Andy Schectman: Why The World Is Turning To Gold | Arcadia Economics

That gold bar in that gentleman’s hand is an example of what gold is. It is an asset that is not simultaneously someone else’s liability. Well, hello there, my friends. Chris Marcus here with you for Arcade Economics. And on today’s show with Andy Sheckman, we have something a little bit different be because as you may have seen or heard before, Andy has been doing a presentation when he goes to some of the conferences that he attends that I think has done a good job of laying out perhaps a step back, similar to some of the things that he talks about in our interviews.

But it’s a great presentation that I thought would be helpful for people to see. So today we had Andy record that and to get a better view of some of the forces that have led us to where we are today and what he sees happening. Well, it’s laid out for you here. And with that said, let’s dig in. Today I’ve prepared a video for you to help explain, at least in my own words, why we are seeing many people move to the safety found in precious metals.

And the title of the presentation is called the logarithmic decay of the US dollar. I hope you enjoy it. I believe this is as true of a statement as any I’ve ever uttered. And I do believe that this country has done more to destroy itself in the past few years than any external enemy could have ever have done. And I hope to show you that in the following slides.

The term logarithmic decay is something that I have found great clarity in. It to me, describes what is happening on many levels, socially, morally, economically, geopolitically. The term, in essence says you start to move downward little by little by little by little, then bang. All at once, almost as if you are on the Niagara Falls river, not knowing what lies ahead. The pitch begins to slowly decline until bang.

All at once. And when we talk about many of the things that have happened in this country, the things such as the woke agenda that used to never be part of this country, that is now little by little by little, has been thrown into the vernacular over the last few years and now is in our face. Or cancel culture, or the lawlessness in the cities, or the move away from the nuclear family, or the fact that the justice system in this country is being questioned as to whether or not there is a two tier justice system.

The open borders, all of these things that we have seen little by little by little seem to be increasing dramatically. Now the question becomes whether we’re talking inside this country or the way we are viewed outside. The country or the declining demand for the US dollar. The little by little by little by little, the chipping away at the fabric of this country, at the hegemony of the United States dollar, I think, is unquestionable.

All around us, we see the chipping away, the whitewashing of our culture and the whitewashing of the value. The significance and the admiration of the US dollar seems to be happening all around us. Now. I don’t know where we are. Are we here or are we there on that graph? I’ll leave that up for you to decide. But as we continue through this presentation, I hope to add some clarity to that know when we talk about the number one economic advisor to the United States government.

He is a man who graduated with a degree in music and has a master’s degree in social welfare. This is a man whose main thesis is that the privilege of having the world reserve currency is one we can no longer afford. He has written articles that were picked up in the New York Times called Dethrone King dollar, for which he advocates the immediate relinquishment of the world reserve standard of the exorbitant privilege that we can no longer afford.

When President Trump at the time, slapped tariffs on China, he publicly said, fantastic, maybe now we will lose the reserve status. And when you think about a man whose main agenda, this man being the number one economic advisor to the current administration, is to lose the world reserve currency status, things start to come into focus by weaponizing the US dollar. There has never been a greater example of what it would take to start the ball rolling down the hill for losing the world reserve status.

And we are a country as an example that told Russia that, look, you’re no longer in the swift system. In fact, we’re going to sanction your $380,000,000,000 in forex reserves and treasuries. But this is the same country that invaded Iraq 20 years ago, 20 years ago, under the guise of weapons of mass destruction that we know were never found. 20 years ago, under the guise of installing a new regime that would help Iraq find liberation.

And here we are, 20 years later, still occupying their country, still sanctioning 14 of their banks for having the audacity to trade with an iranian bank, or iranian banks in the pursuit of buying liquid natural gas because they were frying to death in the heat of the iraqi summer. And this is a country that made $90 billion in oil revenue last year. Iraq did. And the oil revenue proceeds are not directed by the Iraqis.

In fact, they are held in an account at the New York Federal Reserve. And Iraq asked the United States for $1 billion a few months ago, and the United States government said, no, not right now. So Iraq took the steps of number one, making trading in dollars illegal. If you own a business and you trade in dollars, there’s a high probability you’ll find yourself in jail and your business confiscated.

They have just publicly said they are kicking out all coalition forces and they have formally applied to the BRICS. You see, much of the world views the west, us, as being hypocritical, where we can make the rules. We can say, you can’t use the dollar for what you did, but it doesn’t matter what we do, even if what we do is being questioned by a country whom we’re still occupying 20 years later after supposedly liberating.

