Transcription
July 4th will be a big deal. I don't think I'll go to sleep July 3rd. He is going to make a speech. We're going to go to gold back treasuries. This is their one path out where you can inflate and you can also bring back manufacturing to bring back your ability to produce more than you consume. Gold goes higher, the dollar goes lower. You bring back manufacturing at zero upfront cost if you can back the back end of the treasury market with gold.
>> So, what are the odds that you're giving this now?
>> 5050. 5050 chance that come July 4th, Trump announced a goldbacked long-term treasury.
>> If you put the pieces together with the Genius Act, the finalizing of the Clarity Act, I'll fall on the sword if I'm wrong. But if I were running this country, that's exactly the way that I would go because if not, our future is becoming bleaker by the day.
>> Could we still have the dollar as a medium of exchange as a unit of account?
>> Yes.
>> But have gold as that mutual reserve asset?
>> Yes. Because the reserve is in gold. If you hold the dollar and think it's going to preserve your purchasing power, it's you might as well hold a melting ice cube in your hand.
>> You and I have been talking about ddollarization.
>> It's dreasurization.
>> Exactly.
>> And that's not a word, but it is.
>> It is. Now, what does that mean for the price of gold if they announce this?
This is the real story with Michelle McCrory. Hello, I'm Michelle McCrory and this is the real story. Thank you so much for joining us. Several important developments are unfolding right now that could have major implications for your money, markets, and precious metals. Markets are rallying on news that the conflict with Iran may be moving towards a resolution. A framework agreement between the US and Iran was reached over the weekend with a formal signing expected later this week. Oil prices are falling, stocks are moving higher, and gold has recovered from last week's sell-off. At the same time, new Fed chair Kevin Walsh is preparing for his first Federal Reserve meeting. He has promised significant changes at the Fed, including a possible overhaul of how inflation is measured. And we're also heading into a very symbolic July 4th as America prepares to celebrate its 250th anniversary. Now, that has sparked renewed discussion around America's gold reserves, Fort Knox, and whether the Trump administration could use this occasion to make a major statement about gold. Now, for now, it's speculation, but some reported hires by the new Fed chair are fueling the buzz. Meanwhile, China continues to make moves that could challenge the dollar's dominance in global trade. Beijing is preparing the commercial launch of Embridge, a crossber payments platform developed with the central banks of Hong Kong, Thailand, the UAE, and Saudi Arabia. Now, Embridge allows participating banks to settle transactions directly using central bank digital currencies without relying on the US dollar or the Swift network. Now, it's still early days, but this is seen as a potential alternative payments rail for a growing number of countries. And all of this comes as China continues to accumulate gold, buying gold for the 19 month 19th month in a row now. So, who better to break down all of these headlines and do a deep dive than the one and only Andy Sheckchman. Andy, of course, is the CEO and co-founder of Miles Franklin Precious Metals. Andy, it's been a while and we have got a lot to discuss.
>> Great to see you back, Michelle.
>> And it's nice to do it here in person.
>> Likewise. So I'm going to I'm going to milk this opportunity that I have you here a captive interviewee.
>> Let's do it
>> and lots to discuss. So of course we have to kick off with the Iran deal.
>> Yeah.
>> Uh Trump says the deal is all signed. The straight of moose partially cleared as uh it's supposed to reopen completely by Friday when the agreement is signed in Switzerland. As for what the actual agreement involved, we still don't know the final final details. Uh there's a lot of question marks regarding uranium enrichment, inspections, enforcement mechanisms. Uh but the markets are celebrating this before actually seeing the fine print here. They appear to be pricing this as a major deescalation. Oil is down, risk assets are higher, gold is higher, everything is higher. Again, we still don't know the final details. And also a big point to keep in mind here, Andy, is even if we do know the final details and it is signed, we're dealing with Iran, which has a notorious history of not sticking to deals. Signing deals with Iran is one thing. Getting Iran to actually comply with integrity, not cheat, uh not reject inspectors, as they've done in previous agreements is another thing. Um to that end, Trump says that the US is not removing troops from Middle East bases. It's one thing that Iran wanted but Trump rejected and he says that uh he will resume hostilities and conflict if necessary during this period. So a couple of questions here. Firstly, what is your read on this deal? Is this actually a deal or is this a sort of postponement for the next 60 days? Do you actually see this thing as lasting?
>> Well, it's a memorandum of understanding it's not a deal. I find it interesting that it would kind of smooth things out, if you will, over the July 4th holiday. Um, but the two sides are telling a very different story about exactly what was agreed upon. And in Iran's version is sanctions, relief first, missiles off the table, and the US version is dismantle the missiles first, then get paid. And and I think that's, you know, a big issue, right? That they're both saying different things. I want to read to you a couple of things that I read that that make makes me wonder if this really is a a a a solid deal. But, you know, before I even say that, it it's just been it's been very I don't know, absurd to me, Michelle, that we're seeing a market that no longer trades on stability, um on on real news. it it trades on how the central bank might react to instability instead. It seems like every single data point, every headline becomes a trigger and um it's as if the market believes that war is bad for gold. Quite to the contrary, I think if you think about it, what war leads to is probably very good for gold, especially because how do governments pay for war? They pay for war through higher taxes. But in any case, here's a couple of things that that kind of stick with me a little bit. Trump insists that the terms circulating in Iran state media have nothing to do with what the terms agreed to in writing are. Um, and he says to your point that the deal would require dismantling Iran's nuclear program, on-site destruction and removal of highlyenriched uranium, and a long-term inspection regime, and would be performance-based, meaning Iran gets nothing until it delivers. But there's been leaked reports out of the Iranian state media that says what they're talking about is full suspension of oil and prochemical sanctions with Iran's access to financial proceeds restored, plus the release of 24 billion in frozen funds with half required before negotiations even begin. A $300 billion reconstruction package from the US and its allies. And the US has totally continuously said absolutely not. plus ex explicit exclusion exclusion of Iran's ballistic missile program and support for regional proxy groups from any future negotiations directly contradicting what Israel and many US hawks have demanded. In other words, they are going to more or less bring Hezbollah underneath the umbrella of the Iranian state government. Um, and then also a any final agreement to be ratified through a UN Security Council resolution, giving it international legitimacy and making it harder for a future US administration to simply walk away. Um, and a commitment from Iran not to produce nuclear weapons rather than full dismantlement which clashes clashes with the US position. It's is almost like they're just doing this to get through the 250th anniversary to get this big celebration out of the way to plate and the markets react like that. It's just so silly.
