Top Three Videos – August 3, 2023

Quick Summary Bullets:

Geopolitical Shifts and Power Dynamics

• The financial situation involving BRICS and their desire to distance themselves from America is a multi-faceted and significant story.
• The proposal to merge BRICS and the Shanghai Cooperation Organization suggests a super organization of many nations coming together on commercial terms to trade with Russia and China, sending a clear message to the West.
• The American strategy of raising dollar interest rates could potentially bankrupt Latin American and African countries, forcing them back into the American sphere of influence, despite China’s significant investments in their infrastructure and assets.
• The power center of the world is shifting towards Asia, as predicted by Mackinder in 1905, with Russia and China playing significant roles in this transformation.
• Russia and China are working to insulate themselves against the potential collapse of the dollar, indicating their concern about the global economic situation.
• The new super block of the Shanghai cooperation organization and Bricks are likely to reduce their dollar holdings and sell dollars for gold, undermining fiat currencies.

Financial Warfare and Economic Consequences

• The US economy is ensnared in an impossible debt trap with no escape, as the country’s debt continues to increase and bank credit contracts, leading to higher borrowing costs.
• The dollar and other Western Fiat currencies are facing the same fate now as John Law’s currency was in the 1700s.
• The financial war is escalating to the equivalent of a nuclear war, with the potential to destroy fiat currencies entirely.
• Putin’s only alternative to protect his economy and credibility is to escalate the financial war, which could be the equivalent of a financial nuclear bomb.
• The potential mother of all bear markets in financial asset values could lead to a significant outflow of foreign investments in US equities and bonds, impacting the global financial system.
• The political collapse and rise of Hitler in Germany can be attributed, at least in part, to the economic turmoil caused by hyperinflation, highlighting the importance of managing the consequences of such financial crises to prevent similar catastrophic outcomes in the future.

Gold and Currency

• “The probabilities are overwhelming on Gold’s side that is the best environment to see goals increase.”
• “The way this should work is to tie the currency to gold, which can actually be very easily done.”
• “I think this is almost a fatal complete in the west… Nobody’s paid any attention to this whatsoever and I think that is a huge mistake.”
• “If the credit is tied to the price and value of gold, it simplifies the concept of value and makes it easier to understand.”
• The introduction of a new trade currency and the potential adoption of a gold standard by Russia and China could undermine the dominance of the dollar in trade settlement purposes.

Geopolitical Shifts and Power Dynamics

• The financial situation involving BRICS and their desire to distance themselves from America is a multi-faceted and significant story.
• The proposal to merge BRICS and the Shanghai Cooperation Organization suggests a super organization of many nations coming together on commercial terms to trade with Russia and China, sending a clear message to the West.
• The American strategy of raising dollar interest rates could potentially bankrupt Latin American and African countries, forcing them back into the American sphere of influence, despite China’s significant investments in their infrastructure and assets.
• The power center of the world is shifting towards Asia, as predicted by Mackinder in 1905, with Russia and China playing significant roles in this transformation.
• Russia and China are working to insulate themselves against the potential collapse of the dollar, indicating their concern about the global economic situation.
• The new super block of the Shanghai cooperation organization and Bricks are likely to reduce their dollar holdings and sell dollars for gold, undermining fiat currencies.

Financial Warfare and Economic Consequences

• The US economy is ensnared in an impossible debt trap with no escape, as the country’s debt continues to increase and bank credit contracts, leading to higher borrowing costs.
• The dollar and other Western Fiat currencies are facing the same fate now as John Law’s currency was in the 1700s.
• The financial war is escalating to the equivalent of a nuclear war, with the potential to destroy fiat currencies entirely.
• Putin’s only alternative to protect his economy and credibility is to escalate the financial war, which could be the equivalent of a financial nuclear bomb.
• The potential mother of all bear markets in financial asset values could lead to a significant outflow of foreign investments in US equities and bonds, impacting the global financial system.
• The political collapse and rise of Hitler in Germany can be attributed, at least in part, to the economic turmoil caused by hyperinflation, highlighting the importance of managing the consequences of such financial crises to prevent similar catastrophic outcomes in the future.

Gold and Currency

• “The probabilities are overwhelming on Gold’s side that is the best environment to see goals increase.”
• “The way this should work is to tie the currency to gold, which can actually be very easily done.”
• “I think this is almost a fatal complete in the west… Nobody’s paid any attention to this whatsoever and I think that is a huge mistake.”
• “If the credit is tied to the price and value of gold, it simplifies the concept of value and makes it easier to understand.”
• The introduction of a new trade currency and the potential adoption of a gold standard by Russia and China could undermine the dominance of the dollar in trade settlement purposes.