This is a problem. And by weaponizing the dollar, you have taken a very large step in losing the dollar hegemony. Because much of the world is wondering, are we next? If we make the wrong move and end up on the wrong side of the western docket, are we next? And now you have the speaker of the House and the Biden administration talking about actually confiscating. In fact, Janet Yellen just the other day urged Congress to take the steps of confiscating not just weaponizing and sanctioning, but confiscating the russian reserves and using them to fund the ukrainian war.

This is a step that we cannot take. And if we do, there will never be another country that will ever trust us again. If you wanted to lose the world reserve currency status next to weaponizing the dollar, the next thing you could do would be to sign an executive order to go green. The linchpin of the dollar hegemony centers around the protection of the saudi kingdom and OPEC, who then will, for the last 50 years, value oil globally in dollars.

Every single country on the planet has had to accumulate dollars for the last 50 years. This is a synthetic demand that was created out of the fact that through our protection of the saudi kingdom and by extension, OPEC, oil globally will be valued in dollars. And every single country on the planet has had to stockpile them for 50 years to buy oil. So by weaponizing the dollar and signing executive order one 400:57 as one of his first acts in office, in essence, we have taken, as far as I’m concerned, the two biggest steps you possibly could ever take.

To lose the world reserve status, to lose the petrodollar status we are telling the Saudis, hey, thanks for the memories, guys. But we don’t need you anymore. We’re going green. And by the way, if you step out of line, you too can be sanctioned and your assets frozen and perhaps even confiscated. And what we are seeing as a result of these actions is strength in numbers. We’re talking about, for example, the majority of all of the OPEC countries have either applied to BRICS or already in BRICS.

Every one of them is on the Chinese Belt Road and rail initiative. We’ve seen the Shanghai Cooperation Organization really grow. In fact, we’ve seen Iran and we’ve seen Saudi Arabia apply to and be accepted into the Shanghai Cooperation Organization. Iran is a full member and Saudi Arabia is an observant member. They should be entered as a full Shanghai cooperation Organization member here in 2024. They are the largest regional financial and military organization on the planet.

And when you talk about the strength in numbers, we have ten BRICS countries right now, with 35 that have formally applied already here in 2024. As we approach the meeting in Russia in October to where we will find out exactly which countries have been admitted. Another 25 or so have informally applied. When you put these countries together, the Belt Road initiative, which is already 50% of human population and about 70% of global gdp, along with the eurasian Economic Union and the Shanghai Cooperation Organization and the BRICS, you’re talking the majority of human population.

Close to 85% of human population. For the last three years, I’ve been saying that the Shanghai Cooperation Organization and the Eurasian Economic Union would join the BRICS. And here we have just recently, the president of Belarus calling for a summit to do just that. What you are seeing are countries that are aligning in a cooperative, not a coercive, but a cooperative manner. Finding strength in numbers, where you have two of the three largest nuclear arsenals on the planet, the majority of human population, the majority of energy production, the majority of commodity production, the majority of all of the strategic shipping lanes throughout the world, and in an environment where they already have a larger percentage of global GDP before all of these countries are added together, this is what has happened.

By weaponizing the dollar and by signing an executive order to go green, not only have we incentivized it, but I think we are on a path right now to acceleration. As time moves on, I think this will become clearer and clearer and clearer. And when we talk about the expanding bricks, these countries are growing by the day. And I think you will witness a period of time over the next few years where literally those countries that are in the west right now, in the g seven become the distinct minority across the globe.

And the one common denominator with every one of these countries that have either been admitted to the BRICs or have formally applied to the BRICS is that they are very, very resource rich, natural resource rich, and or control major shipping lanes. When you talk about the countries that are in the BRICs right now, or that were just admitted, in particular Egypt and Saudi Arabia and Iran, you are now controlling the majority of the land around and the routes around the Red Sea and the Straits of Hormuz.

And when you add into it Ethiopia, at the same time, you are literally covering that entire region. And this is not by coincidence. This is by design. When you look at all of the countries here in red, those are. That are formally applied to the BRICS here for the next meeting in Russia in 2024, every single one of those countries is either resource rich and or is a strategic country in terms of its proximity to shipping lanes and or transport routes, either on land or on sea.

