Edging Towards a Gold Standard

Alasdair Macleod, Quinton Hennigh and Michael Oliver return as guests this week.

Few people understand that the dollar became the world’s currency because of an agreement between the Nixon Administration and Saudi Arabia not long after Nixon detached gold from the dollar and the international monetary system in 1971. The agreement was for Saudi Arabia and OPEC to demand payment for all international oil sales in U.S. dollars, thus ensuring a constant and growing demand for dollars. Soon thereafter not only oil, but virtually everything that sold internationally, was denominated in dollars. The U.S. Treasury and Federal Reserve were free to create endless amounts of dollars out of thin air that Americans could use for generations to buy the world’s goods. It enabled America to live beyond its means since 1971 to consume and finance the greatest military might the world had ever seen to bully its way into foreign lands. 

But with Russia now making a similar move by demanding that “unfriendly” countries pay for life-necessity gas imports with Russian rubles, the days of America’s currency dominance are nearing an end. Russia is likely not seeking to own the world’s reserve currency, but that announcement very quickly allowed the ruble to return to its pre-Ukrainian invasion in just a matter of days. Russia, which can count on more than 50% of the world’s population living in “friendly” countries, including giants like India and China, appears to be in the driver’s seat economically, if not militarily. 

Alasdair explains why, in time, the winner of this financial battle will most likely be gold meaning that gold denominated in dollars and other fiat currency is likely heading to much, much higher levels. Quinton Hennigh joins me to update us on Eskay Mining with its emerging world class gold and silver discovery in British Columbia and Michael provides his latest momentum and structural analysis of the debt, equity and precious metals markets.

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Alasdair Macleod has a background as a stockbroker, banker and economist. He is a Senior Fellow at the GoldMoney Foundation and Head of Research at Goldmoney.  His experience encompasses equity and bond markets, fund management, corporate finance and investment strategy. His weekly articles written for GoldMoney are posted on his blog at https://www.goldmoney.com/research/goldmoney-insights Because of his deep insights into underlying market dynamics, Alasdair is one of the most frequent guests on Turning Hard Times into Good Times.

Quinton Hennigh is a member of the Crescat Capital management team and a director. He serves Crescat as the firm’s geologic and technical advisor. He is a globally renowned exploration geologist with 30+ years of precious metals mining experience. Dr. Hennigh began his career in gold exploration after obtaining his PhD in Geology/Geochemistry from the Colorado School of Mines. Early in his career he worked for major gold mining companies including Homestake Mining (now Barrick Gold Corp.), Newcrest Mining, and Newmont Corp. Later, Dr. Hennigh founded Novo Resources Corp (TSXV: NVO), acting as its CEO and currently serving as Non-Executive Co-Chairman. He has played a key role in major global discoveries such as Novo’s Pilbara assets in Western Australia, First Mining Gold’s Springpole gold deposit in Ontario, Kirkland Lake Gold’s Fostervillegold mine in Australia, the Rattlesnake Hills gold deposit in Wyoming, and Lion One’s Tuvatu gold project in Fiji, among many others.

Michael Oliver entered the financial services industry in 1975 on the Futures side, joining E.F. Hutton’s International Commodity Division, NYC. He studied under David Johnson, head of Hutton’s Commodity Division and Chairman of the COMEX.

In the 1980’s Oliver began to develop his own momentum-based method of technical analysis. In 1987 Oliver, along with his futures client accounts (Oliver had trading POA) technically anticipated and captured the Crash. Oliver began to realize that his emergent momentum-structural-based tools should be further developed into a full analytic methodology.

In 1992 he was asked by the Financial VP and head of Wachovia Bank’s Trust Department to provide soft dollar research to Wachovia. Within a year Oliver shifted from brokerage to full-time technical research. MSA has provided its proprietary technical research services to financial and asset management clients continually since 1992. Oliver is the author of The New Libertarianism: Anarcho-Capitalism. 

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.