Gold Breaks $3,000, But Here’s Why Silver Could Steal the Show…

Mike Maharrey: Greetings. I'm Mike Meharry, a reporter and analyst here at Money Metals, and I'm joined today by Stuart Englert. Stuart is a veteran journalist and the author of I think nine books including Rigged, exposing the largest Financial Fraud in History, which gets into the way the government and the powers that be have tried to trick us into thinking that our fiat money is as good as gold, and he's also one heck of a musician. So Stuart, you're a Renaissance man. Thank you so much for coming on the show today.

Stuart Englert: Good to be with you, Mike. Good to be with Money Metals.

Mike Maharrey: Well, we appreciate you. We appreciate the contributions that you've made over to our website moneymetals.com/news. And I wanted to start off talking about a topic that you actually wrote about not too long ago, and that's gold revaluation. And I think this can probably dovetail into a little broader discussion about the state of our money and some of the things that you hit on in your book. But before we get into the bigger picture, can you start off by explaining exactly what is meant by gold revaluation? I think people hear this in the news and they're like, I don't know what this means.

Stuart Englert: Sure. Well, I'll do my best here. Gold revaluation involves a legal resetting of the official or government's gold price. Alright. The gold price can increase or decrease with a revaluation, but the four major revaluations that have occurred in US history have all seen the price increase, the official price rise. And those were in 1884, 1934, 1972, and 1973. The current official or statutory gold price is $42.22 an ounce. And that was set by an amendment to a law back passed in 1972 called the Par Value Modification Act. And what it did was revalue gold by devaluing the dollar. It was approved by Nixon in 1973. And the statutory book price is yes, the statutory price is the book value of the gold held by the US Treasury. So the official gold price is not the same as the market or spot price of gold, which is presently around $2,900 an ounce.

Mike Maharrey: Right. That's a perfect explanation of that. And as you mentioned, this talk of gold revaluation isn't unprecedented. And I think to me the most significant that I've kind of focused in on is when FDR did it back in the 1930s, but as you mentioned, it's been done since then as well. So, let's say the government does do this. What's the benefit? Why would they want to revalue the book value of the gold that supposedly is sitting in Fort Knox?

Stuart Englert: OK, as I mentioned, revaluing gold higher would increase the book value of gold held by the US Treasury. This would allow the federal government to expand its balance sheet, borrow and create more currency to pay its bills or manage and restructure its debts. As has occurred in the past. It likely would also boost gold imports since gold flows toward premium prices. And it also could encourage gold production by creating a profit incentive for miners.

Mike Maharrey: Right. So good deal for the government, and I've often said that the Federal Reserve and the monetary policy and this persistent debasement of the dollar, whether it's through something like revaluation, which is a pretty radical move or just the everyday inflationary pressure that is built into the system, this is kind of the engine that drives what arguably is the biggest government in the history of the world. The Federal Reserve basically incentivizes and I guess facilitates the ability of the federal government to borrow and spend, as you just mentioned,

Stuart Englert: It finances the government debt. That’s what it's doing.

Mike Maharrey: So, it's great for the government. And this explains why government people are always eager to devalue gold, whether you go back to Rome with clipping, literally clipping gold out of coins to what they do today. But what's the backlash on the people? Because I'm going to guess that this is beneficial for the government, but not so much for me.

Stuart Englert: Well, it could benefit gold bugs, actually. First of all, raising the official gold price would benefit gold owners by formally acknowledging and reaffirming that gold is a fundamental monetary asset. I think the mere fact that it becomes into the public's attention is good for people that are advocating sound money and a return to some type of gold backing. But you're right, people that are only holding dollars, it wouldn, they wouldn't fare so bad with a higher gold price. Since gold is priced in national currencies, revaluing gold upward would result in devaluation, as I mentioned earlier, of those national currencies, which includes the US dollar. And if gold revaluation is used to expand the nation's balance sheet and its indebtedness, the dollar would depreciate and lose additional power. And that's always the case with fiat money.

Mike Maharrey: So, given that this is kind of par for the course when it comes to the government in the way it handles its money, do you see this as kind of part of a bigger picture? Is there something else that's going on deeper under the surface that is kind of bringing this up now?

Stuart Englert: Well, yeah. I absolutely believe that the United States as an empire is at a crossroads with its monetary system. We're in dire financial straits. If you look at the national debt and the total US debt, not just of the federal government, but the state government, the local government and the corporations and the individuals -- we're laden with a lot of debt. And in addition to that, we've had 50 years of trade deficits. We have these huge trade imbalances and the dollar is too strong. President Trump has talked about this; he wants to increase exports. Well, how do you do that If your dollar is strong, you can't, you've got to weaken the dollar. And revaluation would do that.

