ONLY GOLD STANDS AGAINST THE FINAL CATASTROPHE
by Egon von Greyerz
GoldSwitzerland.com
March 21, 2019
Have the Ides of March been delayed in 2019? Normally the Ides of March just means the date March 15th. Shakespeare made the expression ominous as it was the day that Julius Caesar was murdered. Today in 2019, the 29th of March seems more significant than the 15th. Because on the 29th, we first have the conclusion of Brexit. Or maybe we don’t! Brexit has been a tortuous process that after 3 years has got nowhere. All it has done is to reveal the EU elite’s megalomania as well as their intransigence. It has also revealed the complete incompetence of the UK government as well as Mrs May’s total indecisiveness and her inability to distinguish between activity and achievement.
VALUE OF CASH NO LONGER DOUBLE THE VALUE OF GOLD
March 29th is also very important in the banking world since it is the date when gold is recognised as a Tier 1 asset and thus equal to cash. Until now, gold was only a Tier 3 asset and its value was taken at 50% for the purpose of a bank’s solvency. It is of course totally ridiculous that cash or fiat currencies which we know always go to zero over time, should have been taken at twice the value of gold.
There are people speculating that gold becoming a Tier 1 asset will have major significance for the gold price. Also, some market observers even think that this is the beginning of a new era with gold again resuming the mantle of backing currencies or SDRs (Special Drawing Rights). Obviously this would require a substantial revaluation of gold in relation to the dollar in order to achieve sufficient cover for the debt outstanding.
So shall we beware of the Ides of March as Shakespeare said and will they be delayed to March 29th in 2019? I doubt that Brexit, which is a mess that won’t end well, will be resolved by March 29. Also, the global debt situation will necessitate a restructuring of the currency system. And sadly, there are no SDRs or no new government crypto currencies that will make the debt just disappear. As the story goes: “All the king’s horses and all the kings men couldn’t put Humpty back together again.”
But even if the Ides of March are not delayed and March 29th 2019 does not have a major influence on the world, it will serve as a warning of things that are likely to happen in the world financial system. Desperate debt laden governments will take desperate decisions. We could easily see a time when the US devalues the dollar significantly or introduces a crypto dollar and backs it with gold at a massively higher price.
HEGEMONY OF DOLLAR SOON TO FINISH
I doubt that the US will succeed in maintaining the hegemony of the dollar in the longer term, for a number of reasons.
Firstly, the US is unlikely to be able to prove that they have the 8,000 tonnes of gold that they purport.
Secondly, China and Russia would never accept that the debt infested USA is still in control of the world’s reserve currency. A country with 60 years of real deficits, 45 years of trade deficits and at least $200 trillion of debts and unfunded liabilities does not deserve to have the reserve currency of the world.
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