51
nose dive but short of that I think we're in big trouble and that's why I tell people to own gold it's not to get
47:56
rich it's because it's it's something that's outlived everything the world's ever thrown at it and the big money
48:02
around the world seems to Echo that with their acquisition and repatriation well we'll get into a new
48:08
Administration and if that can perhaps reverse some of this damage but I want
48:13
to focus a little bit more again on this agreement because it's gotten very little coverage in the mainstream and an
48:20
argument that's being put out there is because it's not really such a big deal because it wasn't really an agreement in
48:26
the first place there was a big article in market watch quoting various economists saying that this is fake news
48:33
and they bring up Paul Donovan who's the chief Economist well fake news and the fact that this is a big deal that there
48:38
was this real agreement uh Paul Donovan Chief Economist at UBS Global wealth management uh he said that uh you know
48:46
there wasn't really this a proper agreement and they did accept other
48:51
currencies after the agreement at least for a year afterwards like the British pound and it was just an agreement on
48:57
joint economic cooperation and uh it was the Saudi Arabian Joint Commission on economic
49:04
cooperation it was formally established they do say that by Henry Kissinger as we've just discussed but that it wasn't
49:10
this like it only will deal with dollars exclusively and that it was intended to last only five years and then it was
49:17
repeatedly extended but not even that officially repeatedly extended and that there was perhaps this secret agreement
49:24
between the US and Saudi Arabia in 1974 which promised military aid and
49:29
equipment in exchange for the kingdom investing billions of dollars of its oil sale proceeds in in the US but they say
49:36
that you know there wasn't this official must be sold exclusively in dollars
49:42
Petro dollar agreement and therefore it's not a big deal and those talking
49:47
about it they're not in the mainstream media are fake news and conspiracy theorists and and trying to create
49:54
unnecessary Panic what what say you to that can I say horseshit because that's a bunch of horseshit as far as I'm
50:01
concerned I'm sorry if you have to bleep that out but that article I read and it talked again about the real the real
50:08
value is the US Treasury and where are people going to put their money look at what these countries are doing selling
50:14
treasuries and buying gold replacing it it's outperformed the bond market over 25 years by 100% it's doubled its
50:21
performance of the bond market with no counterparty risk and these these what
50:26
else are Wall Street analysts going to say this is their life we God forbid we actually think outside the box and these
50:33
analysts are wrong this is a massive deal it is a huge deal you can't get out of the way of what you don't see coming
50:39
and some of these analysts they've learned more and more about less and less till they know everything about nothing and they don't look at the world
50:46
with an open mind and I mean you don't even have to look in that much further than to that meeting that we just saw in
50:52
novag where 21,000 people attended from 139 Nations $80 billion in bilateral
50:59
deals were signed on the sidelines 59 countries have have have said they plan
51:05
to join bricks so yes it is a big deal regardless of what they are telling you
51:10
about the Petro Dollar Deal being a nothing Burger it is not a nothing Burger when you see Saudi Arabia decline
51:16
an invitation from the G7 to come to do to admit themselves and immerse
51:22
themselves in all of these organizations including project embridge which is a system that allows for trading outside
51:28
the dollar and the Swift system you are setting yourself or they we are setting ourselves up for a big letdown if we
51:36
believe that this is is non-consequential and what else are they going to say see this is where everyone
51:42
is focusing they are focusing on the bond market but gold is better than the bond market gold has no counterparty
51:49
risk and has outperformed the bond market for 25 years handily so the way
51:54
that these countries look at it is like why would ever want to hold those assets which are losing ground to inflation
52:00
it's a country that does not align ideologically with us and they are going to weaponize their treasury against us
52:07
and steal it and maybe even give it to the country we're fighting a war against you've crossed that line you don't come
52:13
back and these people who cling to this recency bias these normaly bias you know the old saying you have to roll with the
52:19
changes they're going to be rolled by the changes because they they can't see past I think what is a massive tectonic
52:27
shift it's just not bang in your face like that it's happening if you do the if you do the work and dig you can see
52:34
it if you actually have eyes open enough to to believe it Andy again just to play
52:40
Devil's Advocate um not saying I disagree but we had the chief Global investment strategist at Charles Schwab
52:47
Jeffrey kleintop uh saying that the end of the Petro dollar agreement between the US and Saudi Arabia is pretty
52:54
meaningless for at least three big reasons and I want to hear you count of these the global oil financing insurance
53:00
and transport system remains almost entirely dollar-based um one while oil
53:06
could be increasingly bought at or sold in other currencies Chinese Yuan Indian rupee Etc once the proceeds are received
53:12
by Saudi they are likely to be invested in dollar denominated assets treasuries rather than Yuan or rupe denominated
53:19
ones and there is about 10 times as much oil traded in Futures than physically
53:25