>> Well, well, that was the question. Is this a pause more than a deal? And all the markets being premature in celebrating, if you will.
>> Yes, they are. Just like they're absurd the other way, it's absurd this way. to see gold rally by $130 on this when it should have been rallying the whole time because you know this this inflation is real. It's not going anywhere and it is a function of the war and for the market to believe that the Fed has to lower rates for gold to go higher is absurd. And if you look at how the central banks have been inelastic in their gold purchasing, doesn't matter if the currencies were strong, it doesn't matter if rates were high, they continue to purchase gold. Tells you the real story. And and it's just um silly that the markets are behaving this way. And it it instead of seeing the big picture, they they focus on the leaves instead of the forest, the rustling leaves of the trees. And I think it's um I think it would be 50/50 at best if this gets ratified.
>> So regarding gold rallying on war news, there's been some confusion there because typically gold is a safe haven asset. Rallies when there's geopolitical escalation and doesn't rally uh when there's peace, shall we say. And we've seen the opposite during this conflict. Initially there was a spike in the first day but then as this conflict continued uh and even intensified gold did not rally on escalating geopolitical tensions and now we have we'll call it a deal or what people are interpreting as a deal and and gold is rallying on peace not rallying on geopolitical uncertainty which is the opposite of its usual safe haven function. So what what's going on there?
>> Yeah, it's just the belief, this this stupid illogical belief that the only road to higher gold price has nothing to do with with the fundamentals. It only has to do with whether or not the Federal Reserve will be dovish rather than hawkish. And if the Fed were to lower rates, why then gold will do very well. But because inflation is ignited through the war and oil prices go higher which drags the CPI higher which drags the inflation level higher, why then the Fed has to pause on on rate uh decreases and maybe even as the market has been signaling a move towards a rate hike like we just recently saw in the European Union and many expect to see in Japan in the next couple of days. Then so which again is silly because we saw gold move um massively in in the highest and fastest uptick in interest rates in history from roughly zero to 450 basis points um in a very short period of time. Yet gold kept moving higher. So it's convenient for them to bring out this narrative to roll out this narrative when the price is getting hit. Um, and it's it's it's faulty as far as I'm concerned. And what betrays it is the amount of gold we continue to see being delivered. In the month of June, we've already seen close to 14 13 or 14. I haven't checked it today. As of as of Friday, a couple of days ago, was approaching 13 billion in deliveries on Comx. Now, that doesn't mean it left COMX, but someone or some ones are standing for delivery, prioritizing physical delivery over cash settlement. This is massive. These people who are standing for delivery for 12 billion, 13 billion of gold in the first 10 days of the month, which follows a pattern we've seen for 18 straight months, that that to me betrays all the price action. And it's the silly market that is is falling for this narrative while the central bankers, they're laughing all the way to to the vault with what they're accumulating.
>> and focusing on just one angle, right? Just focusing on the Fed angle.
>> It's silly. It's stupid. it's not real.
>> And the idea is there is that higher rates uh increase the opportunity cost of holding gold. I mean that's usually the sentiment that gold doesn't yield rates and you're better off uh having and and also less liquidity driving into gold.
>> I mean look at it. You right now you got you got the CPI up at what 4.6% month over month and uh from the last read and um or is it year-over-year? Whatever the point of it is, the uptake of almost I think it was 60 basis points uh for the month, you're approaching um pandemic level inflation. And so the the level of inflation is at or higher than the rate that you're going to get. And we know the inflation number that they tell us is a bunch of nonsense. So the point of it is you're at almost basically at real negative returns. And yet we're supposed to believe that this is enough to entice people from owning gold to to own dollars that are being bled away in value being paid in interest rate. That barely and if we were being honest and using shadow stats numbers massively puts you at a negative return.
>> And again, even if this deal is legit and it sticks and it holds, we still don't know what the long-term accumulative inflation impact is of the fact that we've had this conflict for
>> There's a big lag effect. And that lag effect hasn't happened yet, but it will. And I think I think most people know that the inflation that they're feeling.
>> the grocery store with tuition, with insurance,
>> um that it's much higher than the 3 4% we are led to believe.
>> Well, and we also have a new Fed chair coming in to take his first meeting, uh Kevin Walsh. He will also hold a press conference on Wednesday, which of course will be widely watched. And this meeting is widely expected to produce no change in interest rates despite President Trump's demands that the Fed keep cutting as he was making very clear to Worsh's predecessor Jerome Pal. Uh but sources are saying that the president trusts Worsh so he will give him some scope of action. people familiar with the Trump Fed dynamics, speaking under condition of anonymity, told CNBC that uh he's going to give him a lot of free range to do what he wants and that he will attempt to use that freedom to make his case internally for some big changes at the Fed, uh his regime change that he said he wanted to do. Um there are reports that that could include how Worsh and the Fed calculate inflation. Um, and Worsh is expected to focus more heavily on whether inflation is being driven by monetary expansion uh rather than external shocks. This is what he said during his Senate confirmation hearings. He said, "The measures I prefer are looking at things that are called trimmed averages. A trimmed mean inflation measure essentially removes the most extreme price moves from the calculation, allowing policy makers to focus on what they view as the underlying inflation trend rather than temporary spikes. So this brings up two questions. First, what are your expectations from Wars in terms of keeping rates steady, potentially hiking rates, potentially cutting rates for the near term? And do you see him and the Fed coming up with another measure of inflation which then down the line could justify rate cuts because they bring inflation down to 2% under this new calculation should they implement that?
>> Yeah, that this trim measurement it it in in essence laps off the highs and the lows, the outliers if you if you will and it would put it right now at just barely over 2% which is close to the mandate. that the PPI numbers from May come in at to 6.5% above expectations uh or 6.5% above expectations of 6.4%. Um, and it's the highest level since the pandemic since 2022. And and so the PPI numbers, the producer price index is kind of the precursor to the CPI. How much does it cost for the producers to produce this stuff? Inflation came in at 4.9%. Um, and so, you know, you are very close to these pandemic levels and and so inflation is real and for them to to trim it again and and make it seem as though the rates are much lower uh to me is is is a pipe dream at least in terms of um how it will deal with the real problem of inflation. Whether or not they do it, I guess they probably will do it, but the average person is just going to be hurt every bit as bad regardless of that number.
