Despite being one of the most mineral rich nations in Central Africa, the economy of Zimbabwe has been a mess for decades.
To help battle the latest round of inflation, the Central Bankers and politicians are turning to the oldest form of money known to civilization. This week, Zimbabwe launched a new “structured currency” backed in part by gold.
The new currency is called the “Zim Gold”, or more simply “ZiG”, and will be backed by a basket of assets that includes foreign currencies, gold and other minerals.
John Mushayavanhu, the governor of Zimbabwe’s Reserve Bank said the ZiG would circulate alongside a basket of other currencies would also introduce a market-based exchange rate.
“With effect from today … banks shall convert the current Zimbabwe dollar balances into the new currency,” he said.
The moved is aimed at establishing confidence in the country’s central banking system which has been in an extended period of hyperinflation since 2007.
The new banknotes come in eight denominations ranging from one to 200 ZiG. The new notes feature a drawing of gold ingots being minted, as well as Zimbabwe’s famous Balancing Rocks, which already appeared on the old ones.
Zimbabweans have 21 days to convert their old cash into new money, Mushayavanhu said.
The ZiG appears to be culminating from developments within the BRICS related countries, which have been reportedly leaning towards a commodity basket common currency for trade between countries. The development of the ZiG mirrors what has been happening in other countries.
Brazil adopted the Chinese Yuan in 2023 for use in international trade and provided a proposal requesting that Argentina accept the backing of a trade deal with Yuan.
Although the dollar remains the dominant currency in both countries, the Yuan has become the second largest currency in Brazil, overtaking the Euro.
As tangible assets, vintage gold coins can diversify an investment portfolio, reducing risk by spreading exposure across different asset types. Many investment advisors recommend precious metals as a safe haven since prices remain relatively stable to the dollar to offset the volatility that can come in the stock market. Tangible assets are an alternative investments that can diversify an existing investment portfolio and provide protection against inflation.
Gold coins can bring unique diversity to an existing investment portfolio, while expanding on an interest in numismatics or history. Beyond potential financial gains, the process of collecting, studying, and preserving historical coins can morph into a numismatic hobby.
Prior to the Great Depression, gold coins were the normal and natural form of money and in common circulation throughout the world. While the government recalled millions and melted them down, millions more were saved from the smelters due to limited personal ownership exemptions in the law, along with exemptions for coins having numismatic value.
During the era of the gold standard, gold coins were the preferred and accepted method of trade and commerce. In recent years, many well preserved Pre-1933 US Mint gold coins have been discovered in historic “hoards” from European vaults, such as the well known Rive d’Or Collection, discovered in a bank in Paris and released in 2008.
Coins having historical significance often appreciate in value, especially those in good condition, with rare mint marks, from limited mintages, those connected with special collections and other particulars. Owning some of these tangible assets can bring personal satisfaction and a sense of connection to the past, in addition to the intrinsic value of the gold.
There are known counterfeits that circulate in the market from time to time, most often from shady sellers. These are easily discovered due to the widespread industry use XRF along with the more affordable devices like the Precious Metals Verifier from Sigma. These devices have become an indispensable tool for local coin shops, pawn shops, “we buy gold” stores, jewelry stores.
As a way to reduce risk, many investors choose third-party graded gold coins from companies such as NGC and PCGS. Coins that have been graded and encapsulated by these types of services have been verified as authentic. Based on an expert analysis, a grade and unique serial number are assigned to each coin during the review process, which can later be used to verify authenticity.
In addition to the Sigma, there are a variety of other devices that assist hobbyists, numismatists and investors to verify authentic products and reduce risk.
US Mint Pre-1933 Gold Coins
American gold coins from the early 20th century and later 19th century are a favorite for many collectors, due to the connection to our history. While these coins have been held by collectors and investors for nearly 100 years, they are among the mot widely recognized throughout the world.
1927 St Gaudens Double Eagle Gold Coin
Pre-1933 gold coins from the US Mint were minted to standards defined by the Coinage Act of 1792. The Act defined and described three distinct denominations.