Transcript Summary:

•  00:00 Gold’s value is likely to increase as the dollar is being replaced as a trade settlement currency by the Eurasian economic union, with Russia potentially backing the ruble with gold to secure its value and propose a new trade settlement currency for BRICS.
• • Gold’s value is likely to increase as the dollar is being replaced as a trade settlement currency by the Eurasian economic union.
  • The idea behind creating a new trade settlement currency was to provide an alternative to using dollars for transactions between Asian countries, particularly for Russia and China, and it would incorporate a mixture of currencies and commodities.
  • Tying the currency to gold can be easily done by setting up a separate issuer of a currency backed by gold, acting as a bank of issuance rather than a central bank managing interest rates.
  • Macleod discusses how a Moscow business paper article written by a member of the EA EU committee suggests that the ruble should be backed by gold in order to secure its value, which is attractive to Putin due to the high interest rates and weakening of the Ruble in the Russian economy.
  • The weakening Russian economy, with a declining currency and shrinking trade surplus, may lead the West to believe they have the upper hand in a potential war, but Putin is not easily defeated.
  • Russia is likely moving towards backing the ruble with gold, which would result in lower interest rates, a more stable currency, and increased security for savers, and there are indications that a new trade settlement currency for the BRICS membership will be proposed at the upcoming BRICS summit.
• 08:40 Russia, along with Saudi Arabia, Iran, and China, are encouraging the use of currencies other than the dollar, potentially leading to a new gold-backed currency for energy sales, while the West is ignoring a major event related to this and the Chinese’s disregard for US attempts to undermine the dollar.
  
  • The mainstream media in the West has not mentioned the confirmation from Russia about a financial agenda, and the US dollar’s trade weighted broke down below a crucial support level, with dissenters in India who have always denied the utility of gold as money.
  • The decline in the purchasing power of the UK’s rupee is driven by Russia, who, along with Saudi Arabia, Iran, and China, are encouraging the use of currencies other than the dollar for exports, leading to the possibility of a new gold-backed currency being used for energy sales.
  • Macleod warns that the West is making a huge mistake by not paying attention to a major event that is likely to occur on August 22nd-24th, which is related to Russia’s new gold proposition and the Chinese’s disregard for US attempts to dissuade them from undermining the dollar.
  • The vulnerability of potential new members of BRICS due to their debt in dollars and higher interest rates is causing distress and motivating them to distance themselves from America.
  • Janet Yellen’s response to questions about a new global currency at a meeting in China was evasive, indicating that the topic is serious and not just a casual conversation.
• 14:41 China’s selling of US treasuries is concerning for trade and commodity transactions, a new gold-backed currency could simplify the financial system, and China’s investments in Africa and Latin America may shift the balance of power away from the US.
  
  • China has been selling off its U.S. treasuries, which is concerning for the treasury secretary as it affects trade and commodity transactions.
  • Trade credit is self-extinguishing and differs from bank credit within a country, as it is only available to businesses and requires financing through a nominated major bank.
  • A new currency tied to gold would be created, allowing banks to have access to it through their Central Bank, simplifying the politics of the situation and avoiding the need to constantly re-weight and rebalance currencies.
  • The price of gold and its value can simplify the financial system, but there may be challenges in dealing with commodity purchases and sales.
  • Brics and the Shanghai Cooperation Organization may merge, forming a super organization of many nations trading with Russia and China, which would send a clear message to the West.
  • China is making major investments in African and Latin American countries, improving infrastructure and creating partnerships, while the US, through the IMF, has provided loans on easy terms that may become difficult to repay, potentially forcing these countries back into the American sphere of influence.
• 22:24 China and Russia are working together to counter the US’s manipulation of global financial crises, with China helping Southeast Asian nations and Russia considering a new trade currency and potentially transitioning the ruble to a gold standard, while the US is trapped in an impossible debt situation with rising interest rates and potential inflation.
  
  • The Latin American and Asian crises in the late 70s and 90s were manipulated by the US through lowering and raising interest rates to bankrupt countries and allow American corporations to profit.
  • China is aware of the danger that Southeast Asian nations face from the strong dollar and is making efforts to help finance them, while also recognizing the potential disaster for America if they try to stop Chinese imports.
  • Russia is the main driving force behind a joint project with China to bring the emerging world together and create an industrial revolution for mutual benefit.
  • Russia’s Trade Surplus has fallen sharply and President Putin needs to act soon to bring his Smo to a conclusion or drive commodity prices higher by undermining the dollar, which can be achieved by establishing a new Trade Currency and potentially transitioning the ruble to a gold standard, providing a better alternative to the dollar for trade settlement purposes.
  • The US economy is trapped in an impossible debt situation, with the government’s interest bill reaching a trillion dollars and higher interest rates looming due to contracting bank credit.
  • The cost of credit will rise as interest rates increase, independent of the Central Bank’s control, and there is a potential for inflation to return due to rising grain and oil prices.
• 31:14 The Japanese financial system is facing cracks as the Bank of Japan’s balance sheet suffers losses, resulting in rising interest rates, while global suppression of interest rates and excessive money printing could lead to destructive inflation and debt, impacting multiple countries.
  
