The Imminent Return To The Gold/Silver Bimetal Monetary Standard And The Preceding Trigger Events
The US’ deficit against China currently stands at just over $300 billion and is declining with every millisecond in accordance with Trump's plan to reduce this figure down to $0 and pursue a trade surplus against the Chinese if he can somehow manage to squeeze them further. This means that China will retaliate to save face by applying additional tariffs against US imports, and with that, deepening the trade war beyond the point of return.
The USA has over $800 billion deficit in total that it's reducing even faster, therefore reshaping the global supply chain.
Under the petrodollar and globalisation monetary and economic models respectively, the US had to operate a trade deficit, that is, money was being extracted out of the US, enriching China and all countries including European ones with a trade surplus advantage against the US.
This has the effect of pushing production and manufacturing away from the US to those countries who are then able to export to the US via low tariffs while those said countries imposed asymmetric high tariffs against imports from the US.
This is the primary reason Trump got elected, to put an end to this significant trade imbalance as was designed by the architects of globalism. By the time Trump is finished, the world will be unrecognisable vis-a-vis global supply chain distribution.
All the trade agreements that are highly asymmetric will require renegotiation under the new yet old economic nationalist model, e.g. the "America First", "Jamaica First", “UK First”, and so on a so forth paradigm. This ushers in significant tariff changes around the world to ensure symmetrical trade agreements of which the first was the Trump-initiated NAFTA renegotiation to give birth to the economic nationalist and mercantile USMCA agreement covering the said countries.
The USMCA will form the general framework and the basis of which all additional bilateral or multilateral trade agreements will be modelled. That will render most trade agreements modelled upon the WTO framework agreement redundant. These moves will result in shifting the means of production/manufacturing of critical goods back to home countries and away from China in an attempt to establish symmetric trade.
The disruption to the global economy on the back of such a significant rebalancing of trade and supply chain disruptions will be significant as each country now has to determine how to proceed in stabilising the political, economic, and financial risks in the post COVID-19 and Trumpian era.
The renegotiation of trade agreements on such a worldwide scale creates high political, economic, and financial risks to business by the breaking and reforming of new trading routes and supply chains, and with China now being sanctioned by the US on human rights violation grounds for alleged large-scale organ harvesting and oppressive re-education of the Uighur people, as well as for their “invasion” of Hong Kong, the US now urges other countries around the world to follow suit.
This will accelerate China's isolation because many countries around the world depend on the SWIFT banking system and the FOREX to access dollars to keep what is left of their economy ticking during these delicate economic times.
The global economic slowdown has seen central banks resorting to unprecedented levels of quantitative easing (currency printing) in their attempt to keep the global economy ticking over. This has the result of reducing confidence in the dollar and all other national central bank currencies worldwide. In the wake of the 2008 banking crisis, quantitative easing and interest rate reduction were the prescribed medicine of all central banks. This will significantly affect bilateral and multilateral trade renegotiations as each country assesses one another for financial risks and agrees on what currency should be used for trade settlements.
It is at this moment that gold and silver come into their own. Gold and silver have always been the financial yard stick when confidence is lost in fiat currencies, as is the case today with all reserve currency bonds further inundated by inverted yield curves and negative interest rates. Fiat digital cryptocurrencies did have the potential to lead the way for a global currency reset, however, they are unsuitable because there is not enough international cooperation to recreate standard drawing rights and they also present far too much political risk. Gold and silver have been used as money for the past six thousand years and are leading contenders to settle international trade and aiding the monetary reset.
In the coming inevitable global monetary reset and international trade realignment, there is nothing else with the qualities of gold and silver (limited supply, unforgeable, divisible, and increases at the rate of economic growth) that is capable of forming the point of reference that is essential for an effective monetary reset. There are always questions of whether there is enough gold and silver in the world stock to make transitioning to a bimetal gold and silver standard feasible but these questions are rather disingenuous. Determining this is just a matter of calculating ratios. Once a country determines its M2 or M3 money supplies, a comparison is then made between M2 or M3 to the amount of gold and silver that is held by its central bank and determining the new price of gold and silver in the national currency. Gold and silver will therefore be the linchpin between all national currencies, putting an end to the FOREX and currency speculation.
Once the decision is made to return to a gold standard, the price of gold will experience a significant bull run against all fiat currencies because an extremely large amount of money printing has been happening for 12 years which dramatically accelerated towards the end of 2019 when the repo money market expanded its liquidity. This has further been exacerbated by the COVID-19 pandemic where central bankers have not been able to rein in the money printing machine due to the reduction of economic activities brought about by the global debt spiral. Companies are unable to cover their interest payments on their debts, thus making them technically ripe for substantial reorganisation and cost reductions which they cannot do at the moment due to the risk of pushing unemployment beyond their current extreme levels that would then serve to reduce confidence even further.
The price of gold and silver has been and will remain highly suppressed and manipulated by the COMEX and LBMA for fear that citizens and companies will flock to them, which would lead to a run on the dollar and all other fiat currencies for that matter to the good old traditional safe haven in gold and silver, therefore crashing the international monetary and economic system worldwide.
A run on fiat currencies to gold and silver is inevitable, representing a ticking time bomb for the global monetary system. This time bomb will trigger in the metals derivative markets when purchasers of these paper financial assets demand delivery of physical gold and silver that cannot be delivered because it so happens that paper contracts for gold and silver are no good. With all of these paper contracts chasing a relatively small amount of physical gold and silver, their prices will be sent to the moon.