$10 Eagles – Defined with 247 4/8 grains of pure gold or 270 grains of standard gold. The accepted standard for coin gold during the era was 90% purity, or .900 fineness. This accounted for a significant amount of gold, while being alloyed with a small amount of more durable metals like copper for added strength for circulations. Each $10 gold eagle coin is minted with 0.4838 troy ounces of gold.
$5 Half Eagles – Defined with 123 6/8 grains of pure gold or 135 grains of standard gold. Each $5 gold eagle coin is minted with 0.2419 troy ounces of gold.
$2.50 Quarter Eagles – Defined with 61 7/8 grains of pure gold or 67 4/8 grains of standard gold. Each $2.50 Quarter Eagle gold coin is minted with 0.121 troy ounces of gold.
The California Gold Rush created a huge increase in the inflow of gold flowing into the U.S. Treasury, creating the need for a new denominations to handle the influx. The Coinage Act of 1849 authorized the production of the $20 Double Eagle, which was the largest denomination for a regular issue U.S. gold coin at the time. The Act also established the specifications for the $1 gold coin.
The Liberty Head double eagle or Coronet double eagle was introduced as a pattern coin by the US Mint in 1849 and entered production in 1850. Each $20 Double Eagle Gold Coin is minted with 0.9675 troy ounce of gold. The Double Eagle had an overall weight of 33.436 grams and was made from 90% gold and 10% copper alloy, maintaining the standard for U.S. gold coins.
Throughout its mintage history from 1850 until 1933, more $20 Double Eagle Gold Coins were issued than all of the other denomination. Today, these coins are highly sought after by both investors and collectors, particularly those that are third-party graded and in mint state condition.
Mexican Gold Pesos
The 50 Pesos Gold Coin, or Centenario was first minted in 1921 to commemorate the 100th anniversary of Mexico’s independence from Spain. It is not only a form of currency but also a significant symbol of Mexican pride and heritage.
The coin features the iconic image of the “Winged Victory” (El Ángel de la Independencia) on the obverse, holding a laurel wreath and a broken chain, symbolizing freedom and victory.
The reverse displays the national coat of arms of Mexico, with an eagle holding a serpent in its beak and talon, perched on a prickly pear cactus.
The Centenario contains 37.5 grams (1.2057 troy ounces) of pure gold.
The gold peso coins are available in various denominations, including 50, 20, 10, 5, 2.5, and 2 pesos, each containing a proportionate weight of gold. These coins are both legal tender and investment pieces.
Mexican gold peso coins are valued for their gold content as well as their numismatic value. Collectors and investors seek them out for their historical significance and beautiful design in addition to the gold content.
British Gold Sovereigns
The British sovereign gold coin has a storied history, dating back to its first introduction in 1489 during the reign of King Henry VII.
The modern version of the sovereign, as we know it today, was first minted in 1817 under King George III as part of a major coinage reform following the end of the Napoleonic Wars, with the aim to standardize Britain’s currency and improve the quality of the nation’s circulating gold coinage.
Today, the British sovereign gold coin is primarily a bullion coin for investors and collectors, valued for its historical significance, artistic design, and gold content. While it is no longer used as circulating currency, the sovereign remains a symbol of Britain’s rich numismatic heritage and is considered one of the most prestigious gold coins in the world.
With dozens of unique variations, mint marks and other details, sovereign gold coins have a well established numismatic history, a variety of interesting design variations and are widely recognized throughout the world. The British sovereign gold coin has a rich history as a medium of international trade, a store of wealth, and a symbol of stability and reliability.
Its extensive minting history and role in the gold standard era have cemented its status as a key piece in the world of numismatics and precious metal investment. As an investment, sovereigns are a naturally fractional gold coin are a popular choice among gold buyers that are looking for one of the lowest premium investment coins in the market.