>> Explain what that means for the average person when it comes to purchasing power because we throw out PPI, CPI, trimmed means, this calculation, what it actually means is that your dollar is buying you less.
>> Yeah. And if you look at the amount of money that's that's flowing into the money market accounts, as an example, which which are paying right now, not even 4%. And there's there's trillions of dollars in the money market accounts of people who are in there supposedly for the safety and just to get a return, their real return is negative based upon the real CPI right now. And so that really is going to make anyone who looks at it with a discerning eye say, "What the hell am I doing here?" If I'm actually going backwards, especially any sophisticated trader would say, "I'm out." But when you trim it again and blur the reality of of what inflation truly is, you may catch more people sleep, if you will, um and and and accept that regative meal, that negative real return.
>> But there was some talk that Worsh will try to re in um quantitative easing that he wanted to
>> I think he will.
>> How how does that happen?
>> I think he will do that in January with the with the with the passing of the Genius Act. See, this is the part that that the mainstream is ignoring, Michelle. To me, the the passing of the Genius Act neuters the dual mandate of the Fed because the Genius Act says anytime money moves after January 1st, it will be primarily backed by 90-day or less short-term treasuries, you pin the front end of the curve to the floor. And so that mandate of the Fed and their interest rate adjustments when anytime money moves it is synthetically creating demand for short-term treasuries, the Fed overnight lending rate, the very very front end of the curve will have zero impact when anytime money moves, whether you buy a pack of cigarettes or a new house, it's backed by short-term treasuries. This will paste the front end of the curve to the ground. And so you'll have very very low rates with the ability to then to slowly repair your your balance sheet. Now um that again would move let's hope into Judy Shelton's idea of backing the back end of the market with gold. And if that were to happen you could actually I mean this is this is the argument I've been making foolishly perhaps kind of like I did with bricks in 2019. I don't hear anyone else saying this. So either I I fall on the sword or or again I just have the stupidity or the courage to say something I believe which is the front end of the curve is done with the genius act as is the dual mandate of the Fed. The back end of the curve would be backed by gold. You would be able then to if all of the money this and the clarity act says you can't you can't transfer the interest. And we see what Tether has been doing, buying more gold than anyone but the country of Poland.
>> And and Bo Hines is the CEO of USA Tether, the Genius Act compliant portion of this. He was Trump's cryptosar. If there was a wink wink nod nod deal, and this is a supposition, but if they were to let gold go higher and higher and higher and higher by taking that interest and pummeling it into gold and that is the deal that they worked, gold goes higher, the dollar goes lower. You sell you sell manufacturing to the public uh to the world rather. you bring back manufacturing at zero upfront costs if you can back the back end of the treasury market with gold and I don't know to me it is doable if all of this pans out July 4th will be a big deal I I don't think I'll go to sleep July 3rd
>> you know Andy so many of the themes that you've discussed over the years are sort of culminating together and and we'll break those down I mean you have long said that you need a weaker dollar because of Triffin's dilemma because you want to onore manufacturing you need the United States do one. We have to our kids are dead.
>> You've said that. You've said that we're going to kill the dollar but save the system by backing treasuries with gold. And a lot of Well, this isn't getting much attention, but it is very interesting that uh Kevin Walsh, the new Fed chair, has brought on Paul Winfrey.
>> Yeah, that freaked me out when I saw it. It truly did.
>> Now, let's explain why. Because Winfrey is a former Trump administration economic adviser and he authored the Federal Reserve chapter in Project 2025, a conservative paper where he discussed the possibility of introducing gold convertible Treasury instruments and even allowing a parallel commoditybacked monetary system to operate alongside the current fiat dollar. Now, you've been talking about this for quite some time. Um, and you've suggested that we could see this happen, and this is the first hire by the new Fed chair, someone that has written extensively on link gold back to the monetary system. Now, he's been hired reportedly as an interim advisor, just so we're clear. But again, he wrote this chapter in Project 2025 on the Fed. Project 2025 is a policy blueprint developed by the conservative think tank, the Heritage Foundation. Was developed ahead of the 2024 US election. Got a lot of hysteria from some of the left uh media. Um, but the nearly 900page document lays out recommendations for how a future conservative administration could reshape the federal government. And it covers everything from foreign policy and energy to regulation, the Federal Reserve and monetary policy,
>> which was his chapter.
>> And that's where we're getting to now. His argument in the chapter on the Federal Reserve was that introducing gold back into the monetary framework could help restore fiscal discipline and limit the government's ability to expand spending through debt and money creation. And here's a quote written by Winfrey from chapter 24 in Project 2025. and he writes, "Beyond full backing, alternative paths to gold backing might involve gold convertible treasury instruments or allowing a parallel gold standard to operate temporarily alongside the current fiat dollar. These could ease adoption while minimizing disruption, but they should be temporary so that we can quickly enjoy the benefits of gold's ability to police government spending. In addition, Congress could simply allow individuals to use commoditybacked money without fully replacing the current system. Again, no one is saying that the US is about to return to a gold standard. But it's very very interesting that this hire by the new Fed chair,
>> first hire, yeah,
>> is advocating something that you have suggested along with Judy Shelton could be the solution.
