Transcription
Yeah. [Music] Heat. [Music] [Applause] [Music] Warning. This video and all other videos on this channel are for entertainment purposes only. The content of this video and all other videos on this channel are the opinions of the creator only and do not constitute legal, trading, investment, or financial advice of any kind. Investing carries a high level of risk, and the majority of retail clients lose money. Do not invest in capital unless you understand the risks and you are prepared to lose it all.
All right. Hello and welcome to Camel Finance. I'm your boy Camel, and welcome to the week. Welcome to Monday. Since there are no real changes from the charts from the weekend's deep dive video we posted on Saturday, I thought it would be a good time to revisit a long-term call of mine for five-figure gold ounces.
The first thing I wanted to point out was if we go all the way back to my oldest videos, okay, the fourth video I ever posted on this channel over 3 years ago was this one right here, "The Case for Five-Figure Gold." You can see in the thumbnail, 20k gold with some question marks. So, this has been a very long-term idea of mine, and that what we would see going into the end of this decade is the US government, the Fed, the Treasury revalue gold higher in order to fix some of the debt issues. And this idea is now catching on a bit. I'm seeing more and more people play with this idea. So, I thought it would be a good time to revisit it and add some details. I have also raised my target for gold, which I believe is one of the highest targets I've seen. And the idea behind this is actually pretty simple. And as I often say, right, ideas are bulletproof. So what is the idea? The idea is they're going to revalue the gold higher and use it to balance some of the books. More specifically, they're probably going to use it to wipe out the yields deficit. So that's what I want to focus on today. We know we've got about 37 trillion of debt, and we know that we're running a $2 trillion plus deficit in the US.
But why is this important to you? Central banks are positioning into gold. Anyone that has been following this space for any length of time at all knows that we have seen record central bank buying of gold over the past few years. We've also seen the central banks changing laws. And now there's a bit of speculation and there's a bit of misinformation around this whole gold being a tier one asset. Just so you know, tier one essentially means risk-free. And there's been a lot of headlines about this where after the Basel 3 events, they changed the gold status for physical bullion held in their own vault to tier one. Meanwhile, they put paper gold, gold derivatives, ETFs at all as a tier three asset. But there has actually been a little bit of misinformation or mispeculation about this. So, as of July 1st of this year, gold was reclassified to a tier one asset, but people have been getting a little bit mixed up between capital rules and liquidity rules. So, the Basel Capital Accords have prescribed a 0% risk weighting for gold, which is the same treatment applicable to cash. But this is true for all three Basel Accords. The rule states that gold held in the bank's own vault is deemed to be tier one with a zero risk weighting. So it's not all gold in general. It's only the gold they hold themselves. And this is where a little bit of the confusion has come. And whilst different central banks around the world have got slightly different end targets for the completion of moving it to a true tier one asset, not just tier one for the gold they physically hold themselves, we can see that this is coming in the not too distant future.
So the first thing I want to note here is that they wouldn't be doing this for no reason. Okay? I think they're doing this because they know what's coming. They know about this revaluation. And so, is this important to you? Well, if central banks are buying record amounts of gold, if they are changing legislation to make this gold a true tier one asset, meaning zero risk for physical bullion, you get to decide whether you want to stay away from this trade or whether you think it might be worth copying what these central banks are doing.
From a technical perspective, we are also very early in the 8-year cycle, as you can see right here. It has very consistent 8-year cycle lows. And we're not even halfway through this current 8-year cycle. Also, notice we tend to spend a lot of time consolidating for gold. This is about 13 years here. This is about double that here. But once it gets moving, it covers a lot of ground very quickly. And I'm still making the case we are extremely early in this 8-year cycle, and there's a lot of ground to be made up from a technical perspective. So again, we get to choose whether we want to ignore this trade or whether we want to look around and say, "Maybe these guys know something, and maybe there is opportunity to exploit what they're doing in plain sight."
So I've got a few facts and figures here for you for the next part of this. Okay, the USA currently owns around 262 million ounces of gold with a book value of $42.22 per ounce. That's all. Which means, according to the book valuation at the moment, okay, they are only valuing this gold at about $11 billion. However, given the price of gold is currently trading at about $3,300, it means they're actually sat on somewhere around $860 billion worth of gold. And again, their book value, because it's only valued on their books at $42 an ounce, sits at just $11 billion. Now, as a side note, if they were going to revalue gold to $15k, that would actually be $4 trillion of assets on their books. And at $42k, it would be around $11 trillion.
