Gold Revaluation, Market Manipulation, and the Future of Money
In a recent episode of the Money Metals podcast, host Mike Maharrey sat down with veteran journalist and author Stuart Englert to delve into the topics of gold revaluation, the manipulation of precious metals markets, and the broader implications for the financial system. Stuart Englert, best known for his book Rigged: Exposing the Largest Financial Fraud in History, has dedicated years to dissecting how the monetary system has been twisted to favor fiat currencies while compromising the integrity of sound money principles.
Englert, a multifaceted individual whose talents extend to music, journalism, and investigative writing, graduated from Indiana University’s School of Journalism. With a career that spanned roles in newspaper reporting, magazine editing, and literary exploration, he has honed in on financial market manipulation, media landscape shifts, and societal transformations throughout his work.
The notion of gold revaluation lies at the crux of the conversation, referring to the legal resetting of the official gold price. Throughout history, the U.S. government has initiated gold revaluations on four occasions – in 1884, 1934, 1972, and 1973 – each time elevating the official price. Notably, the current official price of gold, set by the Par Value Modification Act of 1972 during President Nixon’s era and validated in 1973, holds steady at $42.22 per ounce while the market price of gold has soared to approximately $2,900+ per ounce.
Englert elucidated that gold revaluation offers the government an avenue to bolster the book value of its gold reserves, enabling an expansion of its balance sheet, heightened borrowing capacity, and efficient debt management. However, this move could potentially produce a side effect of devaluing the U.S. dollar, given that gold is typically priced in national currencies.
Further exploration with Maharrey unveiled how the Federal Reserve’s monetary strategies have paved the way for an ever-expanding U.S. government by endorsing borrowing and spending through recurrent dollar devaluations. Drawing historical parallels to ancient Rome’s coin-clipping practices aimed at currency devaluation, the conversation navigated towards the implications of gold revaluation and inflationary monetary policies, highlighting the ripple effect on the average individual. While gold holders could stand to gain, those who solely rely on fiat currency could witness a diminishment in their purchasing power as inflation gnaws away at their savings.
Englert painted a picture of the U.S. standing at a crucial intersection within its monetary system, underpinned by an unsustainable national debt and five decades of trade deficits. Proposing that a robust dollar poses obstacles to U.S. exports, he hinted at a possible role for gold revaluation in addressing trade imbalances. While conjectures vary regarding the quantum of gold that might necessitate revaluation to reflect the true state of the financial system, some experts like James Rickards have projected figures as lofty as $20,000 per troy ounce, if not higher. Although Englert refrained from specifying a number, he concurred that as the money supply and debt balloon, the value of gold is bound to appreciate.
Recent trends have indicated an upsurge in central bank gold acquisitions over the past few years, surpassing 1,000 tons annually, marking a drastic increase from the previous decade’s average of 450-500 tons per year. Emerging markets like China, India, and Eastern European nations have spearheaded this movement, signaling a declining trust in the U.S. dollar as the global reserve currency.
In a stimulating discourse peppered with historical analogies, the conversation circled back to key junctures in U.S. history when pivotal decisions around gold were made in response to overarching issues such as government overspending and war debts. Englert underscored the intricate linkage between debt and conflict, shedding light on historical instances where governments manipulated monetary systems to fund military pursuits, entrapping their citizens further in debt.
The interview also dwelt on the contentious issue of gold price suppression through paper markets. Englert contended that derivatives and gold Exchange-Traded Funds (ETFs) served as mechanisms to artificially depress gold prices, creating a facade of stability for fiat currencies. Additionally, a narrative aimed at dissuading physical gold ownership has been perpetuated by financial personalities such as Dave Ramsey and Suze Orman, subtly nudging investors towards ETFs, a situation that Englert believes satiates the interests of those reaping the benefits of market manipulation.
As the conversation delved into the realm of inflation, Maharrey and Englert dissected the conventional misrepresentation of inflation, particularly through the official Consumer Price Index (CPI) lens, which often fails to capture the actual impact on consumers. With grocery prices witnessing a substantial hike, Englert underscored the growing difficulty in maintaining the illusion of dollar stability, as everyday Americans bear witness to the erosion of their purchasing power.