  • Cracks are appearing in the Japanese financial system as the Bank of Japan’s balance sheet is facing losses and they are unable to continue buying bonds, resulting in a significant increase in interest rates.
  • Japanese banks are selling French debt and storm clouds are gathering over currencies, signaling the end of the fiat currency era.
  • The Mississippi bubble and the current financial situation share similarities as both were asset bubbles caused by credit policies of central banks.
  • Macleod discusses the global situation of suppressing interest rates and compares it to John Law’s situation, emphasizing the importance of shorting the currency when the bubble collapses.
  • The Federal Reserve will likely be forced to print more money and raise interest rates to fund the US government, which could lead to destructive levels of inflation and debt, affecting not only America but also Britain, Europe, and Japan, while Russia and China seek to insulate themselves from this outcome.
• 36:55 Foreign uncertainty about the future purchasing power of the dollar could lead to higher interest rates, a sell-off of dollars for gold, and potential undermining of fiat currencies.
  
  • There is no reporting on the financial equivalent of nuclear war in the West, possibly due to ignorance rather than government censorship.
  • For over 50 years, the education system has dismissed gold as part of the monetary system and economists are supportive of Keynesian stimulus, credit manipulation, and interest rate manipulation without actually understanding what interest rates represent.
  • The weakness in currencies comes from foreigners’ uncertainty about the future purchasing power of the dollar.
  • If the purchasing power of the dollar is expected to fall, foreigners will demand higher interest rates to compensate for the discounted future value of the dollar, which could worsen the debt trap and undermine the dollar further.
  • Foreign holders of US treasuries and cash, including the Shanghai Cooperation Organization and BRICS, are likely to reduce their dollar holdings and sell dollars for gold, undermining fiat currencies.
  • Countries holding US debt are unlikely to coordinate a simultaneous sell-off, but individual nations will continue to make their own decisions on how many dollars to hold and how to invest them, with some potentially buying more if yields increase, while countries considering using a new currency in their reserves may need to sell dollars for gold.
• 43:40 The expansion and contraction of credit in the US has been masked by central bank action, leading to a crisis and now a contraction, while bad credit is contracting in the UK and Europe, causing a decrease in nominal GDP and undermining the currency’s purchasing power.
  
  • The expansion and contraction of credit in the US has been masked by central bank action, resulting in limited evidence of the cycle of bank credit expansion and contraction.
  • The financial system experienced a crisis, which was resolved by the Fed and US Treasury, leading to an expansion of bank credit, but now there is a contraction happening, although not yet evident in the US, due to factors such as reverse repos and increased loans on bank balance sheets.
  • Bad credit is contracting in the UK and Europe, leading to a contraction in nominal GDP, and the central bank’s activities are contributing to the undermining of the currency’s purchasing power.
  • Consumer and producer prices fell slightly despite a significant increase in bank credit, as the expansion of credit met the needs of the economy without causing inflation.
  • The restriction on increasing the quantity of banknotes tied to gold prevented the purchasing power of the pound from being undermined, and this system is still applicable today.
  • The value of currencies has been steadily decreasing since the suspension of Bretton Woods, resulting in a significant loss of purchasing power.
• 50:32 Activating gold as a financial weapon could lead to the destruction of fiat currencies, with potential for a major breach in the financial system, while the purchasing power of gold is likely to increase as interest rates rise and currencies decline.
  
  • Activating gold as a financial weapon could undermine the purchasing power of the dollar, leading to the destruction of fiat currencies and a major escalation akin to a nuclear war.
  • Both sides in the financial war between America and Russia are escalating tensions, with the potential for a major breach in the financial system that is far more serious than previous events, and while some believe bringing gold back into the financial system is necessary for stability, others doubt it can be done quickly.
  • The potential decline in financial asset values and the shift of liquidity from US treasuries and equities may lead to a crisis in the gold market, with China likely to receive a significant portion of the capital inflows and people stockpiling commodities as a hedge against the declining purchasing power of the dollar.
  • The purchasing power of gold is likely to increase relative to fiat currencies and other assets, such as property, as interest rates rise and currencies decline, making gold a valuable asset to hold in the face of financial instability.
  • Foreign students in Berlin buying houses with their monthly allowance in dollars led to a collapse of the middle class, bankruptcy of landowners, and the rise of Hitler, showing the need for statesmen to understand and manage the consequences of economic disruptions.
  • Goldmoney is a platform that stores precious metals in vaults around the world, fully insured and not on their balance sheet, and also offers gold coins and deliveries through their branch called Shift Gold, with articles available on their website and the speaker’s Twitter handle being @McLeodFinance.