This is not coincidental. This is not by mistake. And I think you will see this continue. So when you see countries like Venezuela, who in and of themselves wouldn’t really rattle the west too much, moving to join the BrICs, keep in mind that they hold the largest known oil reserves on the planet. And so these countries that are being admitted little by little by little by little by little, chipping away at the dollar hegemony, have severe significance when you look at them in a greater picture, in a bigger picture, you can see very quickly that these countries have been invited to or are being considered to join BRICs for a very strategic reason.

We talked about Saudi Arabia being open to settling other currencies. They said that settling oil with other currencies. And they said this in 2023 at the meeting in Davos. And that was a very provocative statement. This was after they had formally applied to the BRICS. This is after they had formally applied to the Shanghai Cooperation Organization, after they had formally joined the BRICS new Development bank. All very big moves in and of themselves.

But then at the meeting in Davos, to say, we’re open to taking other currencies for oil, well, that’s a big deal, but they haven’t done it yet, right? I mean, they’re trading with China for and. Or selling their oil for yuan and then taking that yuan and converting it into gold immediately on the Shanghai Gold Exchange, they are, in essence, already trading oil for other currencies, slightly, but not really officially.

But in 2024, the United Arab Emirates, which is the 7th largest producer of oil in the world, a country that just joined BRICS alongside of Saudi Arabia, just made the statement that we’re not going to take dollars for oil any longer. And they made this statement three days before, 200 delegates from around the world came to the United Arab Emirates for a UN summit on climate change, which, ironically, was presided over by the chairman of the state owned oil company, United Arab Emirates Oil Company, who told the delegates that, I just want you to know, if we go this route, we’re going to send civilization back to the caves.

We’re just saying. And by the way, we’re no longer going to take oil for dollars any longer. So little by little by little by little, we are seeing the chipping away at the dollar hegemony. And after all, that’s exactly what Jared Bernstein wants. And I think you need to reflect for a moment. If we wanted to retain the world reserve status, would we really weaponize the dollar? And would we really sign an executive order to go green? When every country on the planet must accumulate dollars to buy oil, isn’t it a little foolhardy to say, hey, we’re going to go green, we don’t need this relationship anymore? Or is it too stupid to be stupid? Is it intended? I guess I’ll let you decide that for yourself as we continue to move through here.

And it’s not just what’s happening around the globe, the mismanagement of the dollar, the sanctioning, the coercion, the bullying. What made this country great for the last hundred years is the fact that we were the United States. We were a country that was not divided. We were united. You were not defined by who you voted for. For the last election, it wasn’t a constant battle between red and blue, or black and white, or rich or poor.

This was a country that had unity. This was a country where lady liberty, holding the scales of justice blindfolded, offered a justice system that was equal to all. This was a country where laws and rules and authority were respected. This is a country where we welcomed everybody. But you had to come in legally. You had to come in the right way, as everyone has done before us. This was a country where you would succeed based upon your opportunities, not based upon your race or creed or color or sexual preference, but based upon equal opportunity to everyone.

If you work hard and you keep your nose clean, the sky’s the limit. You can do whatever you want. And I’m an example of that. I’m the least likely person to have ever achieved the level of success that I have this country has offered me opportunities that I will be forever thankful for and thank God for. But the problem now is that we are a country that has deviated from God, has deviated from law and order, has deviated from a system of immigration, lawful immigration, into one that has allowed 12 million people in this country illegally, that has watched our cities, the inner cities, become lawless jungles.

We have watched a judicial system that the world is questioning. Is it fair? Or is there a two tiered system of justice in the United States? This is a country that has become woke, that employs cancel culture, where if you do not agree with me, well, then your opinion means nothing. We are a country that doesn’t listen to one another anymore. And if you never listen to someone else’s opinion, you never grow.

We are a country that I think the world looks at and says, what the hell has happened to the United States? And when you put it together with a country that has been massively destabilized here in the US, at the same time, when 65% of the country is living paycheck to paycheck, 45%, over 100 grand or over six figures, paycheck to paycheck. A country that has the largest amount of public debt, of credit card debt, of mortgage debt, of car debt, of student debt, which is the largest asset of this country, by the way, student debt of 1.

6 trillion is the largest asset of the US government and at the same time the lowest level of savings. We are a country that is not in a good place to stand up to adversity, whether it be socially, morally, economically, spiritually, and at the same time, we’ve messed up our image globally on the world stage, whether it be with what’s happening here at home, or the weaponizing of the dollar, or the coercion, or the wars, or the dropping of bombs all around the world, that much of the world is finally finding safety in numbers in an effort to stand up against.