20 Francs Gold Coins
The 20 francs gold coin, often known as the “Napoleon,” is one of Europe’s most famous and widely circulated gold coins with a history that extends back to the early 19th century. The coin was part of a monetary reform that began during the reign of Napoleon Bonaparte that aimed to stabilize the French currency after the turmoil of the French Revolution.
The 20 francs gold coin was designed to be a stable and reliable unit of currency that could facilitate trade and store value. Each coin contains approximately 0.1867 troy ounces (or 5.8 grams) of gold, providing a tangible and valuable asset that has historically been a reliable store of wealth. Its circulation was not limited to France; eventually becoming the standard coin across Latin Europe, playing a crucial role in international trade.
After the creation of the Latin Monetary Union in 1865, the specifications for the 20 francs gold coin became a standard that member countries adopted, leading to the production of similar coins in Belgium, Switzerland, Italy, and other nations, which made it a trustworthy and convenient medium of exchange and investment.
It is difficult to measure the number of gold coins that were minted by LMU member countries due to the extensive period of production and the number of countries that adopted the standard. However, it is clear that millions of these coins were produced over the decades to meet the needs of trade, investment, and currency stability in Europe.
Today, the 20 francs gold coin is primarily sought after as a bullion coin and a collector’s item. It is also popular among numismatists for its historical significance, artistry, and gold content. While no longer in active circulation as currency, the 20 francs gold coin remains a popular choice for those interested in gold investment and European monetary history.
As the value of paper fiat currencies continues to drop, gold coins can help protect wealth against inflation. The relatively small size of the 20 Francs gold coin makes it easy to store, transport, and trade. They are generally highly liquid assets, meaning they can be easily converted into cash when needed.
Austrian Ducat and Corona Gold Coins
The Gold Ducat originated in the Republic of Venice in the 13th century, while the Gold 100 Corona was first minted in Austria-Hungary in the 19th century. The Austria Corona was primarily used as a trade and circulation coin. It was intended to facilitate large transactions and store value in a stable and internationally recognized form. The coin played a significant role in the economic system of Austria-Hungary, serving both domestic and international trade needs.
1914 Austria 4 Ducat Gold Coin
Various denominations of Corona Gold Coins were issued throughout the long period of production until the dissolution of Austria-Hungary in 1918 following the outbreak of World War I. It is known that these coins were produced in large quantities to support the economic and financial needs of the empire.
The Ducat is another famous gold coin from Austria, which originated in the Republic of Venice in the 13th century. Ducats were widely used across Europe as trade coins beginning from the medieval period onward. The Austrian Ducat, particularly the 4 Ducat gold coin, was known for its high purity (.986 fine gold) and was minted for trade and investment purposes.
When Walmart began selling precious metals through their website marketplace last year, it became a convenient way for stackers to add some silver to their order of other household goods.
As the popularity of buying precious metals online grows, many buyers have experienced issues with being charged sales tax in states where metals aren’t taxed. Some buyers turn to social media for advice on how to deal with customer service when resolving sales tax issues.
Sales tax on precious metals is contentious issue, which is a complicated patchwork of outdated state laws that have created issues that online retailers must contend with since South Dakota v. Wayfair decision in 2018.
Since that landmark decision from the Supreme Court, large online marketplace retailers like Walmart and eBay are required to collect state and local sales taxes and remit those to their respective government agencies.
Gold and Silver Legal Tender
Already, 11 US states have taken steps to officially recognize gold and silver as legal tender. More states have pending legislation that either eliminates sales tax on precious metals or recognizes it as currency.
The United States was founded on sound money principles. The founding fathers included in the Constitution the rules that states must follow when issuing legal tender.
“no state shall make any thing but gold and silver coin a tender in payment of debts”
Texas was the first state to establish its own bullion depository, and there is pending legislation that aims to create the first state-issued gold-backed crypto-currency that will be redeemable to physical gold.
While the Federal Reserve continues to battle with inflation and interest rates, Republican lawmakers have introduced new legislation titled “The CBDC Anti-Surveillance State Act” to ban a CBDC in the United States.