delivered and the Futures are denominated by dollars dominated and
53:31
denominated by dollars easy easy first of all you have the Shanghai you have
53:36
all of these exchanges that I think are are realizing around the world that that
53:41
the comx and the lbma are fugazi and you take a look at the amount of Leverage
53:47
that's being traded in all of these markets where and I'm going to answer your question but as an example on the
53:53
lbma they've admitted or the London bullion Market Association they've admitted aded that their contracts are
53:58
10 times what they report they're trading 20 million ounces of gold a day
54:04
well that would mean 200 million they're trading uh 290 million ounces of silver
54:09
that would mean almost three billion ounces of silver per day and it's all synthetic and this is where the tail
54:16
wags the dog well the same thing is true about oil how the hell do you get oil to ne40 a barrel in any real world while
54:22
you you do it on a on a Futures exchange with which distorts the price
54:27
and if you take a look at for example the bricks Grain Exchange where they came out and said all of these
54:32
Commodities and including including what what they've said about uh the Shanghai
54:38
Gold Exchange where the head of the Shanghai Gold Exchange 15 years ago said we produce and consume these Commodities
54:44
yet they're priced in the west and once we have the right to speak at the table the real price of gold will will be
54:50
observed same thing they said about the bricks Grain Exchange that the the Comax prices all of these Commodities and we
54:57
produce more grain than they do so at some point we are going to repic based upon demand and the same thing will be
55:03
true about oil that's the the third question uh the second question well
55:09
we've already said they're not going to go back into treasuries they will choose Commodities which are replacing in my
55:15
mind gold already has and oil already has replaced the treasury as a preferred
55:20
form of of of you know recycling these excess reserves into money that cannot
55:27
be taken away and what was the first question I'm so sorry will we repeat the first question again let me uh yes so
55:35
again he was saying that oil could be increasingly bought in other currencies
55:41
we we touched on that he was saying that the financing Insurance transport system is dollar based and again that the
55:47
Futures markets are dollar denominated and and dollar dominated yeah well the
55:52
fut infrastructure from from Futures to uh transport system financing and insurance dollar based right well the
55:59
Futures Market I believe ultimately will go by the way of the dodo bird because it's a system based upon all of this
56:06
leverage where it should you when the Futures markets were created it was is a
56:11
way to offset risk and it wasn't a way to outright speculate it was to offset
56:17
risk in in commodity holders or Farmers or whatever producers and I think what you will see is a transition from the
56:24
Western dominated markets the lbma and the comx look who just bought the London
56:29
medals exchange oh yeah it's the Chinese that's right they bought it that's the base Metals the like copper zinc they
56:36
understand what's going on they're playing the long game and and what did Putin just say about the countries that will come into the bricks fold they
56:43
wanted to be those that are in particular dealing with shipping lanes and look at the the Belt Road and look
56:51
at the north south Corridor and all of these things in both the bricks and the Belt Road that are connecting they
56:57
understand the significance of shipping lanes and and of of of having ways to to
57:04
move product that sidesteps the US Navy and sidesteps the the United States
57:10
interference so whether it be about Futures markets that are fugazi that will move to those countries that
57:15
produce and accumulate and utilize all of the Commodities the prices will be set over there whether it talks about
57:21
all of the excess going into treasuries and that's the main argument that is a dying argument and I think zultan posar was right this
57:29
is Bretton Wood's three give me the gold I don't want your promises of of of treasuries that can be rehypothecation
57:36
that can be uh watered down that rates can go up we can default we can inflate
57:41
we can confiscate fugazi that's moving out and and every single argument that
57:46
these people throw out I don't care what their title is how how how uh
57:51
prestigious it is to be the head commodity guy at at at Schwab or wherever you said I don't care they none
57:58
of them are looking at things through any any other lens than what they have
58:04
achieved success in and I don't think that that they're looking at things the right way they're going to get run over
58:10
by this with that type of mentality and you can see that's exactly what the the bricks and the Chinese and the so all
58:17
these countries that's what they are counting on because of that you don't see people rushing to crowd them out of
58:23
their trade into gaining uh entrance into all of the Commodities and buying all the gold and standing for delivery
58:29
this is all being done by the other countries around the world who are using this ignorance and this dollar-based uh
58:37
recency biased against us including using the suppression of the Futures
58:42
markets where we can create distortions and Illusions in in World Commodities
58:47
like that by re hypothecating and Commercial Banks throwing billions and billions and billions of dollars in
58:53
hedge funds doing the same thing to distort real value prices of Commodities and that will be used against us and it
58:59
is being used against us right now just like we saw recently 500 million ounces
59:05
or $500 million worth of gold delivered to Brinks Hong Kong where in 2015 comex
