That’s a sentence that should perhaps be flashed repeatedly, in 20-foot-high letters, on the massive electronic billboards in Times Square. Under those rather generic terms, “economic and political instability”, read details such as inflation, the decline of the US dollar, politicization of government agencies, and the economic rise of China…just to name a few.

Warning – this isn’t going to be a “happy” article. Instead, it’s going to be an article primarily about the collapsing Western economies, the transfer of economic power from West to East that’s taking place, the looming “Great Financial Reset”, and basically about how we should all “buckle up” for the ride through the next 10 (or 20) years.

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One important way to “buckle up” financially is by investing in gold (and silver). Gold has been skyrocketing in value, while those paper US dollars in your pocket (assuming you still have some in your pocket) have been losing purchasing power at an alarming rate. The cumulative effect of inflation over just the past four or five years has resulted in the prices of nearly everything being about 20% higher than they were pre-pandemic.

I never get tired of quoting J.P. Morgan’s famous declaration that, “Only gold is real money – everything else is credit.”

“Only gold is real money – everything else is credit.” – J.P. Morgan

Trivia tidbit: John Pierpont Morgan preferred to be called by his middle name, Pierpont – I guess John was just too ordinary for him.

The “Great Financial Reset”

Somehow, I doubt that the “Great Financial Reset” is going to be all that “great” for most people. But whether it is or it isn’t, yes, some kind of huge financial reset is coming. It’s virtually all the World Economic Forum (WEF) and the International Monetary Fund (IMF) can talk about. Kind of scary, the way they’re greedily rubbing their hands together in anticipation of it - like it’s a good thing.

Well, news flash: It isn’t a good thing. It’s a bad thing. It’s the consequence of the majority of Western nations having money-printed themselves into an, ultimately, completely untenable financial situation.

At the head of the pack is the “leader of the free world” – the good old United States. Ironic that the level of freedom in the “leader of the free world” is declining at an alarming rate, replaced by cancel culture, pandemic lockdowns, and Big Tech’s control – in a hand-in-glove partnership with the US federal government – of what information you are, and aren’t, allowed to see.

Here’s the essence of the situation, boys and girls: the level of US debt has reached a crisis level. The federal government now has to borrow more money every month just to pay the interest on the national debt. The interest expense is now THE largest expense of the government, except for Social Security – and it will eventually skate on past Social Security, too. How fast is it growing? In 2019, the interest on the national debt was $587 billion – just four years later, 2023, it had nearly doubled, topping $1 trillion.

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In order to help you understand just what a gigantic financial pickle the government has gotten itself into, try translating it to personal level. Think about what your financial household would look like if the following was your situation:

1. Your income isn’t enough for you to even pay the monthly interest charges on your credit card debt…and your total debt is growing every month
2. There’s no way to significantly increase your income (there’s no way the federal government could raise taxes to a point where it would make a significant difference in its ability to service its current – and increasing every month – level of debt)
3. There’s also no way to significantly reduce your monthly expenses (virtually no one in Washington has the necessary political willpower to substantially reduce the level of government spending – which, like the debt and the interest expense, is continually increasing)

What would your financial future be looking like in that situation? – Well, friends, that’s exactly what the barrel of the financial gun pointed at the US government looks like right now.

And the situation is essentially the same for the other major Western nations, such as the UK and France. (I was going to say “major Western powers”, but referring to them as “powers” at this point is kind of a joke.)

So, while the government can continue to stumble along for a bit with the Federal Reserve just printing hundreds of billions more pieces of paper stamped, “In God We Trust” – in the long run, the situation is just unmanageable. Thus, a “Great Financial Reset” is eventually going to be not just an option, but a requirement.

What Will the Great Reset Look Like?

What is that Great Reset going to look like? – We don’t yet know. We’re kind of in that situation where you’re walking through the basement with a flashlight, and you haven’t yet seen what the monster lurking down there looks like.

Whatever it is – it’s not going to be pretty. One of the most frequently mentioned possibilities involves the creation of central bank digital currencies (CBDCs). Now, at first glance, some fans of crypto may think that sounds potentially good. Official government adoption of cryptocurrency would boost the legitimacy of Bitcoin and other cryptocurrencies, right?

Yeah, well, here’s the thing…there’s a big difference between privately-issued cryptocurrencies assets and what would be a government-issued cryptocurrency. A BIG difference. One of the most commonly touted advantages of privately-issued cryptocurrencies like Bitcoin is financial privacy. Government-issued CBDCs would represent the polar opposite of financial privacy. They would give the federal government the immediate ability to track your every financial transaction – everything you buy or sell, every dime of income you have.

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CBDCs would also instantly grant the government the power of capital controls, the ability to regulate what you’re allowed to buy. What’s that? – You want to buy some meat? – Tough. You’ve exceeded the allowable individual level of hamburger and steak purchases for the year. Or let’s say that things started looking really bad in the US, and you were thinking about initiating your “Plan B” – moving you, your citizenship, and your assets to a different country. Well, what you might be shocked to be confronted with could be, for example, the government shutting off your access to buy a plane ticket to get the hell out of Dodge. “Sorry, ma’am, you sorry opponent of transgender surgery for 10-year-olds, but we have removed your access to make this purchase.”

