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Two events, while not directly related, are likely to occur somewhat simultaneously, because of their close relationship link. I am referring to a global reset of the world’s official gold price, for the purpose of valuing nations’ monetary reserves. I have written previously about using the changeover from one year to the next, and while there is nothing magical about year end, it marks a perfect time to make such a change. One of the reasons for the FED’s abrupt pivot could possibly be to get in front of such a pending development. As I have said in my recent posts on the subject, the US may or may not join in the official repricing, but they will likely, at least accept and recognize it, since they really have no choice in the matter. The second, more important and likely more significant developement, is the end of the silver price manipulation and the resulting turmoil that would engulf the financial markets. While there is nothing that says they have to occur at the same time, the move up in gold should provide the needed catalyst to propel silver over $30, which will lead to an eventual run to $50 and above. The Comex and LME are basically out of silver and real price discovery will finally take place,(probably in Shanghai) after over fifty years of suppression. 2024 should be both exciting and challenging for those of us still around to experience it.
Given the Basel III agreements have been largely implemented over the years prescribed for doing so and the volumous purchases of gold by many of the world’s central banks, raising the Official price of gold is just a formality. With the enormous creation of fiat currency and debt by most nations, a new base price in the neighborhood of $2400 per ounce would seem appropriate. The BIS and major central banks could set that as a floor with an unofficial ceiling of say $3000 per ounce to be defended by interventions. Many may say the US is likely to resist. I ask, why would they? Most of the world already realizes the US dollar, while still the reserve currency, is losing a large share of international transactions in global trade and with the emergence of the BRIC’s, China doing currency swaps with numerous countries and many of the Middle East oil producers moving away from the dollar, it’s days are numbered. If The US goes along, at least as far as accepting, if not endorsing, the new official price, they can continue to hold onto the myth that they are still one of the largest holders of gold and therefore have the higher level of reserves that the new gold price would imply. So while the US may not be happy with this trend, it has already occurred from it’s profligacy over the 50 years since depegging the dollar from gold. All that awaits now, is the Official announcement.
Great stuff CM.
Watching for this to unfold
One would think it is either now, or never!