In a press release, Senator Ted Cruz said “The Biden administration salivates at the thought of infringing on our freedom and intruding on the privacy of citizens to surveil their personal spending habits, which is why Congress must clarify that the Federal Reserve has no authority to implement a CBDC.”
Dedollarization and the Return to a Gold Standard
The BRICS member nations have been making progress with developing a gold-backed common currency for trade. It’s already been reported that last year, roughly 20% of the world’s oil trade was done in non-dollar currencies, a record high since the introduction of the petrodollar in the 1970s.
China stockpiled more than 225 tones of gold during 2023. According to central bank holdings data, China’s central bank is now holding 2,235.39 tons in gold reserves, almost on par with Russia’s holdings of 2,332.74 tons.
Additionally, other BRICS countries are quickly accumulating more gold. Five additional countries have announced they are joining BRICS, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates. While dozens of others have expressed interest.
Amid an economic crisis with record high inflation over the last year, the country of Zimbabwe announced its plans to issue a gold-backed Central Bank Digital Currency (CBDC) as a way to facilitate easy payments and push for the adoption of local currencies over the US Dollar.
In 2022, Zimbabwe enacted a law that required mining companies to pay a royalty on precious minerals and minerals to the country’s central bank. The royalty rates range between 5% for gold and platinum group metals and 10% for diamonds. Since then, the country’s central bank currently holds roughly 793kgs of gold in reserves valued at roughly $49 million at the current price with plans to grow reserves to around $100m.
Currently, the Zimbabwe gold-backed digital currency that was introduced in 2023, is in use as legal tender and a store of value alongside the Zimbabwean dollar and bond notes.
The land-locked Sub-Saharan country is home to a plethora of natural resources, such as large deposits of coal, chromium ore, asbestos, gold, nickel, copper, iron ore, vanadium, lithium, tin, and platinum group metals. Zimbabwe is a major exporter of platinum, cotton, tobacco, gold, ferroalloys, and textiles or clothing.
The country contains the second-largest platinum deposit and high-grade chromium ores in the world, with approximately 2.8 billion tons of PGM and 10 billion tons of chromium ore.
Leaders in Zimbabwe began the process of returning to the gold-standard in 2023 with the hopes of stabilizing its economy and establishing its local currency in global markets.
The gold price, along with that of other precious metals, is largely driven by commercial bankers and brokers involved in the trading of commodities in various futures markets throughout the world. The three largest gold trading markets are in London, New York and Shanghai.
In the US, we typically track and trade gold based on the New York gold price that is part of the market managed by COMEX and the CME Group. For decades, the price of gold in New York has been heavily manipulated by the large commercial Wall Street banks. This has been well documented in recent years, with many traders from JP Morgan Chase and others having been convicted.
Corruption by members of the LBMA and COMEX and price manipulation on a global scale has been one of the issues brought forth by the BRICS alliance as a leading driver of dedollarization in recent years, which has led to a growing number of local currency trade agreements. These new trade agreements are instead backed by central bank gold reserves and not the petrodollar.
This week, the Shanghai Gold Price topped the $2,100 per ounce resistance, closing the year at a record breaking $2,118.20 per ounce, the highest price per ounce in history.
The Shanghai Gold Exchange is one of the largest physical gold trading exchanges in the world. Established in 2002 in Shanghai, China, it facilitates the trading, clearing, delivery, and storage of gold and other precious metals. The SGE plays a significant role in the Chinese gold market, and has become of the the most influential gold markets globally.
China is a both a major consumer and significant producer of gold. The SGE, being the primary gold trading platform in China, reflects the country’s demand and supply, influencing global market perceptions and, subsequently, prices.
As one of the largest markets for physical gold, the demand and supply dynamics in the SGE can have a ripple effect on global gold prices.
Unlike the New York and London exchanges that trade primarily in paper gold derivatives and futures contracts, the SGE deals largely in physical gold.
This focus on physical gold can lead to different price dynamics compared to markets where paper gold (gold futures and derivatives) is traded.