>> And I don't think we're going to go to a gold back system. We're going to go to goldback treasuries which will allow monetary stupidity to continue. However, the gold within the backing of the treasury will be kind of the the alarm bell if you will to that monetary stupidity. And case in point, you get you get um van funds, their emerging bond market team came out and wrote a report and said if if the dollar loses reserve status, Triffin's dilemma, we could see gold going to $139,000. So, when Judy says, you know, we can sell a 50-year bond deliverable in gold or dollars with zero coupon at the end of the 50-year period. And in her book, she said 5, 10, 20, 30, 50. But starting with the 50, that means zero upfront borrowing cost. Number one, because there's no upfront, you just sell the bond, you get the money. You have to deliver the gold. No interest payments, but gold at the end of the maturity. If the dollar continues to lose value because the interest that is not transferable is piled into gold pushing gold higher and the dollar lower. Gold being the only neutral barometer, the only neutral reserve asset by which everything is measured. Yeah, I think this can actually happen and but it allows the Fed to continue. It allows monetary policy to coexist with gold backing of the Treasury market, not backing the dollar because that's when you can't expand the money supply if there's not enough gold. However, you can still do that and sell bonds redeemable in gold. That is the whole purpose of of of having the redeemability in gold because if the world believes that we will not find fiscal sanity or monetary uh restraint, then indeed they will choose, you know, the the gold instead of the dollars or any small interest attached to it.
>> Why would they be forced to consider something like this now? Are we at that point?
>> Oh, yeah. We're past that point. I mean, not only
>> in terms of in terms of reality and 39 plus trillion dollars of debt. Yes.
>> But in terms of perception,
>> well, 39 trillion in debt, don't forget Medicare, Medicaid, Social Security, government, military pensions, we're at 200 trillion in debt. And we have already shown the world that if we don't agree with you, we'll sanction you and we'll kick you out of Swift and we'll even maybe freeze and or confiscate, which is a form of default, on your US treasuries. So no question about it is it is a combination of of of too much debt accumulation. Um the inability or massive reluctance to show any form of austerity and and you know you look at Doge who comes in and cites two trillion in cuts and they can only find a few hundred uh billion which is not even a few days worth of trading uh or or spending by the government. The world realizes that we are in a pickle. Um, and I think this administration understands that. And how do you keep how do you get to a point where you can flip the script? My mentor, Richard Russell said, Andy, the Fed has two choices. This is years ago. They can inflate or they can die. He said, "Because there's only three ways out of of debt. One, you produce more than you consume." Well, that's never been our case. Maybe that's what they're trying to do. You you inflate or you default. But to get to the part of producing more than we consume because we've offshored everything because of Triffin's dilemma is going to take a herculean task. It's going to take time. And so you start by backing the Treasury with gold to continue to facilitate investment in in the country. At the same time, you can start to pair down your balance sheet. You can do the austerity. You can do these things because the front end of the curve is being synthetically hammered to the ground through money movement. It's diabolically genius. I mean, if I had to guess, I would say it's gonna happen. Now, I've been disappointed before, but everything points to me this is their one path out where you can inflate and you can also bring back manufacturing to bring back your ability to produce more than you consume because we're so far past that if we don't. You know, the fat lady is singing. She's warming up. But in terms of the whole plan, yeah, there's there's a gap where it's going to be tough. But you can look your children in the face and say, "You know what? You and your kids will have a future if this goes through."
>> Well, let's talk about timing because Judy Shelton, who was a former Fed nominee under Trump in the first administration,
>> she suggested that this could be done July 4th of this year
>> under the 250th anniversary as some kind of jubilee type of product I if you will, and it you can frame it in a very nice way. Um, do you really think that we could be seeing it this July 4th? Last year you made a prediction. You said that this would be the obviously the big thing you'd be looking out for in 2026.
>> I won't sleep July 3rd. I guarantee you.
>> What are the percentages that you're giving this? What are the odds that you're giving this now?
>> 5050.
>> 5050. That's very damn
>> and it's higher than I would have said before they before this hire was made. And also before all of the entertainers, you know, these idiots who just disrespect the country by backing out at the 12th hour and not Trump said, "Fine, I'll give a speech." What better time than to lay out this this framework? Um I don't know. It's asking a lot.
>> 5050 chance that come July 4th, Trump announce a goldbacked long-term treasury. That's
>> Yes. I think I think if you put the pieces together with the Genius Act, the finalizing of the Clarity Act, interest can't be transferable. So, the issuer has to hold it. What is the issuer, the primary issuer, Tether? What have they been doing? They've been buying more gold than anyone in the world but the country of Poland. And could that be remember that remember te now look there's a fine line between conspiracy and reality. And I'm not trying to be tinfoil hat, but you remember Tether was in big trouble by by the Justice Department for a while. They were being investigated. Where'd that go? And now Bo Hines, Trump's former cryptos are is CEO at at at at USA Tether, which is Genius Act compliant. Could it be that this deal was done? You guys are going to take this interest. You're going to buy gold. You're going to sell it to the Treasury so we don't have to go into the open market and do it and make it be too transparent. You're going to run proxy for us. We'll end up with the gold. You'll end up with the money. You're no longer under investigation. You'll sail off into the sunset in your yacht mega yachts, but you're going to do this for the government. Could that be? That's what I think is going to happen. Now, again, I'll fall on the sword if I'm wrong. But if I were running this country, that's exactly the way that I would go because if not, we our future is becoming bleaker by the day. And I don't care what people say about AI and automation and increase efficiency at the K-shaped level where the rich get richer and the poor get poor because the rich find maximum efficiency. Those business owners that survive, they make a gazillion and everyone else struggles to find a job in the face of increased automation and robotics and all of these things. If we don't bring back manufacturing, the future in this country is not what it was when when I was a kid, for sure. and and I have young kids that I'm I'm concerned about their future. This gives us a chance to bridge the gap between being consuming far more than we've ever produced to going switching the tables like we used to be and producing more than we consume.
>> I just want to clarify for the viewers that are not familiar with Tether that is uh the biggest issuer of stable coins,
>> correct? USbacked stable coins US which are critical to crypto to anything in the crypto ecosystem. You convert other uh currencies back to stable coins and any kind of transaction that you do on the blockchain. And what the Genius Act did was it made sure that it's legal treasuries and tied to treasuries and they had to be backed 100%
>> by US short-term treasuries
>> by a little bit of cash but majority short-term treasuries. But the point of it is you've created synthetic demand for the front end of the curve,
>> which many have said is the way to maintain the dollar's role as a reserve currency.
>> I don't believe that. I don't believe that.
>> Here's what's interesting. Could we still have the dollar as a unit of exchange
>> uh as a as a medium of exchange as a unit of account?
>> Yes.
>> But have gold as that mutual reserve asset?