And I say this with great sadness, not with glee. I say this with great sadness. This country, as I said, offered me more opportunities than I could have ever deserved. So I want you to reflect upon these things as we continue to move through and ask yourself, how about credit? How about the full faith and credit of this country? We are a country that has $151,000,000,000,000 or more in funded and unfunded liabilities.

Medicare, Medicaid, Social Security, government military pensions. All of these things are liabilities to the country with only 5 trillion of assets leading to the statement I just made. Of which 40% is student debt. We are a country that’s broke and insolvent. You talk about the full faith and credit of this country. When we talk about faith, well, we just saw that the faith is being questioned. And when we talk about credit, what credit? We are at about 126 or 7% debt to GDP.

And there has never been a country that crossed 130% that didn’t outright default or hyperinflate, which is the same thing. So when we talk about what made this country great, you could argue that we are a broke, insolvent and wayward country. We have lost our bearings, and we’re a country that continues to throw money around the globe that we have to borrow in the first place. And not only that, borrow money just to pay the interest on the debt, which is rapidly approaching $1 trillion per year.

This is a situation that is unattenable, whether it be morally, socially, economically, all of these things are at an inflection point, and I think will only be exacerbated by the way the world views this country moving forward. One of the things that I think is important to understand as we talk about gold is that gold is not an investment. Gold is wealth. And the most powerful bank on the planet tells us this.

The bank of international Settlements is the central bank, or central bank. They are the most influential bank in the world. And very quietly, in 2019, they whispered to the world, those that were listening, that gold would be the only other tier one asset next to us dollars and treasuries, which had been the only tier one asset since the end of World War II. And so when you realize that the biggest money on the planet is accumulating gold at record levels, and when I say gold, I mean silver too.

But when you realize that the biggest money in the world, who is not only the most well funded, but also the well informed traders on the planet, the central banks, they are buying gold at levels the world has never seen. Over the last two years, they’ve bought more gold than in any time in history. And I want it to be understood that the central banks are not just the most well funded traders on the planet, they are the most well informed traders on the planet.

And they know the playbook. And they are using the suppression of the western paper markets to achieve their goals. By allowing the western commercial banks to suppress the price of gold to make the United States dollar and bond market seem better than it is, they are using that suppression against us. And we are seeing gold not only and silver be accumulated at record levels, but seeing it drained off of the world’s exchanges and taking possession, pulling it off of the exchanges, removing counterparty risk.

That gold bar in that gentleman’s hand is an example of what gold is. It is an asset that is not simultaneously someone else’s liability. And when you see governments around the world selling treasuries at record levels and buying gold at record levels, it’s of no coincidence. Gold has averaged, when you take the appreciation from 2000 to 2024, it has averaged 7. 8% per year, which has outpaced the s and P 500 and has outpaced the bond market tremendously.

At the same time, it has no sanction or confiscation risk. It has no counterparty risk, it has no default risk. It has no risk associated with us treasuries. And I think that is a growing trend. These countries are trading with one another right now in their local currencies. They are not settling in us dollars. They are settling in yuan, in rupee, in ruble, in real. And they are then accumulating gold instead of buying treasuries.

Because part of the petrodollar deal was you value oil globally in dollars. And the excess you put into us treasuries, well, we are seeing countries like China and Saudi Arabia and Russia and Japan, they’re all dumping treasuries. And in place of treasuries, they’re buying gold at record levels because it does the same thing. It has liquidity, it has global demand, but it has no counterparty risk. And that is something that we are seeing.

And the main topic of all of this presentation and of all of the things that I’ve been screaming about for four years is that the world is creeping towards de dollarization. Little by little by little by little by little by little. The chipping away at the dollar hegemony is happening in real time. And I think it’s important to understand when we talk about logarithmic decay, where are we on this graph? Little by little by little by little, we are seeing the chipping away of the social fabric of this country and of the image of this country around the world and of the economic status of this country and of the moral status of this country.

And you can see this term fits so many things. Now the question is, are we able to stop the raft before we get to the falls? And that’s a question for your own mind’s eye. But this is why we buy gold and silver. It is not to become wealthy. It is because it is wealth. And it has been for 5000 years. And the most well informed traders in the world.

Central banks are buying it at levels the world has never seen. Keep that in mind. Wisdom is seeing the truth for what it is. .

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