As gold prices in various markets diverge, more gold miners and refineries are likely to ship more product to markets where they are likely to get a better price. This is likely to lead to further draining of gold from the LBMA and COMEX managed vaults.
Earlier this year, the US Government hit a new milestone. The amount of government debt in the United States has grown to exceed $33.88 Trillion as a result of overspending by elected officials. The growing U.S. government debt is a complex issue with significant implications for American citizens and taxpayers.
This is a significant issue effecting all American taxpayers, whether they realize it or not.
A higher national debt leads to higher taxes in the future. As the government needs to bring in more revenue to service its debt. This leads directly to increasing taxes, pushing the financial burden on citizens and businesses.
A significant portion of the government’s budget goes towards interest payments on the debt. These payments consume resources that could otherwise be used for public services, infrastructure, education, or healthcare.
To manage high levels of debt, the government has resorted to printing more money in recent years, which has directly caused the inflation that we feel today. Inflation diminishes our purchasing power, causing dramatic increase in everyday living costs.
High debt levels also hamper economic growth. Increased government borrowing leads to higher interest rates, making it more expensive for consumers and businesses to borrow and invest, potentially slowing down economic activities.
As more of the government’s budget is allocated to servicing the debt, there is less money available for other spending priorities like social security, welfare programs, infrastructure, and education.
A heavily indebted nation finds its global economic and political influence quickly diminishing. This has been happening throughout the world, as many nations join the BRICS initiative, moving towards a universal gold-backed currency and away from the dollar for international trade and oil. The US is likely to face additional constraints for defense funding, compromising national security measures.
Escalating debt also affects investor confidence. Many already see the debt as unsustainable, which has led to increased yields on government bonds, further exacerbating the debt problem.
Despite all the efforts to stimulate the economy during the last few years, the financial stability of the country has been on a downward trajectory, according to leading economists. High debt levels make the country more vulnerable to financial crises and recession. The Federal Reserve continues the struggle to reach the goal of sub-2% inflation target, while repeatedly raising interested rates to levels not seen in decades. The government’s ability to stimulate the economy through additional spending is limited if it’s already heavily indebted.
Younger generations today are already limited in their ability to buy a house, caused by a combination of the housing bubble and high interest rates. Future generations will shoulder the additional burden with the responsibility of paying off the debt incurred today.
A significant portion of U.S. debt is held by foreign entities. This dependence creates complex international dynamics and potential vulnerabilities, particularly as geopolitical relationships shift.
BRICS represents a shift in global economic power and serves as a testament to the rising significance of emerging markets in the 21st-century global landscape. It has long been speculated that the next phase of growth will include the introduction of a BRICS Currency backed by gold and other commodities and rare earth elements.
BRICS is an acronym representing an association of five major emerging economies: Brazil, Russia, India, China, and South Africa. The BRICS members are all developing or newly industrialized countries, and they are distinguished by their large, fast-growing economies and significant influence on regional and global affairs.
The soon-to-be-released BRICS currency aims to replace the US dollar as the world’s reserve currency. Glazyev confirmed in a recent interview on Tuesday that the BRICS currency is “almost ready”.
According the Glazyev, BRICS countries have a model of a new world settlement currency that is based on a combination of basket of national currencies of the member countries, alongside a basket of exchange commodities. The model shows that this currency will be very stable and much more attractive than the dollar, pound, and euro.
When trade happens in many different currencies, you have high costs of arbitrage of exchange rates between countries. When approaching dedollarization, central banks and countries need to simultaneously consider the fluctuations of national currencies of different countries.
World prices, particularly commodities like gold and oil are still linked to the dollar, so these arbitrage and exchange rates can generate a lot of losses. In addition, BRICS countries face a high uncertainty in pricing as new markets emerge, so at the next stage it is necessary to detach the prices of world exchange goods from the dollar and move to quoting world exchange goods in other units.