>> Yes. because the reserve is in gold and you if you hold the dollar and think it's going to preserve your purchasing power,
>> uh it's you might as well hold a melting ice cube in your hand.
>> But but isn't that the genius of the system? The genius of of this act is that
>> you maintain the dollar
>> as the global.
>> What have you what have we heard now for going on for what did we just find out that Embridge is now being launched, right?
>> We were going to
>> Okay, so Embridge is coming out but the SIPs cross interbank payment system has already been released. China site signed up the countries in Southeast Asia, the Asian countries, which are their largest trading partner by far. 800 million people, twice that of the United States, are now using SIPs. You're seeing all of these countries sign deals to trade unilaterally with one another. So that you have local currencies trading with one another and instead of one currency, everyone trades their own and the settlement vehicle is gold instead of US treasuries. That's what it's going to be in the global south. And I think this is the whole I think that this administration is happy with that. In other words, you soft default on the reserve status of the dollar. You maintain the dollar's use for trade and for a unit of account. But if you save in dollars, you're going to go broke. And I think that's where where gold comes into play. Because people would say, "What the hell do I want old treasuries for if they're inflating away and they're changing the metric by which we gauge inflation? Screw it." No. Fine. Here's gold. We'll peg it to it. It's deliverable. Boom. you just all of a sudden fixed all angles and I don't know to me it's very simplistic it's very elegant it's very easy
>> it would work I think
>> I mean Luca Groman encapsulates it very nicely he says behold the new global monetary system where the store of value function is separated from the medium of exchange of account USD remains most used global currency gold becomes most reserved global asset and you and I have been talking about ddollarization
>> depreizationactly And that's not a word, but it is.
>> It is. Now, we've just coined it.
>> It is. It's more treasuries than it is dollars because the the rails of the dollar system are robust. Now, when you look at Embridge and you look at SIPs, the rails are being built
>> slowly, right,
>> to challenge that, but we're still a ways away from that. And so, the milkshake theory as an example, it has value right now. There will come a time where I think all of a sudden the world says, well, geez, you know, maybe I don't need to trade primarily through Swift. And we can we can use other systems and other systems are being built. It is the treasury that needs the backing of gold, not the dollar. The dollar doesn't need it. And if you're if these entities are smart, they don't hold dollars very long. They trade with it and they switch it to an asset.
>> Well, we we have seen that gold has officially surpassed US treasuries as the largest reserve asset held by central banks. We've been reporting this on this for a while.
>> It's probably much bigger because they lie about what they
>> But the ECB has just now come out and confirmed that as well. also just another confirmation of a trend that we've been focused and highlighting for a while now. Um before we get into the replacement of the financial architecture, again another trend that you were very early on to focus on and elaborate on can what is involved in terms of legally saying goldbacked treasuries? Who has the authority to do that? Is it um the Senate? Is it the Fed? Is it the president?
>> That's a question I do not know. That's a good question. I don't know that. I mean that the way that it has been framed um the way that it has come out, I guess it would be a decision between it's not been framed that it needs congressional approval. I'll put it to you that way.
>> So it's the Treasury Secretary.
>> I think it's the Treasury Secretary in conjunction with the president and maybe even in consultation with the Fed if I had to guess. If I had to guess, but
>> we do know is a gold book, a self-proclaimed gold book
>> 100%. And you know, he said, "We're not going to revalue gold." Now, think of the genius of this. No, we're not, but we're going to set up a proxy who's going to buy the crap out of it because the interest is not transferable. That proxy, which would be not only Tether, but JP Morgan and Morgan Stanley and all the banks that are going to issue their own stable coins, they'll all do the same thing. They'll push gold to the moon, and a large portion of that gold is going to end up back with the TR. Did he explicitly say we're not going to revalue gold? Or did he say we're not going to? Well, at first he said we're going to monetize
>> the assets,
>> right? And we're not going to revalue gold. He said we're not going to revalue gold, which would in essence be monetizing it because it's it's it's still valued at 422.
>> What if you just marked it to marketing?
>> That's correct. And I think that's ultimately what they will do. And I don't know if that's going to happen right now or not. Maybe it shines too much light on things. But the minute they roll out the
>> would have to happen together.
>> Yes. They the minute they roll out the treasury they will mark to market and then allow through the devaluing of the dollar all of the interest going into gold pushes gold higher devalues the dollar allows manufacturing to be sold to the world like everyone has done to us uh and allows the debt to be paid off easier and then at the same time if they back the back end of the treasury allows for zero upfront borrowing costs to reinvigorate our infrastructure of manufacturing to build it with no upfront costs as gold goes higher Like VanX fund says 139,000. If you sell a $20 million bond right now for 20 years, it's about 4,500 ounces of gold at current prices. But at 139,000, it's like 120 ounces of gold in 20 years. So everything works out, including the amount of gold you have to pay back at the end.
>> What does that mean for the price of gold if they announce this?
>> Gold starts to go higher and higher and higher and higher. And I think the way that they do it is organically. It's synthetic in nature but organic in in its movement because it will be moved not by government edict but by this synthetic appreciation of or accumulation of treasuries and the interest having nowhere to go but plugging it into there which is self-s serving for the government for manufacturing for tether everybody wins in this except I guess uh those who are shorted gold
>> and you know who also wins China. Yeah, China still wins in a way. Uh,
>> of course they do.
>> What we've discussed, as you've pointed out, is this alternative financial
>> railway system effectively being built. Yes.
>> And to that end, as we're hearing, you know, more concern about sanctions about the US as uh some would say excessive weaponization of the dollar. Uh, China is now getting ready for the commercial roll out of its digital currency program that could in fact reshape crossber transactions, reduce reliance on the dollar and also draw Beijing closer to its belt and road trading partners. And this is the project embridge that you have been talking about for such a long time and they are getting ready to launch this and what it does. It's backed by the central banks of mainland China, Hong Kong, Thailand, the United Arab Emirates, and Saudi Arabia. And it allows participating countries to settle crossborder trade directly using central bank digital currencies, bypassing the Swift system, bypassing correspondent banks, bypassing dollar clearing, bypassing the New York banking system. And something that you've pointed out, China is pursuing two tracks simultaneously. Track one, they're buying physical gold every chance they get. Every month, China adds to its physical gold holdings. China's central bank just reported its 19th consecutive month of official gold purchases. And track two, build an alternative settlement network.
