➡ The Arcadia Economics article discusses a conversation between Chris Marcus and Matt Riley about the BRICS Summit and the potential for a gold-backed unit. They discuss the possibility of this happening around 2029 or 2030, but note that mechanisms are already in place. They also talk about the increase in gold’s value and the decrease in the dollar’s share of foreign reserves. The conversation also touches on the impact of the location of the summit and the potential for de-dollarization.

➡ To avoid sanctions, companies are setting up independent branches in Hong Kong that conduct direct business with countries like Brazil, Russia, UAE, and Saudi Arabia. This allows them to trade in their own currencies, bypassing the need for dollar transactions. China, in particular, is using this method to secure its energy and food needs. This shift could potentially lead to gold overtaking the dollar in international foreign exchange reserves within the next five years.

➡ The value of gold could increase significantly in the future due to manipulation by those who want to maintain a fiat monetary system. This could cause gold to make up more than 50% of foreign exchange reserves before falling back to around 30%. Countries like China and Russia are keeping undeclared gold reserves to stabilize their national exchange rates. The volatility of gold could be increased to discourage reliance on cryptocurrencies like Bitcoin.

Pepe is right about 2029 or 2030 or something like that, probably for a named unit like construct, but the actual mechanisms are already taking place in the background. You know, in the meantime, since that last summit, in our last conversation before it, you know, gold’s up well over $1,000. You told me back around 2020, 100. So you got, you’re, you’re over the $1,000 mark on your forecast. Well, hello there my friends, Chris Marcus here with you for Arcady Economics. And obviously, as you may be aware, although I would say it seems like perhaps less of the world is aware that the Brick Summit is now here.

And obviously there was a lot of fanfare last year where we heard reports certainly from Pepe Escobar about a gold backed unit. And I would say that although I know people were disappointed that they didn’t get a full roll out of that last year. As we’ll talk about with today’s guest, our resident bricks unit de dollarization expert, Matt Riley, who is now, in addition to being a wholesaler in his own business, EF Bullion that he started now also part of Kinesis Money, and has been tracking these things quite closely. So to give people a better idea of what you can expect through the events with this year’s summit and a whole lot more, it’s my pleasure to welcome in someone that I’m proud to have in my favorite speed dial section of my phone, Matt Riley.

And Matt, pleasure to see you here as always. How are you today, sir? I’m doing great, man. Thanks for making time for me and just having a conversation. Well, it’s certainly my honor and pleasure. I can say it’s safe to say you developed quite a fan club with your first report on that unit, which you had told me about even before Pepe Escobar, I believe, was writing more actively about it. I will mention I don’t have it pulled up today, although I’ve shared it before. There was an interview with Pepe shortly before last year’s summit where the interviewer actually asked him about the timeline and he said the rollout or adoption of this is something he saw maybe around a 2029, 2030 timeframe.

So I know people were disappointed they didn’t get a conclusive answer, although I think we did get some confirmation because on the BRICS pay website was listed as a topic under discussion. And anyway, Matt, here is the latest party. This one’s going down in Brazil this year and perhaps you could fill people up to speed with what you’ve been Seeing anything that they should be watching out for or expecting at this year’s summit. Yeah, sure. You know, Pepe is right about 2029 or 2030 or something like that, probably for a named unit like construct. But the actual mechanisms are already taking place in the background.

You know, in the meantime, since that last summit and our last conversation before it, you know, gold’s up well over a thousand dollars. You told me back around 20, 20, 100. So you got, you’re, you’re over the $1,000 mark on your forecast. So just. Yeah, so I mean that, that effectively they’re, they’re implementing a unit like structure where they are exchanging domestic currencies like the yuan for the real or for the ruble and the like and net settled in gold. That’s what that unit FX mechanism is. Whether or not they call it anything else. They’re not going to fix it to a unit of gold, you know, and have a fixed exchange rate.

The whole purpose is to have a floating exchange rate so that balances can be settled. You know, you have to, you want to strengthen your currency, then you have to produce and be able to save. Right. So I wouldn’t expect something that fixes any of the BRICS currencies to gold as much as just net settling and gold that floats in all of the currencies and it’s happening at light speed. You know, the, the ECB came out with a report probably a little over a week ago. Luke Gromen recently highlighted it. You know, the dollar as an exchange, excuse me, proportion of foreign reserves has decreased from over 70% to down to some would say 56% or so right now.

But when you actually include gold in that, it’s down to 46% of foreign reserves. And in the meantime gold since 2015 has gone to 20% just in the last probably four years. Gold has more than doubled its share of foreign exchange reserves both on purchases by central banks and the price increase itself. So all of that gain by gold has come directly at the expense of the dollar, not the one. So it’s happening in real time. You know, whether or not they call it something centralized for right now, I doubt it because it presents a centralized target for ATT and ck.