Now, this idea, as crackpipe as it might sound, is actually not that insane because we've seen them do this exact thing before. Those of us that know our history know that back in 1934, there was something called the Gold Reserve Act. Now, rather than read through this entire thing, I've made you guys some cliff notes here. And this is essentially how that Gold Reserve Act played out. The Fed gave the US Treasury their gold and got an IOU called a gold certificate in exchange. Now, today, that gold certificate is still the first asset listed on the Fed balance sheet. However, the Fed cannot actually redeem this IOU. Only the Treasury can decide to redeem it. And when they do, keep in mind, as I said earlier, it will be for the current book value, which is $42.22 per ounce, or $11 billion for around 262 million ounces of gold.
So once that gold had been handed from the Fed to the Treasury, the following day, the very next day, the USD was debased by over 40%. Now, not by printing, which is what, of course, we're used to in the modern times in the C19 era. Everybody knows they bazooka'd the money, they printed a bunch of money, they did the whole QE bomb, but that's not what happened during 1934. Instead, the way they debased the currency by 40% overnight was by changing the value of gold on the books from what was $27ish at the time to $35ish. Now, I've got here "explained debasement" just in case anyone's not really following here. So, overnight we went from $27 book value for an ounce of gold to $35. Meaning, it took more of each dollar to buy the same weight of gold. Right? Where it used to take $27 to buy 1 ounce of gold, overnight it was then going to cost you $35 to buy that same gold. So therefore, it took more units of currency to buy the same weight of gold. We essentially diluted the gold weighting per dollar by about 40% overnight.
And so keep in mind how these currency cycles tend to work. Okay, step one, we have a currency that's fully backed. Step two, some time elapses, and we devalue it by reducing the amount of weight you get per unit dollar. Then eventually, like we saw in 1971 in the US, we take the gold backing away altogether. Then some more time goes by, and they eventually inflate this currency by bazookering money at it, just like we saw during the C19 era, only for this thing eventually to end up being inflated to death, and then you get a new currency, a rising power come in, take over the world reserve status, and we go all the way back to step one. Now, we've seen this time and time again through history. It happens roughly every 80 to 100 years. One of my favorite facts is that the reason the pound in the UK is called the British pound sterling is because it was once backed by one whole pound of sterling silver. So again, these currencies, like in the GBP for example, start backed by something in its entirety. Like I said, in this case, a pound of sterling silver. Eventually, we move to having less silver back in the pound. Then eventually there's no silver back in the pound. Then they bazooka the money and print this thing into infinity. And then we get to the final stages where a rising power takes over the world reserve currency, and we do the whole thing all over again. So this was simply step two, right? We started with a fully backed dollar, and then we started to dilute the amount, only for again us to get to 1971 and have no gold backing.
I've also left myself a note here to tell you guys a quick story about a 16-year-old, cuz I thought you would find this interesting and somewhat pertinent. So, my brother has a 16-year-old employee that works for him, and he gave him a £5 note here in the UK. And he told him to pop to the local shop and get some toilet paper. And the 16-year-old replied, "What, with a fiver? Is that enough to buy toilet paper?" And so my brother said, "Yeah, of course that's enough. I only want four rolls." And so this 16-year-old said, "Yeah, but you can't get anything for a fiver nowadays, can you?" And my brother, who is also a Bitcoiner, was telling me about this and saying how wild it was that for 16-year-olds nowadays, their entire paradigm is that you need at least £5, if not more, to buy even one small item from our shops over here. That is the level of debasement of currency. We've been experiencing that now the youngsters really think you need at least six pounds or more to get hold of anything from a shop, which again fits to the idea that we are much later in this whole currency cycle than most people are willing to entertain.
So, back to the history lesson. Okay, this overnight debasement, revaluing gold from $27 to $35 an ounce, netted the Treasury $2.8 billion in profit overnight. The Fed was essentially stolen from, left with an IOU they could not redeem, while the people, the masses, suffered from 40% less purchasing power overnight. Countries around the world also saw this as an act of financial war, since they're all holding this safe haven, or perceived safe haven, that was the dollar, and then woke up to a 40% debasement overnight. Okay, so the USD was not so safe after all.