“The BRICS countries are moving to a wider use of national currencies in international settlements because they are all convertible in current transactions and are no worse than using the dollar or Euro,” asserts Glazyev.
“World commodity prices are still linked to the dollar, so these transactions can generate a lot of losses. In addition, these countries face high uncertainty in pricing, so at the next stage it is necessary to detach the prices of world exchange goods from the dollar and move to quoting world exchange goods in other units,” he continues.
And what are these other units? This is where the introduction a BRICS currency arises, which would become a common denominator for the formation of world prices for exchange of goods.
Collectively, BRICS countries encompass over 40% of the world’s population and account for roughly 26% of the world’s GDP, representing a substantial share of global trade.
In 2014, BRICS countries established the New Development Bank (NDB). Headquartered in Shanghai, China, the bank supports public or private projects to member countries through loans, guarantees, equity participation, and other financial instruments.
While the BRICS agreement represents a significant geopolitical alliance of emerging powers, the member countries also face individual and collective challenges such as diverse economic structures, differing political systems, developmental disparities, and regional tensions.
Gold Reserves Backing the BRICS Currency
China, as one of the world’s largest gold producers, has a significant amount of gold reserves. The exact amount has historically been a topic of speculation since China doesn’t frequently update its reserve figures. However, in the last few years, China’s official gold reserves have increased dramatically and are significant, making it one of the top holders of gold in the world. According to data, China is holding roughly 2113.46 tons of gold bars as of June 2023.
Russia has been aggressively increasing its gold reserves for several years. By 2021, it had amassed a substantial amount, placing it among the top countries globally stacking gold. This accumulation is seen as part of Russia’s strategy to reduce its reliance on the U.S. dollar in its reserves. As of June 2023, Russia is holding roughly 2,329.63 tons of gold bars.
While India’s gold reserves are not as significant as Russia or China. It’s important to note that gold has deep cultural significance in India, and households in India hold a vast quantity of gold in the form of high carat jewelry and other items, separate from the nation’s official reserves. India’s gold holdings account to roughly 797.44 tons of gold.
Brazil’s Central Bank began accumulating metals and doubled its gold holdings in 2021. Brazil’s current gold reserves are comparatively smaller than those of China, Russia, and India, with data showing a current level of 129.65 tons of gold bars.
Historically, South Africa was the world’s largest gold producer, but its official gold reserves, as of 2021, is the smallest when compared to other founding BRICS nations. The country’s production has decreased over the years due to depth challenges in mining, decreasing grades, and other socio-economic issues. Data from June 2023 shows that South Africa is holding roughly 125.41 tons of gold in its reserves.
Fiat currency, also known as fiat money, is a type of currency that is declared by a government to be legal tender and is accepted as a medium of exchange within a specific country or region.
Unlike commodity money, which has intrinsic value because it is backed by gold or silver coin, fiat currency has no inherent value and is not backed by a physical commodity.
Instead, its value is established and maintained by government decree and the trust and confidence of the people who use it.
Modern currencies, including the US Dollar, European Euro and the British Pound, are all examples of fiat currencies.
The United States began transitioning away from the gold-standard during the first half of the 20th century. During the Great Depression, the government took the extreme step of confiscating all of the gold coins that were circulating throughout the economy and made it illegal for private citizens to own gold.
Many of the gold coins were melted into large format gold bars and were moved to the Gold Depository at Fort Knox, where they remain sealed away to this day.
In the case of the dollar, its value is established and maintained through the authority and credibility of the Federal Reserve. It’s essentially a social agreement that people will accept the currency in exchange for goods and services.
Commodity Backed Money
Fiat currency has no inherent value as it is not backed by a physical commodity. Commodity backed money, which is backed by gold, silver or other commodities, has value due to its intrinsic properties.
The Treasury and Federal Reserve have the authority to control the supply of dollars. They can print more money or remove it from circulation, which can influence factors like inflation and deflation.
The regulators at the Fed and Treasury Department have a few monetary policy tools at their disposal to manage the economy. This includes adjusting interest rates, implementing quantitative easing, and regulating the money supply to influence economic conditions.