>> Yep.
>> One addresses reserves, the other addresses payments. So even if the US comes out of this goldback treasury,
>> China will say, "Sure, great." Because they have more gold. That's right. Well, well, we don't know if they have more gold. Yeah, we
>> officially they have less gold. There are some, you know, conflicting theories on how much gold the US really has. Does it have all the gold in Fort Knox? Does have less? Does it have more? Uh what China officially says it has in terms of its gold reserves, many say is at least 3x that, 4x that, 5x that. But this development would be welcomed in a way.
>> Yes. By all the central banks who've been buying the crap out of it. And you know maybe the central banks maybe they all know where this is ultimately going. I don't know. But this is where the you know this is look you have you have Embridge which is a rail. You have SIPs the cross center bank payment system Chinese which is also a rail.
>> But the real question is what settles on top of that rail. And this is where the bricks unit idea becomes so important. It's a a trade settlement currency designed around 60% bricks plus currencies, 40% gold.
>> Um
>> why not just the you want why don't go it alone?
>> Because that's not what the bricks system is. what they are framing it as as to not bring into the mix Trump's anger over over the BRICS um countries unifying us a new settlement system is the internationalization of B1 and they're tying it to the expansion of the Shanghai metals exchange where you're having you know the the Saudi Arabia is one on on Embridge the one in Saudi Arabia is now operational their vault is operational the next one is being built in the United Arab Emirates oh that's right they're a member of of Embridge bridge, too. And and then the first one is in Hong Kong. Oh, that's right. They're a member of Mbridge, too, aren't they? That's right. And so, China Oh, the Shanghai medal. They're a member of Embridge, too. So, you have China, Shanghai, Hong Kong, Hong Kong, Saudi Arabia, United Arab Emirates. Geez, that's interesting. Now, I haven't seen one in Thailand yet. Maybe that's next on the horizon. But expansion of the of the exchange where you settle in balances in gold and it is the expansion of the of the um the digital yuan or the international the renimi anyway you look at it that's how it's being framed but it is the rails of of the bricks unit and um I think you will see this happen where countries will trade with one another using their own currencies settling in balances in gold and at first it will just well it actually The actual white paper on it says the bricks plus countries. Well, there's a whole bunch of brick. There's 10 or 11 countries that are already part of bricks plus 30 or 40 more that have expressed interest. Now, again, I talk about this all the time. You know, when you were at your last employer, the last interview I did with you before we so wonderfully uh began working together,
>> happiest moment of
>> and mine. and and you said, "But Andy, the BIS and their innovation hub is a western institution." It dawned on me. It ding ding ding at that moment. And when Augustus Carson
>> I love it when I give you the ding.
>> You did. Well, it did. And when Augustus Carson's pulled the rug out underneath the bricks at the 12th hour saying we can't do business or provide any any type of system that will allow countries to sidestep Western sanctions. It's as if like I've always said that Russia, they just realized Russia was the arm bricks that infuriated Xi and Putin and the rest of the BRICS countries and that's why don't it anymore and they are setting up the rails and they are using it under the cover ofQi and and and the being internationalized I think to set the stage for the implementation. The article that just came out in the Financial Times specifically cites the bricks, not China, but it is Chinese Chinese technology along with that of Hong Kong, Thailand, UAE, and Saudi Arabia. All of which with the exception of Thailand and maybe they do have a gold vaulting system on the horizon or one there already, which I don't know. I should check. I should know that. But all of the others have vaulting systems there and operational or on the horizon like the UAE for the bricks. But they already have one in Dubai. So I mean this system, these vaulting systems will connect with those in Singapore, with those in St. Petersburg, with those in India and Mubai. They'll all connect.
And it will be a settlement system where you know, you settle in balances and gold, but you trade with one another in local currencies. Now, the question is, will they allow at some point the dollar to be part of this? That's a, that's a, that's an interesting thought process. I don't know if they will, but certainly it will be a parallel system once fully mature.
Something that you have laid out, and the pieces are falling into place little by little.
They are. And, and speaking of Singapore, Singapore has just announced plans to launch a new gold clearing system with major banks, including JP Morgan and Deutsche Bank, participating in this initiative. And the goal is to establish Singapore as a major hub for clearing, settlement, storage, and trading of physical gold during Asian market hours. Um, this is interesting. It comes as Hong Kong is launching its own gold clearing infrastructure. Uh, and there's this growing competition between Asian financial centers and Western financial.
Which really pissed me off that they, they cite the two biggest slee bags in the, in the room with JP and Deutsche Bank. It's like, it's like.
But doesn't it make you think that they know what's going to happen? That's why they're involved in this, because they see the bigger picture here.
Well, yeah, but why are they allowed? It's like, it's like bringing your two girlfriends in to live in your house with your wife. It just, it's, it's silly. Like, okay, fine. Uh, maybe they do. And maybe that's why we've heard rumors of the trading desk moving to Singapore, JP Morgan part of it. And maybe they do understand that the system in London and in the United States, that the COMEX and the LBMA has kind of, um, outlasted its, its usefulness in, in, in terms of the way that they have rehypothecated and and distorted, in essence, letting the, the, the tail wag the dog, where the commodity should be the one setting the price, not the futures market. Well, it's, we all know that it is the futures market that sets the price. That perversion is what is, I believe, part of the reason you are seeing expansions all around the world in vaulting systems. And they all say very clear, we're not here to challenge the Western system. Yeah, my ass, you're not. You are challenging, and you will, when fully implemented, be very formidable when connected not only with all of the other vaults, but with all of the other rails that allow transactions and settlement to happen with a very formidable swath of human population, all talking to one another. Um, and I think very quickly, you find that the London system and that in the United States become useful only to a very select few and obsolete in the end. Um, it's the beginning of the end, I would argue, for the Western price setting of commodities because these countries understand the only reason they're not bitching is they're the ones all accumulating it. They understand that to allow the West to continue to do that is is ridiculous. And maybe JP and Deutsche Bank see the handwriting on the wall and said, if we don't.