I would expect some announcements about a BRICS sort of cross border payment initiative. Just like at last year’s summit at Kazan, the central bank governors and the financial policy heads were directed to sort out, you know, hey, given their homework at the next summit, what we need is some sort of clearing mechanism really when that homework was given. It was already created. Now they were just tasked to outline all the rules of the road, how to onboard and off board people, technological standards, implementation timelines, adjustment policies and things like that. And they’ve done that. So we’ll see something like that come out of this summit, but who knows how much they’ll stress it.

Yeah. And Matt, one thing I’d be curious to hear your opinion on is how much the location factors in because obviously last year was in Russia and I remember over the past couple of months, obviously this year in Brazil, hearing people, I guess giving more credence than I would have guessed that whoever’s hosting it and Brazil kind of a little bit of a different perspective than Russia. So that wasn’t going to have the same tone. Is that accurate? Does the host really dictate the events to a certain degree like that or what would you say there? The host doesn’t necessarily dictate the events or the entire event list, but they do have much greater control over publicity and really how things are laid out beforehand.

Like before Kazan, there’s much more saber rattling, if you will, about, you know, gold and international exchange mechanisms and stuff like that because that’s what Russia wanted for obvious reasons. Right. It’s, it’s honestly better for bricks and that any significant changes to the monetary order be announced that, you know, the most innocuous member of BRICS probably is Brazil. Yeah. Big enough economically to still be important and a heavyweight within the organization. Not high profile enough to be a major enemy of the United States economically, things like that. It’s. It would be a good spot to make some changes in a little more gentle fashion.

Okay, makes sense. And by the way, bonus points. Thank you for using the phrase. Saber rattling has always been one of my favorites. I remember Peter Schiff used to use that all the time. And back in my trading floor days, my clerk and I would always get excited when we heard about those or the green shoots or tailwinds or all the other great economic phrases that we have to decipher these days. Although, Matt, another thing that happened since last year’s summit. Yeah, I don’t know. I guess he was probably saying this before last year’s summit as well.

But more publicly, Donald Trump made known his thoughts that any country that de dollarizes, we’re kicking you out of the western system. Now, when we go back to last year, before that came out publicly, it didn’t seem like the brics in particular were too fond of what’s going on. Obviously evidence most clearly by the Fact that they are de dollarizing and talking about it. Hard to imagine based on what we’ve seen with tariff and trade wars, especially with China in the first six months of this year. That and add on that now they’ve been threatened, which they continue to get the feeling that, you know, even in addition to whatever negotiate negotiation dynamics already present, in particular China and Russia never struck me as like cultures that like being threatened, especially by someone that they’re already frustrated with.

So where does that leave us now? I mean, I would think it’s not like the bricks are all of a sudden saying, oh well, after this tariff war, you know, we take it all back, let’s just stick with this. But what would you say to that? You know, the 100% tariff threats from Trump about a new currency or anything else like that? I, I can’t ascribe motive. I don’t know. You know, some people say he’s a, some people think he’s playing, you know, 40 chess. Whatever the case, I can tell you what the result is and it’s just to push the countries further down the road towards de dollarization.

You know, it was already going to be this way, but it made it much more clear the need to have a bifurcated financial system where for example the big four banks in China, you know, Chinese Agricultural Bank, Communications bank, bank of China, another one I can’t remember right now. But they don’t want secondary sanctions risk, right? They have too much global business that does interact with the dollar. So what are they doing to avoid, avoid sanctions, secondary sanctions and things like that. They’re setting up independent branches that are still answerable to the headquarters but are legally independent in Hong Kong.

And then those Hong Kong branches are establishing direct business contacts and correspondent accounts in Brazil, Russia, uae, Saudi Arabia, all the BRICS partners and then some and then conducting bilateral trade that way. You know, I tagged you earlier on Twitter in an article if I could find it here. So basically bank of Communications, we Fang branch in Hong Kong, this is just from five days ago, is now conducting transactions between China and Brazil for everything from fertilizer to pesticides and pretty soon just standard agricultural products where it used to be. All that trade flowed through dollars.

A bank would have to change real to dollars send through a correspondent bank to China. China would change those dollars to R and B typically using losing 3, you know, ish percent, maybe 2 to 3% of the transaction and transaction costs on both of those with the foreign exchange risk and the sovereign risk of seizure in between. There should you get crossed with the United States. Right. They have successfully circumvented that effectively. And what is, what is China short? And I don’t mean from a trading position, I mean what do they need more of? They are short energy and food.