One of the major concerns with fiat money is the potential for inflation. Since fiat money is not backed by gold or silver, governments and central banks have the authority to print money at will. If the money supply increases faster than the growth of goods and services in the economy, it will lead to inflation, eroding the purchasing power of money and causing prices to rise.
Unlike commodity money like gold or silver, which have intrinsic value, fiat money has no inherent value. Its value is solely based on the trust and confidence that people have in the issuing government. If that trust wanes, the value of fiat currency can be at risk and individuals and everyday workers will continue to see the purchasing power of the dollar diminish over the years. It can impact the ability to save for the future and plan for retirement.
While physical coins and banknotes are common forms of fiat currency, many of today’s transactions are conducted digitally using electronic forms of money, such as online banking, credit cards, and digital wallets.
Fiat Money CBDC
The Federal Reserve and other central banks are pushing for the adoption of a Central Bank Digital Currency (CBDC), which will allow the government to control how you spend your money, and what you will be allowed to purchase.
While this can be used to manage the economy, it also means that economic decisions are concentrated in the hands of a few, which will lead to potential abuse or mismanagement.
CBDC transactions can be easily tracked and monitored by the central bank and government authorities, raising significant concerns about individuals’ financial privacy and the potential for government surveillance.
The digital nature of CBDCs also makes them vulnerable to cyberattacks and hacking attempts. A successful breach could lead to the theft of funds or disruption of the financial system.
The introduction of CBDCs will continue to disrupt traditional banking and payment systems, affecting financial institutions and fintech companies.
CBDC allows central banks to have more direct control over monetary policy and money supply. Fiat currency is influenced by central bank policy but also impacted by commercial banks and economic factors.
The introduction of CBDC requires additional technological infrastructure and regulatory frameworks for digital payments and security. Earlier this year, the Federal Reserve introduced the FedNow payment gateway system, requiring commercial banks to adopt this new payment system is part of the long-term launch plan.
Banking giant UBS says demand for gold from central banks around the world is likely to surge this year as countries continue to back away from the US dollar in favor of local currency and alternative currencies that are not subject to foreign government sanctions and the weaponization.
In a new report titled Three Reasons to Buy Gold Now, UBS says that it expects central banks demand to drive additional price growth this year.
Based on Q12023 data, the report estimates that central banks will accumulate 700 metric tons of gold worth $48.74 billion this year.
Many central banks have been adding to their precious metals holdings since 2008 and continue to do so at rates not seen since the 1970s.
President Nixon dropped the association of the dollar to the gold standard in 1971, referred to by historians as The Nixon Shock. This set the stage for replacing the gold standard with a petro-dollar standard, forcing central banks to divest their gold holdings and invest heavily in dollars for the import of oil and other commodities and abolishing the Bretton Woods agreement.
The 2008 financial crisis led to many foreign leaders, led by BRICS leaders, to reconsider the long term implications of the dollar based financial system. Over the last 15 years, various countries have been developing alternative systems that would allow them to buy pass G7 imposed sanctions.
The financial crisis was also the catalyst for the creation of Bitcoin. When Nakamoto generated the genesis block on January 3, 2009 the text included in the block included a headline from the The Times that read:
The Times 03/Jan/2009 Chancellor on brink of second bailout for banks
While the data being released by the government shows that economic conditions are stable, everyday Americans are already starting to feel the impact of a long recession. Inflation continues to eat away at take home pay and spending, with many major retailers continuing to close locations and reduce hiring.
The continued weakening of the US dollar is a huge risk for foreign investors and central banks represent the largest group of investors.
With the risk of a full recession hitting the US economy are very high, central banks are wise to continue to move away from dollars and into a safe haven asset.
The core of the BRICS basket currency is expected to be based around gold, silver and other commodities.
UBS is predicting gold prices will continue to climb this year and in to next as the fiat currency wars begin to heat up.