Don’t think they’d do things like that? Don’t be naïve - wake up and smell the coffee. You probably – until they actually did it – never thought they’d outlaw your ability to light up a cigarette in a bar…or make you stand in line for an hour, limit your shampoo bottle to three ounces, and face a possible strip-search, just to get on an airplane.

Another possible solution that’s been floated is some kind of return to the gold standard. Is it just a coincidence that all this talk about the coming Great Financial Reset has been accompanied by record gold buying by central banks all across the globe? Or do they maybe have some inside information that we don’t have about how this “reset” is going to work?

One option is, not a full, but just a partial return to a gold standard. That would have a nation’s currency partially backed by gold. That appears somewhat more feasible than a complete return to a gold standard. If, for example, the US dollar was going to be, say, even just 20% backed by gold, that would rocket the per ounce price of gold to…well, I can’t even really calculate that, but it would definitely be A LOT higher. That’s because the total value of a country’s gold reserves would have to equal 20% of the country’s total currency in circulation. Well, the current US M2 money supply is more than twenty thousand billion dollars. Yeah – it’s so high, you can’t even state it using normal numbers.

Economic Power is Shifting from West to East

The US and other Western nations are trying to stave off inevitable economic disaster by just printing endless reams of fake money. Meanwhile, China, Russia, and the ever-expanding group of BRICS nations are busy forging a new, anti-dollar economic alliance.

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China and Russia didn’t start this financial war – the US did, with the heavy-handed financial sanctions that it imposed on any country that did something it didn’t like. The latest, and among the most severe, of these were the 2022 sanctions against Russia for its invasion of Ukraine. Those sanctions included effectively shutting off the access of Russia’s own central bank to more than $600 million in foreign reserves. That was the proverbial straw that broke the camel’s back.

Can you imagine? – What if they’d done that to us? What would your reaction be to reading a headline in the Wall Street Journal, “Russia blocks Federal Reserve’s access to $600 Million of its Own Money”? Russia determined to never again be exposed to the US dollar or the actions of US financial authorities.

The US sanctions also included blocking Russia’s access to use SWIFT, the primary system used to transfer money from one bank to another. Well, no problem – Russia has since established its own money transfer system.

And, unlike the US and other Western nations, Russia is now completely food and energy self-sufficient. In contrast, the US, with its woke climate change agenda, has shot itself in the foot with policies – such as blocking any permits for new oil and gas drilling – that have flipped the country from being energy independent and a net exporter of oil and gas to having to import oil and gas. Yes, we’re now once again at the mercy of the whims of the OPEC nations in the Middle East.

Pushing Toward a Renewed Gold Standard

Russia, China, BRICS, and other nations (such as Turkey and Saudi Arabia) are engaged in constructing an alternative, anti-USD economic power base. This movement is gradually unseating the US dollar as the world’s major reserve currency. And at the heart of this new economic powerhouse – which stretches all the way from China to countries in South America – sits GOLD.

Example: In 2022, Iraq sold about $40 billion worth of oil to China. In the past, the Chinese, like the world’s other countries, had to pay for oil using US dollars, under the long-standing “Petrodollar” system. But now Iraq accepts payment in Chinese yuan. One reason for this shift is a clever inducement that the Chinese offered – Let us pay for oil using our own currency, the yuan, and we’ll give you the option to convert those yuan payments into gold. Naturally, the Iraqis said, in a heartbeat, “Okay – that’s a deal.” In effect, China is offering the oil-rich Middle Eastern nations the opportunity to sell their oil for gold.

China has, historically, been shown to be the country most inclined to take a “long game” view with its financial foresight. It has been increasing its gold reserves, buying gold at an ever-increasing record pace, for the past quarter of a century. And it, Russia, and many other nations, while stocking up on gold, are dumping US Treasuries by the billions.

Here’s a snapshot of the global gold buying frenzy:

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Some market analysts are predicting that – as soon as August of 2024 – the Chinese may officially announce the yuan as being backed by gold. The BRICS nations have continually been in talks over the past few years about creating a new gold-backed currency for international trade.

And here’s a news flash from Russia: “Russia proposes a new international standard for trading in precious metals: the Moscow World Standard (MWS), which will become an alternative to the London Bullion Market Association (LBMA), which systematically manipulates precious metals markets to depress prices. According to Russia’s Finance Ministry, this new, independent international structure is…‘critically important’.”

While China and other nations make a push toward real money, with a renewed gold standard, the US and other Western nations just continue printing phony fiat currency notes at such a pace that it’s surprising they haven’t run out of ink.