So they have these relationships with China or, excuse me, with Russia established for the yuan ruble exchange and net settling on the Shanghai Gold exchange in gold. And now with the recent reports that most of your audience have probably heard of but about Shanghai Gold Exchange vaults being set up in Hong Kong, okay, poorly kept secret that they’re also set up in Saudi Arabia, uae, Singapore, that that is how the real is going to net settle. And China can get their corn, soy, you name it, from Brazil in their own currency. They’ll still buy from the US and the US dollar yuan exchange, but if the dollar doesn’t dominate the entire grain market, then it’s not a price setter in the same way from a currency perspective.

So these things are, you know, monumental really that China, the world’s, you know, almost largest population, can get its own energy and food and its own currency. Novel idea, right? Well, like, like you’re pointing out, we’re seeing these things happen in front of our eyes. And you touched on that vaulting network, which leads into my next question because I’m pretty sure you’ve seen our dear friend and mutual colleague Vince Lancy. And as he’s talked about what he’s expecting to come out of this, he I don’t think he was saying that we’re going to see this all like rolled out and active tomorrow, but that China is moving forward with the internationalization of the yuan with gold as collateral.

And he evidenced the vaulting network that you just spoke about, is that pretty much in line with what you, how you would phrase it or what you’re seeing? Yeah, absolutely. You know, I’ve read everything that Benson’s put out and most of your audience probably knows about him, but if they don’t go find Vince Lanci VBL on Twitter and substack is gold fix. And if you like it in the written form, he’s got that. If you’d like in the video form, he’s got that man. He’s been the man in the arena on reporting this really on a consistent basis.

So we’re giving the five, ten minute rundown, you know, if you want the graduate course on what’s going on, go check it out. And I guess along those lines, it seems like you’re in agreement then that that is going to be one of the focuses in terms of. We will probably hear. Do you think? Well, I guess let’s distinguish between whether they’re discussing that and moving that forward and whether that’s something that might be publicized and we’ll be able to read more about in the financial media. Yeah, so that’s a great distinction right there. The question is, does it really matter how much publicity they give it if they’re doing it anyway? It matters for gold flows, US Bond market and US Dollar flows and things like that.

And it’s been mattering for years now, but obviously much more in the last year and a half. All right, so the, the publicity aspect of it is just really how bad do they want to poke Donald Trump in the eye in the middle of trade negotiations or basically how aggressive do they want to be on the PR front? So they’re going to publish things, but how much, you know, nation state, the leaders, you know, Putin g and the like, how much they publicize it? I doubt it just because, well, Putin will, but she will probably tone it down.

He’s not even going to the summit because, you know, as much as this system is in motion and I don’t think there’s much that Trump can do to stop it. You know, trade flows today still matter and will matter with the United States, and they’re in the middle of significant trade negotiations. So I don’t expect a whole lot of fanfare and rubbing it in Trump’s face. Okay, that makes sense. And actually reminds me of what you mentioned last year, how one of the issues that some countries were facing is that I think they’re on board with what’s happening yet at the same time, and India was one of the particular examples where it’s like, well, how publicly do we go with this and risk being cut off from the West? So, Matt, last question I have for you here.

Feel free to say you can pick a time length or. But can you describe in 10 years this is what I think all of this looks like in terms of monetary and gold and trade center. Maybe it’s whatever time length it is, but kind of what you see happening and maybe at some point where this, this, this and this happened and left us here, what does here look like? And whether you want to put a timeline or even an estimate on that or not. Sure. I mean, so first I would outline some base assumptions to that.

And one basic assumption we need to make is that there’s not catastrophic World War three between now and that. Right. Because let’s hope not happens or, you know, some major you know, cannibalistic cyber attacks going all over the place, then ultimately it doesn’t matter what you’re invested in. If it’s not directly tangible and you can’t eat it or hunt with it or you know, things like that. So although Matt, if I may interrupt you just for one moment here, since this is an opportunity for history to be made, would you at least like to be the first person I’ve ever heard care to take a stab at if we hopefully does not happen.

But if, if these guys are crazy enough that they did go nuclear in a nuclear event, what is your forecast for the gold price? Like what, what happens to like if it actually gets to that which obviously this would be far from the most important thing. But what would you care to take a stab at that one? I think you’d have very different gold prices from state to state, country to country even possibly, you know, just geographic areas within a state because it’s not settled so much on any exchange. There isn’t a publicized consistent rate. There would be arbitrage is going crazy on.

It’s not even black market at that point, it’s just called the market. But it would be physical and it’d be wildly varying rates, heavily based on how well you negotiate or how well you’re armed. Okay, I think I’ve seen a moose that laid part of this out. So. Yeah. But back to your first question about, you know, what is it in 10 years like the stats I stated earlier about, you know, with gold included, foreign Exchange reserves are 46% $20 gold and gold has doubled, more than doubled its share of that FX reserve just in the last four years.