If we don't kind of like, kind of like India and Saudi Arabia and the UAE having both, both feet, one in the West and one in, in with the BRICS, because you know, you have to be judicious and diplomatic in how you choose sides. There will come a moment where the bell rings and you have to choose sides. But until then, there's no reason for anyone to explicitly, you know, give Trump the middle finger. It's kind of like play Kate Trump and and continue to build your back door, to continue to build your, your escape hatch.
Yeah. I mean, the fact that JP Morgan is involved in this, with the way that they have been linked to metals manipulation in the past, I mean, obviously that is a Deutsche Bank and Deutsche Bank. Obviously, that's a negative to your point with bringing your girlfriends in with your wife. Um, which is never a good strategy, by the way. Not unless she invites them.
That's a whole other conversation.
Speaking of either, we know your wife is right out there.
Her head snapped when I said that.
But the point that JP Morgan is cooperating with this, they see the writing on the wall. I think that just lends more credibility to this whole big systemic change.
Now, let's take that a step further.
Let's take that a step further. If JP Morgan knows about, what do you think Trump knows?
I bet you Trump knows, too. And maybe all of that has to do with who the hell stood for delivery for 13 billion in gold this month. Now, it didn't leave. We've seen about a million ounces of gold leave COMEX in the last 30 days. But who stood for possession for all of that gold? Um, quietly, don't tell. You know, there's a difference between paper settling and physical bars in my account. The fact that someone wants the number bars over a cash settlement is huge. But this is, this is the same thing we continue to see. And yet no one speaks about it. Like, where's the mainstream sink? By the way, Johnny, what hap, who, who bought all that gold? And why didn't they just cash settle like they always did? So maybe President Trump understands all of the things that he might be trying to do, you can't say out loud, or you get immediately crowded out of your trade. And so I think that a lot of the things that's why there's supposition involved. Knock 'em, razor. And I'm just stupid enough to say what I believe. Now, I, I don't know if I'm right on any of this stuff. Judy Shelton was on my show and your show and said these things. I read her book. It's very convincing.
Do I know that it's going to happen? And is it over if it doesn't happen July 4th? No. But it certainly seems like gold, and rising gold, which devalues the dollar, will have a central role in where this is all going.
I mean, I see the pieces falling into place. And again, this Paul Winfrey.
Huge that. I mean, that made my day when I saw it.
But I don't think it's happening this July 4th.
Well, you might be right. You're going to buy me dinner if not.
Wait, if you're right and if I.
I'll buy you dinner.
Okay, if I work.
The other way. Yes. Well, whatever. You know what I'm saying? I look, I.
I.
I just think it's too soon for such an explosive.
It very well may be, or maybe not. Maybe he says something because he knows he's got to know that everyone's talking about it. Maybe he says something, you know. Um, remember that that article that that advertisement you pulled out where Donald Jr., Donald Trump.
Talked about, you know.
I think we have it if we want to pull that out.
Like, you know, we're going to revalue gold. Well, this is a way to revalue gold without the US government doing it. And and other entities like Tether and commercial banks who are issuing the the stable coins, who will be able then to keep the interest and buy gold, would run proxy cover for the government. It's a way for the government to get its gold, to enrich the banks and the and the fintech companies like like Tether, and stay one step arms length removed so that it isn't so visible in your face what is happening now. Um, will he announce a link to a 50-year Treasury? Because, you know, Judy's comment was it was going to happen on July 4th because it, it was such a momentous day. In her mind, he framed it as being the biggest day of his presidency, presiding over a country's 250th anniversary and all of the changes that we may see. And if you start by seeing war start to get rid of the dot plot and all of the things that have been, have been standard protocol forever, well, maybe it is time to do it. We shall see. I look, I, I part of me is, yeah, it ain't going to happen. Part of me is like, yeah, but it, it very well may. That's why I'm 50/50. I don't know, but I don't think it's dead in the water. If it does, if he doesn't announce it on July 4th, I'll be disappointed. Yes. As will a lot of people. But I do still think that the rails that are being set up again favor much higher gold, gold accumulation by the West, um, and a devalued dollar. And how they tie all that together, I guess, remains to be seen. Let's just hope. I might just pull an all-nighter and uh, maybe even have more to drink than I would otherwise, just to calm my nerves on July 3rd as we get to this July 4th deal where he is going to make a speech instead of all of these disrespectful artists who pulled out to embarrass him and the presidency, which I can't stand this divisiveness anymore. It's enough to make me puke. Um, so he's going to, instead of listening to rock bands or whatever country western bands, whichever ones pulled up.
Is still performing.
Are they? I don't know. Are they? I thought most of them pulled out.
Many have pulled out, but they will become.
They should all, their career should all end as far as I'm concerned. Just the disrespect to the country.
The office of the president.
It's just disrespectful as being an American citizen. Period. But that'll give him more time to tell us about the gold uh backing of the Treasury. I'm.
And when he says that, you don't expect an immediate spike in the price of gold.
Well, you would think so. Yes. But, um, I don't know. Depends how he says it. I mean, yes, it should.
Well, they'd have to frame a delegate.
Well, maybe the best way to then do that is to make sure that gold comes from a lower place, like knocking it down since January. Oh, that's right. That happened. I forgot. They knocked the hell out of it since January. And yet, as they've been knocking it down, we've been seeing deliveries off the charts around the globe. So, the central bankers don't give a crap. In fact, they were happy that the price got knocked down. And maybe that is the way to frame something like this is let it start from a much lower high than announcing it at $5,500.
How would that work with the bigger geopolitical context of this Iran war, which we started off this conversation with? Does that distract from that? How does that sort of play with that?
I think it, it might actually show people that he's actually trying to do something for the good of this country. A lot of people, if they just stripped out who he was and the way he communicated and look at what he is trying to do for the country, may look at him very differently. And I think this would be in your face. And to say to to someone blanketly, look, we're dead. Our kids are dead. AI is going to destroy the jobs. We're uneducated. Remember Ray Dalio? 60% of the country has a literacy rate under the sixth grade. We're broke. We're insolvent. We make nothing. We're dumb. And if, and here comes AI just in time to not rescue us, but to make the rich richer and the poor poorer, because you get maximum efficiency at the expense of of millions of jobs. And all of these business owners who survive will will ride off into the sunset, and everyone else will struggle just to find a way to make ends meet. That's why you have to bring back manufacturing. You must, period, no matter what. And and the only way to do that is to abandon the reserve status. And that's why Jared Bernstein and and both the knucklehead Jared Bernstein, the previous economic advisor for Biden, and and why Vice President Vance continuously talk about.
