Edging Towards a Gold Standard Tuesday, April 12, 2022

Alasdair Macleod, Quinton Hennigh and Michael Oliver return as guests this week. Few people understand that the dollar became the world’s currency because of an agreement between the Nixon Administration and Saudi Arabia not long after Nixon detached gold from the dollar and the international monetary system in 1971. The agreement was for Saudi Arabia and OPEC to demand payment for all international oil sales in U.S. dollars, thus ensuring a constant and growing demand for dollars. Soon thereafter not only oil, but virtually everything that sold internationally, was denominated in dollars. The U.S. Treasury and Federal Reserve were free to create endless amounts of dollars out of thin air that Americans could use for generations to buy the world’s goods. It enabled America to live beyond its means since 1971 to consume and finance the greatest military might the world had ever seen to bully its way into foreign lands. But with Russia now making a similar move by demanding that “unfriendly” countries pay for life-necessity gas imports with Russian rubles, the days of America’s currency dominance are nearing an end. Russia is likely not seeking to own the world’s reserve currency, but that announcement very quickly allowed the ruble to return to its pre-Ukrainian invasion in just a matter of days. Russia, which can count on more than 50% of the world’s population living in “friendly” countries, including giants like India and China, appears to be in the driver’s seat economically, if not militarily. Alasdair will explain why, in time, the winner of this financial battle will most likely be gold meaning that gold denominated in dollars and other fiat currency is likely heading to much, much higher levels. Quinton Hennigh will join me to update us on Eskay Mining with its emerging world class gold and silver discovery in British Columbia and Michael will provide his latest momentum and structural analysis of the debt, equity and precious metals markets.