Ignoring Reality Isn’t a Good Financial Plan

The US continues to pursue disastrous economic policies like killing its own energy independence and, apparently, doing everything it can to make sure that it’s a non-participant in the newly emerging dominant international trading economy. Among the many “wonderful” accomplishments of President Obama was an economic foreign policy that ended up effectively shutting the United States out of being involved with ASEAN (the Association of Southeast Asian Nations), which created the Asia-Pacific economic alliance known as the Regional Comprehensive Economic Partnership (RCEP), which now represents the largest trading bloc in the world. In 2022, it generated approximately $10.2 trillion in GDP – about 7% of total global GDP. In 2024, it’s overwhelmingly dominant, accounting for 30% of global GDP. (The RCEP includes China, Japan, Australia, and South Korea. China is, obviously, the “big dog” in the group.)

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By the way, I have a question: Why did no one stand up when Obama promised to “fundamentally change America”, and yell, “Hey, wait a second – Why do we need to fundamentally change the greatest country on Earth?” Well, we got fundamentally changed all right.

For one thing, the Obama Administration helped to usher in the current world where reality got traded in for woke feelings – for example, forcing all US intelligence and legal agencies to delete, and never again use in any government document, the phrase “Muslim extremists”. Yeah, in the new, fundamentally changed America, there’s no such thing as a Muslim extremist. There is not a single Muslim in the world who is an extremist. None. Nada. Nope, not even one. To think otherwise would make you a racist xenophobe.

I’m reminded of the words of the great jazz poet, Gil Scott-Heron – “We’re living in a turnaround world, where things are all too quickly turned around. Things were turned around so that up looked down, wrong looked right…We longed for those thrilling days of yesteryear, when the good guys always wore white hats, and all American men were like Hemingway.”

What? – You think that perhaps I digress? – Not so, grasshopper. The increasing boldness with which our overlords in the federal government look at something that’s “black” and shamelessly pronounce it to be “white” – like, for example, telling us that advocating secure borders is racist hate speech, or that “the economy is doing great!”, is one of the significant contributing factors to our current woeful financial situation.

Rather than facing the harsh reality of our current financial crisis and actually trying to do something about it, the government continues to ignore it and just tells the Federal Reserve to crank out another few hundred billion dollars in Monopoly money. But ignoring reality isn’t a good financial plan.

Protect Yourself with Gold - the Coming Financial Storm - Conclusion

Gold is, and has always been, the real money safe haven from economic disaster. It increases in value as investors increasingly lose faith in government-backed fiat currencies. Gold remains a scarce, finite resource. Unlike fiat currencies, it can’t just be cranked out at will. Here’s a noteworthy fact to keep in mind: While countries such as China and India are buying up more gold than is being mined each year, it takes, on average, about seven years for mining companies to respond to increased gold demand with increased production. Like the ancient city of Rome, gold mines aren’t built in a day.

Here's something else you may not be aware of: It’s a somewhat rare phenomenon for gold prices to rise globally - in multi-currency terms. But that’s precisely what’s been going on for some time now. If you think the price of gold is high in US dollars, well, it’s risen even higher in terms of other currencies. For example, the per ounce price of gold in Australian dollars is currently $3496.45. That’s nearly double what it was at its 2020 high of around $1,850AUD. (In contrast, the USD gold price is only about 15% higher than its 2020 high around $2,000 per ounce.)

China and India – each with populations of over one billion people and a growing middle class – are at the center of the next great economic empire. After all, money goes where there are the most people, buying the most stuff. China, India, and Russia were the basic building blocks of the BRICS alliance, but the BRICS trading bloc is continually expanding with new members. And from the looks of things, this new economic alliance likes “real money” (i.e., gold and silver) a lot more than the fiat currencies of financially beleaguered Western nations.

And that, my friends, is one of the main reasons why smart investors all across the globe – people such as Ray Dalio, Paul Tudor Jones, and Stanley Druckenmiller - are building their financial future by investing in gold. There’s a global financial storm coming – protect yourself with a solid gold rain hat.

• J.B. Maverick

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Sources:

https://capitalistexploits.at/something-bullish/

https://fred.stlouisfed.org/series/M2SL

https://internationalman.com/articles/you-cant-taper-a-ponzi-scheme/

https://capitalistexploits.at/a-forecast-for-the-next-decade/

https://internationalman.com/articles/the-rise-of-the-global-south-and-the-foundation-of-a-new-currency-system/

https://internationalman.com/articles/heres-why-power-is-shifting-from-west-to-east/

https://internationalman.com/articles/heres-why-these-troubling-trends-mean-mass-chaos-is-likely-coming-to-the-west/

https://unctad.org/news/asia-pacific-partnership-creates-new-centre-gravity-global-trade

https://www.visualcapitalist.com/shifting-global-economic-power/

https://www.ig.com/en/trading-strategies/what-are-safe-haven-assets-and-how-do-you-trade-them--181031

https://www.visualcapitalist.com/u-s-debt-interest-payments-reach-1-trillion/

https://cryptoslate.com/bahamas-to-provide-cbdc-access-via-commercial-banks/

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