Mike Maharrey: Right? So how much would they have to actually revalue gold to make it at a price that actually represented the realities of our monetary system? Do you have any idea of what that number would be? I've heard $10,000, I've heard $15,000. What's kind of your thought on that?

Stuart Englert: I have no idea because I'm not much of a mathematician and I haven't run the numbers.

I'm a wordsmith if you will, but I've read the same things that you have. Nick Behe wrote a book years ago called $10,000 Gold, and James Rickards has suggested $15,000 an ounce and he's since increased that I think to 20 some thousand dollars an ounce.

Mike Maharrey: I remember a few years ago Rickards was on $10,000 gold, so he's bumped that up quite a bit over just the last probably decade.

Stuart Englert: Absolutely. And that's because the money supply is growing and the indebtedness is growing, so it only makes sense that it would have to increasingly go higher.

Mike Maharrey: Now we've seen quite a bull run in gold over the last year, year and a half, and we're seeing much increased central bank gold buying. So, people are obviously interested in gold, they recognize it as a sound money asset, and a lot of people are talking about the possibility of de dollarization. Is that something that's kind of on your radar that maybe the world is becoming a little bit more sour on the dollar and they're starting to turn to gold and maybe even other currencies?

Stuart Englert: Well, sure. It's been said before that the dollars is the prettiest pig in the pen. And I believe that's true. It's the world's reserve currency and that's why it has stature and it's still used in the bulk of trading and transactions around the world. But people that are using the dollar, other countries are figuring out that it's overvalued and the debt instruments, the US debt instruments are bonds and treasuries are not as viable, if you will, or sound as they used to be because of our indebtedness and trade imbalances. So that's why they're accumulating gold. That's why the central banks around the world have been on a gold buying spree for the last 15 years. Their gold purchases, net purchases have increased for that many years, which indicates they're losing confidence in the dollar.

Mike Maharrey: Yeah. So we've talked a little bit about the fact that to truly, we've got what I think, what'd you say, $40 and change is the current set price. And then we have a market spot price that is, as you mentioned, $2,900 give or take -- kind of bouncing around in that range right now. And we've talked about the fact that truly revalue gold. We're talking 10, 15, 20, a much bigger number than what we've seen. Why is there this discrepancy do you think, between the spot price, this set price, and what would actually probably be a more realistic price for gold? How have they managed to keep gold even looking as good or as bad as not bad? How do they keep the dollar from looking as good as it does compared to gold?

Stuart Englert: Well, it's multifaceted. First of all, you have to remember that the world hasn't been on a gold standard for over 50 years. So the majority of people are not experienced, are knowledgeable about gold as money. The older people like us that grew up, I guess, I don't know your age, Mike. I'm 63, so I remember a little bit about silver being taken out of the coinage, and I remember when Nixon took us off the international gold standards, but the majority of people alive today are not aware of that. And then there's been, I'd call it a propaganda campaign on the part of the government to discourage gold body buying and to make people think that the dollar is as good as gold. And that was the intent of the Bretton Woods agreement, which fell apart 50 some years ago. So I think there's a combination of factors know proposed Fort Knox Gold audit that included the phrase conspiracy theory and conspiracy theorists nine or 10 times without answering any real valid questions about the nation's gold holdings. So there's a tactic in the mainstream media to disparage gold and make gold proponents look wacky, I think. And then I guess you know who Dave Ramsey is? The talk show host that talks about getting out of debt, which I support. He's called gold a stupid investment and encouraged listeners to sell their gold. And then I heard Susie Orman, who's another financial guru, if you will warn people against buying physical gold. She recommended owning gold through an ETF. Though ETFs are among the mechanisms that are used to suppress the precious metal prices in the futures market also. So there's been a concerted effort to disparage gold, to disparage gold ownership. But I think that mask is being removed, if you will, and if people follow what the central banks are doing around the world, I think they'll understand what's going and what's going to transpire.

Mike Maharrey: Yeah, I think part of the problem too is that they've managed to disconnect the concept of price inflation from monetary inflation. Now when we say inflation, it's just, oh, prices are going up. But of course prices can go up for all kinds of reasons, and it allows the Federal Reserve and government people and their pundits and supporters to basically say, oh yeah, we're having inflation because of this oil shock or because of Putin's price hikes or greedy corporations or whatever it is. And people don't recognize the inherent connection between this constantly increasing money supply, which is made possible by the fact it's backed by nothing, and the fact that prices are going up. And it almost feels to me, and I'm interested to see if you have this same sense that they're starting to have a hard time keeping the lid on that, right? They were able to kind of hold off that price pressure after the 2008 financial crisis for a while, but after the pandemic, it's kind of cut loose and I'm wondering how long they can keep the lid on it. Is that kind of your sense as well?

