Alasdair Macleod: "How Many Ounces Of Silver Are You Holding?"

[00:00:00]China basically knew, right from the outset, um >> [music] >> back in 1983 when they appointed the People's Bank of China as sole agent for the state >> [music] >> in managing uh gold and silver um uh resources, [music] buying, selling, whatever, whatever, alongside its foreign exchange duties. [music] They knew that they needed to accumulate gold and silver against the day when fiat currencies failed.

[00:00:27]I mean, we're going back 40 years, 43 years now.

[00:00:31]Cuz that's when that legislation came in. I mean, I've got copies of it in in English.

[00:00:35]So, um they've accumulated a lot of gold and silver off balance sheet, let's put it that way, rather than on, you know, as part of PBOC's reserves.

[00:00:46]They got stacks of gold. And uh you know, the people who were only permitted to buy gold from 2002 when the SGE was open, they've taken delivery of some 28,000 tons. Now, admittedly, some of that's gone back in scrap, but it hasn't left the country.

[00:01:03]No, no gold was allowed to leave the country. If you wanted to take gold out, you had to get the permission of the People's Bank, which basically wasn't forthcoming, and of course the customs officials.

[00:01:18]2 weeks ago, they turned around and said, "You no longer need to seek our permission to export gold."

[00:01:26]Obviously, it's now just a customs matter. And of course this opens up the link between the SGE and the new clearing and settlement system in Hong Kong.

[00:01:38]And furthermore, they have appointed refineries in Shenzhen to specifically um recast gold for this new operation.

[00:01:49]It's all part of what eventually will be the monetization of gold in the sense that the yuan will take over, if you like, as a settlement currency for gold transactions. Because if you look at what we're doing in the West, I mean gold contracts, I mean whether it's a futures contract or whether it's a forward contract, is not really contract in gold. It's a contract in dollars.

[00:02:17]>> Mhm.

[00:02:17]>> It's paper. And if the dollar's valueless, you don't have a market. And that's what they see. So they are setting up, if you like, the market which will take over from us.

[00:02:29]And already, I mean they've taken most of the world's gold over there. The market's now going to follow. So that's what I see. The first thing they did was they started dumping dollars for everything they could.

[00:02:41]You know, any any gold, you know, if you got some gold, please let us know, we'll give you dollars. Got any silver? Let us know, we'll give you dollars. Copper?

[00:02:50]We'll give you dollars.

[00:02:51]Oh, and by the way, we're going to hang on to our sulfuric acid. We're going to hang on to our fertilizers, because we don't want any dollars. And amazingly, in spite of all the sort of toing and froing over tariffs and all the rest of it, um the trade surplus is standing at a record. More damn dollars. We don't want the stuff. So they're trying to get rid of dollars. Now they can see what's going to happen to the purchasing power of the dollar.

[00:03:21]They've known this for a long time. And indeed, you go back to April the 2nd, which was um uh Trump's liberation day. Um the following week, President Xi did a whistle-stop tour around Southeast Asia.

[00:03:37]Following which, uh suddenly we found that there were plans to open for the SGE, no less, uh which is a purely domestic um operation, to go and open um vaults in Hong Kong and also in Saudi Arabia.

[00:03:52]Why? Because there were two sort of areas. I mean, Hong Kong was if you like, the international center for China. Saudi Arabia, well, this you know, they buy a lot of oil in that part of the world, etc., etc., and they could see what was going to happen to the dollar.

[00:04:05]>> Alasdair Macleod warns that the US dollar is facing mounting long-term pressure as confidence in fiat currencies continues to weaken.

[00:04:14]He argues that China has been preparing for decades by steadily accumulating gold, including holdings that may not appear on official balance sheets, while expanding physical settlement infrastructure in Hong Kong. Macleod also claims China has encouraged banks to reduce exposure to US Treasuries, and argues that Russia and China could eventually support a more gold-backed monetary framework. He points to rising bond yields and significantly higher G7 debt levels as signs of increasing financial strain.

[00:04:48]Based on this outlook, he advocates reducing reliance on credit and prioritizing physical gold and silver held in secure custody.

[00:04:57]>> Well, uh yeah. I mean, what I want to correct you on one thing. Um you're talking about this being bullish for gold. No, it's very bearish for pit for fiat currencies. That's the key to understand here.

[00:05:10]Yeah. So, um I mean, you know, the the dollar's testing this. I mean, let me let me put it another way. The last real crisis we had, oil crisis, was the OPEC crisis of October to January October '73 to January '74.

[00:05:27]Um if you look at what happened to um uh inflation and uh what happened to bond yields, um I can tell you that Japanese uh consumer price uh inflation ran at something like 25%.

[00:05:43]25%.

[00:05:46]Bond yield went up to something like 8%.

[00:05:49]Where is it today?

[00:05:50]You know, the 10-year bond yield is bit below three.

[00:05:54]I mean, the other difference, of course, is that in 1973, Japan's government debt to GDP was about 20%.

[00:06:04]Now it's 240%.

[00:06:08]And I mean, you got similar numbers for all the G7 nations. I mean, we had 25% inflation in the UK.

[00:06:16]And we saw 10- to 15-year bonds, medium-dated bonds we would call them in those days, the gilts, ran up, the yields went up to close to 17%.

[00:06:29]Where are we now?

[00:06:31]Knocking on five.

[00:06:33]I mean, these bond yields are going to go a lot higher, and they're going to break the currencies. That's really what we're looking at. And it's it's happening. I mean, I wouldn't be surprised if we wake up one morning in the next few weeks and find that suddenly this is running away from us. Bond yields are running higher. And with debt to GDPs as we have at the moment, I mean, US 125%, um if you look at you know, the UK is allegedly something like 95%. I think probably more like a hundred and a and something.

[00:07:08]Uh France is about 110, 115%.

[00:07:12]Uh Italy is about 140% um Germany's sort of relatively good, but their economy is collapsing. So, it'll rise, if you like, as the denominator goes goes wrong.