So how does all of this tie in to today? Why is this important? Well, because today we've actually got a very similar situation. The interest payments on said debt are one of the biggest expenses for the USA. The USA is broke. Okay, if it was a household, it would be declared bankrupt. Households are not allowed to operate with these kind of deficits, with this kind of debt problem. You're not allowed to continuously take on more debt that you can never pay off. If it was a household or a business, it would simply be declared bankrupt and shut down. We know the debt is over 37 trillion and continues to accelerate. And as if that's not bad enough, around 1/3 of its debt needs to be refinanced over the next four years. Now, the last time the debt was fixed, bond rates were approximately 1.5%. Whereas today, they're now 4.5%. So, they simply cannot possibly afford to refi at these levels. They cannot afford to refinance the debt because they're already running a $2 trillion deficit. And of course, refinancing from what was about 1.5% to 4.5% is simply not an option.
So, what will they do? What can they do? And of course, the answer is they can revalue the gold. Revaluing the gold will literally fix the deficit, balance the refinance, and pay down some of the debt slash balance the books all in one fell swoop. And here's the best bit. It's only going to cost them $11 billion to buy back the gold certificates since, as we know and have established plenty of times already today, the book value of this gold is just $11 billion or $42 per ounce. So once they've paid a mere $11 billion for these gold certificates, they can simply revalue the book price to five figures per ounce, just like back in history when we've seen it already done before, going from $27 to $35. And as if by magic, we're going to have created somewhere between $4 and $11 trillion of new money overnight to fix some of these debt issues. They'll simply sell it back to the Fed for trillions, and the Treasury will be funded for years to come.
And now, here is the real 200 IQ move. Because once they've done all of this, the Treasury can then take the Fed's gold once more, and in exchange, it can be given another non-redeemable gold certificate. So we will end up with a Treasury having its gold back plus trillions created out of thin air overnight from the gold revaluation. We'll have no additional debt because this act does not generate any debt that needs to go on the balance sheet. And we'll have a budget surplus instead of a whopping great deficit that the masses are expecting.
So once more, why should you care? Okay, I think you should care because if this is happening, and I believe it is, in fact, I'm going to show you that it's not just belief, really. They really are doing this in plain sight. Then this is one of the biggest opportunities that I am personally aware of. And as you know, I am hardwired into the matrix of markets. The US government is clearly the biggest winner here. Okay, they just get to essentially print a bunch of money, not generate any debt, put it in their own pockets, and then stiff the Fed again by giving it a non-redeemable IOU after forcing it to buy its gold back. But it's also true that anyone holding gold, particularly physical bullion, is going to benefit hugely here. Things like gold mining stocks are likely going to act like meme coins. And thus, I believe the opportunity here for people that can do a little bit of planning, a little bit of their own research and due diligence is absolutely enormous over the rest of the decade.
And I'm sure there'll be some of you sat here going, "Yeah, but Camel, are you just making this up? Is this too much crack again?" Right? Is the tin foil hat too tight? Well, no, it's not. As is very, very, very typical of this space, they are telling you what they're going to do in front of your own eyes, whether or not you choose to listen to it. Scott Preston, the US Treasury Secretary, has publicly stated his intention is to monetize the asset side of the US balance sheet. Let me say that again. Okay. The US Treasury Secretary has publicly stated the intention to monetize the asset side of the US balance sheet. Now, if I sit here and ask you a question. Okay. List me all of the assets that they could possibly monetize. Go on. I'll wait. Exactly. There's only one. There's only one that even is possible to monetize, and that's gold. Okay. Again, if you know where to look, they are telling you what they are going to do. They are telling you what they're going to do ahead of time, just like they always do.
And so again, if this is the plan, and I am sure that it is, wouldn't we be able to see some evidence of this roaring gold price, maybe even a roaring gold price in the face of a risk-on moment in the wider and broader markets? Well, that's exactly what we've been seeing. We've been seeing gold continue to rip higher since I posted this tweet. We're somewhere in this neighborhood, aren't we? Consolidating in here before this next move comes. And this has been happening with the stock market and Bitcoin and everything else ripping to the upside for extended periods of time. This is happening with the dollar moving higher as well. So, is this by sheer coincidence, or do you think that somebody knows something? And who might that somebody on the inside be? Well, again, I go back here. The central banks we know have been actively buying record amounts of gold for the past few years. Ever since that 8-year cycle low was put in on gold, central banks all around the world have been scrambling to buy gold handover fist. Why do you think that is? To me, this is the signature of the central banks grabbing hold of as much gold as they possibly can get their hands on ahead of what they know will be a repeat of the Gold Reserve Act that we saw during 1934.