59:10
put up a a um a new contract where you can deliver comx contracts to Hong Kong
59:16
to Brinks which is a comx facility through what's called exchange for physical those bars get trucked over to
59:21
the Shanghai Gold Exchange and sent out to the world this is happening and it is being IGN Ed by the mainstream
59:27
completely and totally and the worst thing that you can do is listen to these people who have no idea what's happening
59:33
around the globe and you'll be far better off than listening to you Michelle and all the guests you have on your show not just me but all of them
59:40
who are saying things that are more Illuminating and more real than these so-called experts who who are talking
59:47
about things that I think perhaps are really changing from the way they used
59:52
to be so I appreciate uh the endorsement uh there andy I know we're getting into
59:59
the the weeds here and we will continue to explore further but you know uh big picture since it's happened
1:00:08
and again we've just explained why I mean the dollar has gone up you know according to the Dixie um it's it's it's
1:00:14
up what 0.7% in the last five days or so up over 1% in the last month up 4.1%
1:00:20
year to date dollar ear getting stronger again um this is according to how it's measured against to boset of other
1:00:27
currencies six other currencies which arguably should be updated because it hasn't been updated for a while in terms
1:00:32
of the currencies in that boset but the bigger picture Andy is you know the argument has always been yes yes yes but
1:00:37
the dollar is still the best of a bad Bunch cleanest dirty shirt in the dirty cleanest shirt in the dirty laundry
1:00:43
basket can't be replaced what will replace the dollar and then we go to this you know potential commodity backed
1:00:51
bricks currency right that's the answer to what will replace the dollar so give
1:00:57
us a sense of where we are with that what's the progress on that where are the breaks with officially coming up or
1:01:05
putting together this plan I mean I don't I don't know where exactly they are we know they're working on it the
1:01:10
finance ministers have told us that and I think Jim is right when it will be all
1:01:16
about a a mass adoption by enough countries whereby they have 59 or 60 or
1:01:21
100 countries to go shopping in for goods and services not just the 10 that we see but more relevant what about the
1:01:28
West's response you know when I first met you and we did that interview you asked me what could change this and I said well there was just a report that
1:01:35
came out by the IMF saying it was called gold A barbarous Relic or gold an
1:01:40
international Reserve currency comma A barbarous Relic no more you had crystalina georgeva the head of the IMF
1:01:47
come out and say if a cbdc not pegged to something would just be Fiat what is the only other tier one asset gold how do I
1:01:55
think that there's very high probability that you also see the west or the IMF issue some form of a digital currency
1:02:02
also pegged to Gold using distributed Ledger technology and gold showing the veracity and the immutability on The
1:02:08
Ledger and backing it so I don't know where they are but they we are moving in that direction there is no question
1:02:14
about it we keep getting uh updates from the the finance ministers that indeed
1:02:20
this is what they are working on and they want everyone to come back to the meeting here in August in Russia and
1:02:25
Report their findings but I think indeed when you see these are the countries that have been massively accumulating it
1:02:31
for a long time and repatriating it that it is on the docket it is how you
1:02:37
inspire confidence but not until it's time so what have they been doing in the meantime trading in local currencies and
1:02:43
and and buying gold and oil instead of us treasuries they're not going to tell us exactly when they're going to release
1:02:49
it until they release it but I think any system any system whether it be from the
1:02:54
west or from the the rest of the world that wants to have credibility has to be something where immutability and
1:03:00
veracity come together that's gold and blockchain Technology it doesn't have to be um redeemable because deal from
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France proved that convertible currencies convert but if you show the immutability on a blockchain you have it
1:03:15
audited by independent Auditors where there is indeed the the inspiring of
1:03:21
confidence and veracity you have a shot and whether it come from the west or the rcks first I don't know but I will tell
1:03:27
you in my heart and in my soul I know that there will never be another Fiat completely Fiat based system trust ever
1:03:34
again you can only pee in the punch bowl so many times before people stop drinking the punch and I think now you
1:03:40
have to just start all over and that starting all over comes with trust and
1:03:45
Trust in immutability would be things like Commodities and blockchain so don't know where it is but I know they're working on it and I think Jim is right
1:03:53
it will be something that they will issue once they have countries that represent a large enough swath of human
1:04:00
population in order to issue it safely and know that it will will work the first time out so Andy you're saying
1:04:08
regardless the era of fiat currency is done and again Fiat means by decree
1:04:14
Latin for by decree and essentially currencies you know backed by nothing what is the timeline and I always ask
1:04:21
you this and it seems to accelerate every time we speak but but you see you
1:04:27
know what is the ultimate fate of the dollar that you're seeing here and under what timeline Play Play that out for us
1:04:34
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