The BRICS countries are building their own precious metals exchange to challenge Western pricing power, potentially leading to a new gold standard without the dollar.
The flight to safety in physical gold has intensified globally, with investors seeking to diversify away from treasuries and counterparty risk.
The LBMA and COMEX are massively fractionalized and rehypothecated, with far more paper than physical metal, risking a market blowup if everyone demanded delivery.
The LBMA has gone from T+1 to T+8 weeks in delivering physical gold, being drained of inventory with 260 million ounces of silver behind 2.9 billion ounces in daily trading.
Gold miners are printing cash at all-time highs, with all-in sustaining costs significantly reduced, making them a high upside, low downside investment.
Big institutional smart money is positioning behind the scenes in silver, recognizing it as undervalued and moving to reposition into sounder footing.
Trump’s tariff policies were forced into reverse when stock and bond markets fell simultaneously, revealing a fragile economic system breakable by a <60 basis point move in bond yields.
The retail investing public has zero exposure to gold and silver, with only 0.5% of the financial matrix invested in physical precious metals.
The BRICS countries and Trump administration understand the LBMA’s Achilles heel is its inability to deliver physical gold if requested, leading to >50 million ounces delivered since November.
The US has become a net importer of gold since November, signaling a shift in global precious metal flows and economic power dynamics.
China has a far better chance of winning the trade war due to years of planning, alternative import sources, and monopoly on critical supply chain inputs like rare earths and solar components.
The escalating trade war is likely to seize up supply chains, disrupt trade, and lead to a recession in the US, with Trump gambling on a V-shaped recovery before the midterms.
Trade tensions are expected to lower inflation expectations and oil prices, potentially benefiting Trump, consumers, and the oil industry, while hurting Russia and the US’s ability to pressure China.
Oil prices could crash to $50 a barrel or even below $40 per barrel in an extreme scenario with global economic slowdown and unwinding of OPEC+ output cuts.
A regime change in Venezuela with a US-friendly government could unlock millions of incremental barrels per day of crude oil, putting downward pressure on global oil prices.
The US has irresponsibly outsourced critical supply chains to China, which has proactively gained monopoly status in critical minerals and alloys with military applications.
A war with Iran would lead to a short-term spike in energy prices, but prices would eventually fade to equilibrium as the worst news passes.
The US has not won a war in a very long time, with losses in Iraq, Afghanistan, Vietnam, and Ukraine, raising concerns about potential conflicts with China.
A regime change in Venezuela would require significant US military involvement to rebuild infrastructure and restore oil production, with super majors in Guyana playing a crucial role.
At extremely low oil prices, the industry would be forced to take production offline, despite not being the most disciplined, to maintain economic viability.
The dollar’s global reserve status creates extra demand, structurally overvaluing it and forcing a $1 trillion per year trade deficit, impairing U.S. export competitiveness while boosting import power.
U.S. manufacturing has become one of the most expensive globally due to dollar overvaluation, leading to the hollowing out of the industrial base, particularly in the Rust Belt, causing decades of stagnation.
The U.S. sells appreciating assets (stocks, private equity, real estate) to the world in exchange for depreciating goods and services, benefiting the financialized economy at the expense of the industrial base.
Structural trade deficits for 50 years have created imbalances, empowering Washington and New York while hurting the heartland, leading to political changes and national security challenges due to reliance on foreign manufacturing.
The U.S. has replaced gold reserves with industrial base to maintain global reserve status, but the current fiat system has lasted longer than the Bretton Woods era, with imbalances in trade balance and industrial base.
The U.S.’s privileged position as the global reserve currency allows it to print dollars and acquire goods and services, but this has hollowed out the working class and benefited real estate, technology, and high-margin sectors.
Boosting neutral reserve assets like gold could alleviate structural imbalances and reduce reliance on US Treasuries as primary reserve asset, serving as glue connecting multipolar currencies.
Transitioning to a multipolar currency world may benefit industrial U.S. but could hurt Wall Street, requiring difficult trade-offs; Secretary Yellen emphasized focusing on Main Street, not Wall Street, for the next four years.
The U.S. real estate market, especially commercial real estate, is concerning due to high house-to-income ratios, 40 years of declining interest rates, and rising default rates.
Reshoring in the U.S. is likely to involve automation and robots rather than a return to low-cost, labor-intensive manufacturing, with skilled jobs in heavy industry still requiring human oversight.
Skilled blue-collar labor outside designated facilities, such as electricians and plumbers, is experiencing a resurgence in salaries due to the difficulty of automating these jobs, especially in high-cost areas.
Bitcoin is seen as a potential neutral reserve asset and global settlement network, offering advantages over gold due to its decentralization, security, and own settlement network.
Automation in high-cost areas like the U.S. is more likely to occur compared to impoverished countries with low labor costs, as the economics of automation depend on the cost of labor in the region.
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