So, once again, I make the case that nobody, and I do mean nobody, is bullish enough on the precious metals. You can see here we're extremely early in this current 8-year cycle. The next 8-year cycle low is not due until the year 2030. And this blue vertical bar here denotes the half-cycle low in this 8-year cycle. Now, I have long been making the case that we are going to do something like this yellow fractal suggests. Again, that's what this is here. And whilst no fractals are followed perfectly, whilst they do often fail at the most critical moment, that's absolutely true. Whilst fractals I often refer to as the crayons of TA, they actually hold no trading value at all in my humble opinion. But in terms of making a YouTube video and illustrating a point, okay, they're pretty good at that. And so when we look here, so far we have been doing this exact move. Okay, this move, by the way, is not copy and pasted from Bitcoin or some altcoin chart. No, no, no. It's this move right here. That's where this fractal comes from. So this is a move gold has already done once before in its life and appears to be doing again. If I'm even remotely correct about this, then gold is nowhere near a local top yet, despite the fact people have been incessantly calling a top the entire way up. And I believe what we're going to see is something like this. Okay, sometime late this year, a big decline into that half-cycle low point, which is the 4-year cycle low or the half-cycle low in the 8-year cycle. And then I think this thing is going to rip again.
And this, believe it or not, it's just a technical target, right? This is just a normal 8-year bull cycle. This doesn't account for the fact that I'm talking and predicting around $20 trillion of QE to catalyze the four-year cycle lows in the likes of the stock market, Bitcoin, and of course that half-cycle low in the 8-year cycle for gold. If it does something like this and an extended blow-off fifth, which of course is extremely common in commodity markets. Also keep in mind the psychology of an extended fifth wave is completely different in commodities versus in the stocks. Stock market fifth waves tend to be driven by hope. Hope that this bull market's got legs, hope that this bull market will continue, hope that we can make the types of gains in the fifth as we did in the third. But the extended fifth wave in commodities tends to be driven by fear. Fear that if people don't get hold of this commodity, they are going to be in deep trouble. When we have extended fifth waves in things like grains and livestock, corn, wheat, commodities, that type of thing, they're buying it because they are scared those resources are going to become scarce. They are buying it because of floods. They are buying it because they are worried that food shortages are just around the corner. The extended fifth waves that occur in commodities are driven by fear, not by hope like they are in the stock market. So getting some enormous push here I think is entirely reasonable, and especially given there is no other way to fix the debt and deficit issue at this current moment in time.
Again, I truly believe they are telling us what they're going to do ahead of time. There is no other asset on the balance sheet they could possibly monetize, and the signature is there all along since gold is being bid up and driven entirely by central banks buying this. So this is my idea for gold. This has been my idea for gold and will continue to be my idea until such time as this market tops and breaks structure and reverses trend. But at the moment, this is very, very early days in a rip-roaring bull market. I expect this thing to continue. I expect those gold mining stocks to ultimately behave like meme coins. And thus, I continue to be the biggest bull on YouTube. I continue to target much, much, much higher numbers than most people think is realistic. $42k an ounce, by the way, is the number you get if you revalue gold in a 1:1 ratio with M2. I don't think it matters how high your targets are. I think all that matters is those targets are far too low.
So, I'm your boy Campbell. Welcome to the week. Welcome to Monday. Do your own research. Make your own decision. And I'm going to keep doing me, right? I'm going to keep being the biggest gold bull on the planet. I'm going to keep copying the central banks, cuz I'm going to keep looking around and allowing them to tell me what they're doing so that I can position myself accordingly. I'll be back tomorrow with more regular content. We'll review the charts after the close today. And other than that, have a fantastic week. I'm your boy Camel. Until next time, take care. All the best. Cheers. Bye. Camel finance. He's the man to see, rocking the contrarian trades like a pro. No fear, no shame, sticking to his guns in his money game. He's a bad ass. Oh yes indeed. Camel finest got the.