The Securities and Exchange Commission launched another attack on crypto exchanges Coinbase and Binance this week, a move that had been expected. Given the overlap with the timeline of the Federal Reserve forcing banks across the country to implement FedNow as part of the backbone of an ongoing effort to implement a central bank digital currency.
The charges against Binance allege that the exchange “misled” its users about how their deposited funds for staking would be used, including by allegedly funneling customer assets into separate entities owned and controlled by its founder, Changpeng Zhao.
The charges against Coinbase allege that the company is acting as an unregistered broker and exchange. The government alleges that the Coinbase’s flagship prime brokerage, exchange and staking programs violate securities laws, adding that the company “has for years defied the regulatory structures and evaded the disclosure requirements” of U.S. securities law.
The SEC is demanding that the company be “permanently restrained and enjoined” from continuing to do so.
Gary Gensler, a long-time advisor to Sam Bankman-Fried and the FTX Exchange prior to becoming the Chair of the SEC, has made statements in the past that he believes that there should be less cryptocurrency options in the marketplace.
The cases are likely to extend for years and will likely have long-term implications for the future of crypto investing that extend far beyond only these two companies. The agency is targeting the marketplaces where trades are brokered and cleared, which is at the heart of the cryptocurrency industry’s critical infrastructure., an unwelcome development for pro-crypto groups like the Blockchain Association.
However, advocates for crypto claim that Congress is responsible for establishing the laws regarding digital assets, with two proposals currently circulating in Committees to create a federal framework for regulation for crypto assets.
“Contrary to what [SEC Chairman Gary Gensler] says, there is no regulatory clarity for digital assets,” said Kristin Smith in a statement Tuesday. She is the CEO of Blockchain Association, a pro-crypto lobbying group who also pointed to two regulatory proposals the House currently under debate.
The Federal Reserve continues to drive CBDC efforts, while gaslighting the public with denials about their ongoing efforts to implement a central bank digital currency as the use of the dollar continues to dwindle around the world.
While the FedNow service is being pitched as a solution to the high fees charged by private banking networks, the platform will also enable the Federal Reserve to launch an assortment of consumer-to-business, business-to-business or consumer-to-consumer.
Topics around CBDC implementations have organically risen as issues in the current presidential race.
While the FedNow service is initially restricted to interbank transactions, Kennedy points out that this is “the first step in banning and seizing bitcoin as the Treasury did with gold 90 years ago today in 1933.”
He goes on to explain that digital currency could give the US government power to freeze and seize citizens’ assets or even limit your spending when you fail to “to comply with arbitrary diktats.”
The exchange saw the withdrawal of more than $700 million dollars in customer assets this week, with huge sell-offs occurring for certain tokens that were outlined in the government’s lawsuit.
The government’s war against bitcoin and other cryptocurrencies is reminiscent of the efforts to restrict gold ownership and gold bank withdrawals leading up to the government seizure of all privately owned gold in 1933.
Many of the tactics being used by the government are to sow Fear, Uncertainty and Doubt (FUD) and to keep consumers and everyday Americans confused about cryptocurrencies and scared of risking their financial security to private digital tokens. While at the same time, failing to warn or be transparent with the public about the inherent dangers of a central bank controlled digital form of money.
The government does not like competition. The Federal Reserve sees the use of any non-central bank controlled digital currency as a competitor to the dollar. Compared to crypto, gold and silver are the most trusted and proven long term store of value.
Private ownership of precious metals like silver, gold and platinum has been legal since 1974. There are currently an assortment of States, such as Texas, that are pushing to return to the gold-standard with the introduction of precious metals backed digital tokens that can be exchanged for gold.
The Goldback is an existing physical gold-based private legal currency in several states, with the gold-foil notes being issued for New Hampshire, Utah, Wyoming and Nevada is also among the option available to investors.
If you’re an investor looking to use crypto to buy silver bars, you can find a variety of trusted and reputable online bullion dealers who accept various forms of crypto for payment and have the generic 10 oz silver bars shipped directly to your door.