But really in the last 18 months, it’s not very hard to see at all gold overtaken the dollar in the next five years. You know, if it doubles again, what does it do that at the expense of, you know, if gold goes to 40 or 50% of international foreign exchange reserves and the dollar goes down to 30% and you know, it’s. Don’t forget about the bond holders. Oh, oh, good lord. Yeah. Three, let’s include two. Basically the bond is just an extension of the dollar, right. With a whole lot more duration risk. Again, the treasury note is just a zero day coupon with zero interest.

So that could easily happen within five years. Goal overtakes the dollar. If I were, you know, if I’m trying to pick a timeline where I say, where would I put the betting odds of 50 one way or the other on how long until gold overtakes the dollar I’m probably going somewhere between three to four years from now. Safe to say that you’re seeing an acceleration ahead. Yeah, for sure. And non linear. Right. Gold could touch 50 of FX reserves and go back to 25. At some point I would expect an attack by, you know, whatever you want to call them, the cabal, the lbma, the cme, the banksters.

Like there’s people have all kinds of names for them, right. But the people whose interest is in maintaining a fiat monetary system, you know, whatever the unit of measurement is, they have suppressed. Yeah, exactly. Oh, mother yelling there. So they have suppressed gold for so long and silver as well. And people have heard the, the beach ball analogy, you know, you hold it underwater. They can only suppress it for so long, but they can turn around and when it’s released, the easiest way to manipulate something is to push it in the direction that it already wants to go and accelerate that to the upside.

So they can’t. If at some point they can’t suppress gold any longer, I would expect them to actually manipulate it to the upside and induce so much volatility that it reduces. You know, nobody wants to rely on Bitcoin, for example, as a like long term store value from a monetary sense where you would index things to it because of its volatility. They will try and induce that same thing in gold more than likely at some point. So you may see gold touch greater than 50% of FX reserves only to backtrack to 30. But that’s why China, Russia and others, their undeclared gold reserves are so important to maintaining that stability to where they need the price to rise, to increase liquidity in the global FX market.

But they also need some in their back pocket that’s undeclared, that they can sell in a physical market, in a gold market that is increasingly physically settled in order to stabilize the, the national exchange rates essentially. So I expect an attack to the upside at some point just to try and destroy the system. But that’d be like a five to ten year outlet. Well, I think we’re already in the midst of a historic phase of financial history. Whether the gold and silver prizes are high enough for everyone just yet. But I mean we’re seeing a lot of the things that people in the gold and silver community have been talking about for years or decades and seeing them finally play out.

And Matt, just since I had my Janet photo up there, maybe that’s why she looks so concerned. But I want to leave you and our audience with this, this little nugget that I I think I told you that I’ve been writing a silver report which is now just about done being written. Got a few things to do after that. But just yesterday I was tidying up this section and reminds me of In June of 2024, Janet Yellen says, I think if the debt is stabilized relative to the size of economy that we’re in a reasonable place.

Sure sounds good. Although you see it hasn’t really been stabilized since the 19 maybe since the 80s you could say was it wasn’t too stable in the 70s either. And then of course by the time she was on her way out six months later, she was just sorry that we hadn’t made more progress and believes that now the deficit does need to be brought down. So we will leave that aside. I mean she was Fed Chairwoman and Secretary treasury, so but I guess that’s how things go and why fortunately we have you on here, Matt, to give us the real version of things.

And perhaps just in wrapping up, I know you’re active on Twitter and you could just let people know if they would like to follow you or any of the other things that you’re involved in. What’s the best way to do that? Yeah, my handle is fbullion, but I would also encourage everyone Kinesis puts out a couple of different podcasts now. Andrew McGuire has been doing great work for years now, but Rob Kings, who is part of the Kinesis system as well, and he runs Freedom Reports so at Freedom Underscore RPT is putting out great work now as well.

Just as far as, you know, being on the board of Citizens for Sound Money, he’s doing good stuff. He’s a big part of the push for legislation in Florida and across the United States dealing with state legislators to get sound money bills passed through and make sure that there are no Trojan horses hidden in them that are backdoors for banks to maintain hedge money to try and make them as citizen friendly as possible, so to speak. And he’s doing good work at that. Well, I will have those links in the description field below. And Matt, just want to thank you again a for reaching out last year.

It’s been fascinating to follow. More importantly, a pleasure to know you and I think people really appreciate these reports. I know you’re digging into a lot of stuff that the average person doesn’t get the hours in the day to go through. So we’ll look forward to seeing what comes through in the summit and beyond. And we’ll have to catch up with you again soon, my friend. Yeah, man. Thanks for your time. It.
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