Triffin's dilemma. We can't do it anymore. So there is a lot of truth in what I'm saying. Yes, there's some position. I'm trying to connect the dots, but it's eloquent if you think about it. The way they've set it up, it, it might just work. If we don't find a way to produce more than we consume, then it's just a matter of time because we cannot continue to borrow. In fact, I'll give you an interesting analogy. Um, PIMCO, you know, PIMCO, the bond company, they just came out and talked about we're at this crossroads right now where debt is too high, and that we're going to reach a period of time where credit expansion will die. That we're not going to extend credit to people who are borrowing money to pay interest on their bills, or to borrow money to to lay away on food purchases, or whatever. People are too far down the line on their credit, and we see all of these uh defaults and delays in in payments and, you know, delinquencies. And PIMCO said this is real. It's getting real. But isn't that the same position that the US government is in? We're borrowing. We're at 1.6 trillion on interest payments alone. I mean, how the hell do you continue to to entice people to buy your treasuries when you're just borrowing 40% of what you take in in tax revenue, or whatever the huge number is, something like that, just to pay the interest. And, and you continue to watch it grow. In a few years, it'll be the majority, if not all of the interest on on on tax revenue will go income of tax revenue go just to pay the interest on the debt. No one's going to buy our treasuries. I mean, these things have to happen by hook or crook. I don't know. To me, it just makes sense.
So, a 50/50 chance that come July 4th.
We will have a gold-backed US Treasury announcement, which effectively works gold back into the global monetary system.
Now, if by some chance Judy Shelton gets hired as his second hire, then I'm going to up that to about 90%. And um.
Either way, they're going to be five words.
This is so far against my belief structure. I never go out on a limb and say a date and a time. And.
Look, let's just caveat it by saying Judy told both you and I in person. She said almost verbatim, Andy, in no uncertain terms, when I was on Trump's transition team, he told me that July 4th was the biggest day of his presidency. And I believe he will, he will link gold to the treasury market, reinstilling confidence, almost verbatim. So, and I know she told you something similar. I watched it July 4th. July 4th. And she's told everyone on X and in her book. So, yeah, I'm kind of hanging the July 4th thing on what she said. But you put it all together. Now, I don't know anyone else has taken the Genius Act and put it all together the way that I have and saying something that is as as um, I don't know. It's it's certainly it's going out on a limb, but to say that it's going to happen July 4th, yeah, it'll be the, it'll be one of the biggest days of my career if it happens.
If not, I'll be disappointed, but it's not over if it doesn't.
It's a very bold move to make such an extreme forecast and give it such a specific timeline.
That's not my style.
I, I, I applaud you for that. If you get it right, well.
You may not see me ever again if it doesn't happen. They just end up.
But even if it doesn't happen July 4th, it doesn't mean that it won't happen at at a future point in time. I think it's just all the pieces are coming together, but I don't know that it, it gives enough time for everything.
I mean, he could say something like, you know.
But he could.
We intend to audit Fort Knox and maybe even do something special with the Treasury. I mean, as simple as that. And I'm partying. I mean, it's, it's, I'm coming in. I'm coming in to work. I'm coming in on July 4th in the midst of fireworks to do a a podcast. Say, "Haha," you know, but we'll see. I don't know. It just, it just look, man. I, you can default, you can inflate, or you can try and come up with a situation that allows you to produce. And the only way to produce and to sell that to the world is to abandon the reserve status and.
But keep the dollar as the medium of exchange, any unit of account.
That is correct. And that's exactly right. I mean, it's, it's elegant. It works. And I can't believe I thought about it.
Well, let's see. Either way, there will be fireworks come July 4th. We have to leave it here for now because you have an engagement that you need to get to very quickly.
I do. I do. But uh, oh, okay. So, see, why don't you come say hi? No, she doesn't want to say hi. I always try to get her on camera. Anyways, Michelle, this was great. And I love the back and forth and and I, I don't know. Uh, don't hold it against me if it doesn't happen, but, um, I don't know. There's a real part of me that thinks he's gonna, he's gonna surprise and he's gonna say something. We'll see.
Is it something that would make you bearish on gold?
Um, if the central banks immediately start dumping all their gold. To me, that's that's really none, nothing else matters to me in terms of, um, gold's accumulation in the retail market or the nonsense that we hear from the mainstream. The most well-funded investors and well-informed investors on the planet.
Smartest money.
Have been showing you where they think this is all going in an inelastic fashion. They don't care about the CPI numbers. They don't care about the the uh price of gold today. They don't care about the expectations. They don't care about the war. They're continuing to accumulate gold because they understand too much global debt has been issued and the inability to service it is right around the corner, especially as rates go higher. And, um, you know, I think it's interesting again, I'll, I'll paraphrase it, but I mentioned that, you know, only, only Poland has purchased more gold than Tether over the last two years. And it was Adam Glinski, the head of the central bank of Poland, who said, we accumulate gold because when someone pulls the power to the global financial system, which is based solely on electronic accounting records, well, that sucks. Uh, well, that's why we, uh, why we accumulate gold. Um, anyways, I just thought that to hear that's very provocative to hear from a, a central banker.
Who has been buying gold at levels no one has ever seen before and now says we buy it because someone might shut off the power to the global financial system where based upon electronic accounting records. Well, that's a whole other conversation.
That's for the next one.
With quantum computing and AI and this whole digital infrastructure. That is a whole other conversation. I have to let you go for now though, Andy.
Michelle, I appreciate you and uh, let's do it again soon.
And as always, thank you for watching. If you found this conversation interesting, insightful, educational, entertaining, hopefully all of the above. Please be sure to like, share, and subscribe and help us grow this community. We also have a weekly newsletter that you don't want to miss. It has previews and specials and some exclusive insights. There's a link in the description of this video where you can sign up for that. As always, we do love to hear from you. So, feel free to praise, whine, or just opine. We will see you soon. Until then, stay sovereign.
This is the real story with Michelle McCori.