Top Three Videos – September 21, 2023

Quick Summary Bullets:

Implications for the Commodity Industry

• The weaponization of the commodity industry, particularly in the gold, oil, and base metal sectors, is a developing trend that may have implications for both the BRICS block and the West.
• The deliberate reduction in oil supply by Russia and Saudi Arabia is causing a shortage of distillers, particularly heating oil and diesel, which will have a major impact on prices.
• The shift towards commodities, such as gold, could lead to a decline in the value of the dollar and euro, causing fiat currency values to plummet.
• “If Putin introduces a gold standard for the ruble, it could speed the end of the fiat currency era.”
• Russia and potentially China are considering transitioning to a gold-backed currency, which could have significant implications for the Western Alliance and their currencies.
• Russia potentially holds a significant amount of gold reserves, with estimates suggesting there may be an additional seven to nine thousand tons beyond their declared reserves.

Potential Crisis and Financial System Impact

• The destabilization of currencies and the return of inflation could result in far higher bond yields, reminiscent of the uncomfortable experiences during the post-Bretton Woods era in the 1970s.
• “The adjustment going out of Fiat currencies is going to be extremely painful.” – Macleod highlights the potential challenges and difficulties associated with transitioning away from fiat currencies, emphasizing the potential impact on the global economy.
• “You have got falling financial asset values.”
• The potential crisis may drive yields even higher than the historical level of 15.5 percent, indicating a clear move away from the dollar and towards commodities.
• “If the price of oil goes up, the price of everything goes up, leading to potential inflation and the need for the FED to increase rates.”
• “You could see a crisis in the bullion banking community quite quickly under those circumstances.”

Geopolitical Shifts and Currency Destabilization

• Geopolitical situations, such as the BRICS countries, are pledged to reduce their dependence on the dollar for cross-border settlement, potentially leading to a portfolio flow out of the dollar.
• India’s opposition to gold-backed trade settlement currencies shows a clear move away from the dollar and towards commodities.
• “They would rather obviously accept Chinese Yuan over Indian rupees for reasons. Firstly the rupees are completely valueless in their hands.” – The value of the Indian rupee is diminishing, leading to a preference for Chinese Yuan.
• The potential escalation of conflict in Ukraine could have serious consequences for NATO and the Western world, leading to a major crisis in the financial system.
• Major geopolitical changes are happening without the control or influence of the West, leading to a loss of power and influence in global affairs.

Transcript Summary:

• 00:00 There is a clear shift away from the dollar towards commodities due to deliberate inflation tactics, leading to rising interest rates and potentially destabilized currencies, indicating a new era in the currency world with painful consequences.
  • There is a discussion about the complexities of the global finance system, the weaponization of the commodity industry, and the potential decline of the American Empire.
  • There is a clear move away from the dollar towards commodities due to deliberate inflation tactics by Russia and Saudi Arabia, resulting in reduced supply of distillers and diesel, which will have a major impact on prices.
  • There is a resurgence of inflation and a credit squeeze leading to rising interest rates and potentially destabilized currencies, resulting in higher bond yields.
  • There is a shift away from the dollar towards commodities, indicating a new era in the currency world, which will be painful as fiat currencies are phased out.
  • There is a growing realization that interest rates will not decrease and central banks, like the Fed, will face significant challenges as they continue to hold bonds on their balance sheets without properly valuing them.
  • Rising interest rates will negatively impact the economy, undermine financial asset values, expose over-leveraged businesses, and potentially require central banks with negative equity to rescue commercial banks, leading to instability and decreased tax receipts.
• 14:50 Foreigners are selling off dollars and moving towards commodities, potentially due to geopolitical factors and a desire to reduce dependence on the dollar, as the American government faces an economic downturn and falling financial asset values.
  • The American government is facing an economic downturn with a slump in activity, collapsing revenues, and a growing deficit, while also experiencing falling financial asset values.
  • Foreigners who have been holding onto trillions of dollars in financial interests are starting to sell and move away from the dollar, potentially due to geopolitical factors and a desire to reduce dependence on the dollar for cross-border settlement.
  • The speaker discusses the serious fiscal position and potential crisis that could lead to rising bond yields and a move away from the dollar towards commodities, similar to the situation in the UK in the 1970s.
  • Inflation is expected to rise due to the increasing price of oil, leading to the possibility of the FED increasing rates on their debt, which could result in the emergence of the BRICS initiative.
  • There is a shift away from fiat currency towards a commodity-driven basket of currencies, with countries weaponizing commodities and a race to secure necessary supplies due to the end of globalization.
  • There is a clear move away from the dollar towards commodities, accelerated by geopolitics and Russia’s influence in driving the shift away from fiat currencies.
• 22:49 The move away from the dollar towards commodities like gold is causing fiat currencies to decrease in value, with China standing aside and profiting from the mistakes of others, while Russia and Saudi Arabia consider transitioning to a gold-backed currency, posing a threat to the Western Alliance.
  • India is hesitant to move away from the Western Alliance and embrace gold-backed currency, while China sees gold as a backup but is not aggressively opposing fiat currency.
  • The move away from the dollar towards commodities, such as gold, is causing the value of fiat currencies to decrease, and China, instead of creating problems for others, prefers to stand aside and profit from their mistakes, as seen in their trade relations with America, where they have taken action to protect themselves and view any negative consequences as America’s fault, and while they were initially reluctant to support the new gold-denominated currency proposed by Russia, the changing circumstances may lead to a shift in their stance.
  • There is a move away from the dollar towards commodities, such as gold, and the introduction of a gold standard for the ruble by Putin could accelerate the end of the fiat currency era, but Western governments may not be intellectually capable of responding to this.
  • Russia and Saudi Arabia are considering transitioning to a gold-backed currency, with Russia already indicating that their currency is oil and they will exchange it for gold, which poses a threat to the Western Alliance and their currencies.
  • The value of the ruble has significantly decreased in relation to the price of oil, causing the ruble to collapse along with the dollar.
  • Putin’s legacy is at risk unless he addresses the issue of Russia’s energy supply, as failure to do so could lead to widespread freezing in Siberia.
• 33:48 There is a clear move away from the dollar towards commodities, potentially weakening NATO and leading to a crisis in the global financial system, due to countries like China and Russia using gold as a form of payment instead of currencies.
  • There is a clear move away from the dollar towards commodities, with countries like China potentially using gold as a form of payment instead of currencies like the Indian rupee.
  • There is a move away from the dollar towards commodities, with Russia potentially having a significant amount of gold reserves.
  • The move away from the dollar towards commodities, particularly by Russia, would weaken NATO and potentially lead to a crisis in the global financial system.
  • There is a potential crisis in the bullion banking community due to a shortage of gold and lack of liquidity, which could occur if there is no crisis in the banking system as a whole.
  • The euro dollar market, which involves non-US banks transacting in US dollars, has a total market value of around $93 trillion, in addition to the $15 trillion of bank liabilities, making it a significant move away from the dollar towards commodities.
  • The use of the dollar in global trade has led to the creation of euro dollars outside of the US banking system, which started in the 1950s and has since facilitated the growth of the Euro bond market.
• 41:03 There is a shift away from the dollar towards commodities, raising concerns about the 93 trillion euro dollar market and the potential consequences, while the US may respond with military action.
  • There is a significant amount of short-term liabilities, totaling around 93 trillion, that pose a serious problem and it is unclear where they originated from.
  • The complexity and lack of understanding surrounding the 93 trillion euro dollar market and the global financial system raises concerns about the potential consequences when something goes wrong.
  • Regulations have driven banks to find alternative ways of doing things, such as the euro dollar market, which started due to a Gentleman’s Agreement that allowed Midland Bank to make a profit outside of the agreed parameters set by the Bank of England.
  • There is a shift away from the dollar towards commodities, and the US may respond to competition with military action, as they have done in the past.
  • The speaker suggests that the United States is unlikely to take any retaliatory actions against Putin’s potential move towards a gold standard due to the country’s current troubles and lack of military resources.
  • There is a shift away from the dollar towards commodities, highlighting the unsettling morality of the situation.
• 47:58 Countries are moving away from the dollar and towards commodities, with China, Russia, and other nations forming new alliances and focusing on trade and economic development, while the West loses control and the American Empire’s future is uncertain.
  • The visit of President Xi to Mohammed bin Salman’s palace, with an elaborate show of escorts and soldiers, contrasted with Biden’s brief meeting and dismissal, signaling a clear move away from the dollar and towards commodities.
  • China and the Middle East have made peace, with Mohammed bin Salman playing a key role, and other nations are shifting away from the West towards new alliances, leaving the West with no control over the situation.
  • The speaker suggests that in order to move away from the dollar and towards commodities, countries should reduce spending, run a balanced budget, and reintroduce a gold standard, as the state tends to mishandle fiat currencies, and Russia may lead the way in implementing these changes.
  • The speaker reflects on the decline of past empires and questions where the American Empire stands in its cycle, noting that while the British Empire disintegrated due to financial constraints, the Commonwealth still allows for trade and political influence, whereas America tends to dictate how other countries should manage their economies.
  • There is a shift away from the dollar towards commodities, with Russia, China, and other countries focusing on commercial trade and economic development rather than interfering in the politics of other nations.
  • Politicians today, influenced by their party supporters, intervene in foreign affairs instead of focusing on trade, which is a degenerative process that does not benefit ordinary people in other countries.
• 58:26 Focus on personal and family finances, as well as personal business, to ensure stability during uncertain times; consider minimizing exposure to falling financial asset values and higher bond yields by shifting towards commodities like gold as a form of insurance against collapsing credit and potential currency devaluation.
  • Focus on taking care of your personal and family finances, as well as your personal business, to ensure stability and weather any uncertainties.
  • Interest rates are expected to rise, leading to falling financial asset values, higher bond yields, and lower equity prices, so it is important to minimize exposure and not wait for prices to recover.
  • There is a shift towards commodities as a currency system, with mining companies improving their financial management and focusing on cash flow.
  • Gold has been considered money since Roman times and everything else is credit, so it is important to consider if one is overly reliant on credit and if their faith and credit in it starts disappearing, the value of it will disappear as well.
  • The value of property and financial assets can be negatively affected by a falling currency, so it is important to consider owning physical gold as a form of insurance.
  • The speaker emphasizes the importance of considering gold as a safeguard against collapsing credit and the potential devaluation of currencies, highlighting historical examples of hyperinflation and the need to study the cycles of history.
• 01:07:00 There is a move away from the dollar towards commodities.