Stuart Englert: Oh, absolutely. It took me a while to understand the difference between monetary inflation and price inflation. Monetary inflation is an increase in the money supply, which depreciates its value, where price inflation can be caused by different factors, supply and demand issues, but it also can be caused by monetary inflation. So yeah, I'm on the same page with you there.

Mike Maharrey: So, you've talked a little bit about the way that the government's run this psychological campaign, and we also know that there's some of these manipulations that can be done with the paper markets and whatnot. Arguably the gold price is much lower than what it probably would be under completely natural market conditions. Do you think that at some point the powers that be, you're going to lose control of that and you're going to start to see gold really begin to increase regardless of whether they do the revaluation or not? Is gold going to revalue itself at some point?

Stuart Englert: Well, that's a good question. Either way it's going to happen, whether it's by law and legislation and a government or a leader moving back to gold, or whether it's a grassroots effort, if you will, that blows the lid off the paper derivatives market. I keep wondering if we got rid of derivatives, all this paper trading, what the price of gold would be. Can you imagine?

Mike Maharrey: Yeah, it's hard to tell.

Stuart Englert: I keep asking myself, where do these derivatives come from? I think they're conjured out of thin air, just like fiat currency. I was going to say just like the money, but who creates them and how do they suddenly appear and why were they created? If we look at some of the documentation they were created in the gold and silver market to suppress the price.

Mike Maharrey: Well, I keep wondering that anytime that it's like, there was the famous speech, I think it was the first Star Wars movie where the guy's talking about the harder you squeeze, the more systems that are going to go through your fingers. And it feels like we're at that point with the monetary system, they keep squeezing harder and harder, and it's like, can they control this any longer? And it's really going to be interesting to see how this plays out over the next few years because there's so much, I would argue there's a lot of mal-investment. And of course there's just piles of debt in the financial system because of the way that the Federal Reserve has manipulated the money supply. And we still haven't dealt with a lot of those things yet. So, it'll be interesting to see how those things come down the pipe.

Stuart Englert: Many of the markets are overinflated, if you will.

Mike Maharrey: Yeah, yeah, exactly.

Stuart Englert: In the housing market, the stock market, the bond market, all these markets are overinflated, but gold is held back in comparative. If you'll, and we see these bubbles pop over and over and over, the tech bubble, the housing bubble, well, what's the next bubble that's going to pop? And every time these bubbles pop, I think a few more people become educated about our monetary system and the fiat currency and how it loses its value.

Mike Maharrey: Yeah, I think a lot of people have deemed this the everything bubble, because it really is. I mean, you can look at all the way down virtually every asset class, again, other than precious metals and a few other commodities, there's so many things from art to antique classic cars, all of this money has flowed into these things over the years. And that's what I try to explain to people, that when you have this monetary inflation, it doesn't just show up in the price of groceries, although it often shows up first in these other asset classes like the stock markets and whatnot.

Stuart Englert: But we see it in grocery prices now too. We definitely are. And I think that's where really people, most people recognize inflation and that something is wrong. All you have to do is go to the grocery store. I've never seen, I don't know if in my lifetime I've seen grocery prices escalate as much as they have over the last couple of years.

Mike Maharrey: Yeah, no, I haven't. At least in my cognizant time of buying groceries. In fact, yesterday I was at our local Publix and picked up a two liter of RC Cola, and they're on sale two for one, but one two liter bottle is like $3 and 80 some cents. And I remember very vividly within not two long ago, I was paying 99 cents for a two liter of soda like that. So it is crazy. And it makes you realize the fact that the actual pace of price inflation is much higher than the CPI and the official government numbers would have you to believe, which is another way that they kind of suppress and play this propaganda game. They understate the malfeasance that they're creating. You wrote another article not too long ago and noted that this year marks the 50th anniversary of gold legalization. And I bet a lot of people don't even realize that private ownership of gold was illegal for quite a while. Can you give an overview of that anniversary and kind of set that up and what that means?

Stuart Englert: Sure. 50 years, it's been 50 years that Americans have once again been allowed to purchase own buy, sell trade gold. And that was phenomenal. Most, you're right. Most people don't realize that President Roosevelt back in 1933 decreed gold illegal to own, which is amazing to me. That's crazy because it's the only money that's mentioned in the constitution, gold and silver. And yet that tells you how far the United States has gone away from the constitution right there. When gold was deemed its possession was deemed illegal and it was demonetized domestically. And that, think about it, the international gold standard in 1971, but the domestic gold standard ended much earlier than that back in the 1930s. The American public is far removed, if you will, from gold as money. But again, I'll repeat it. The central banks around the world that are accumulating mass quantities of gold, they're in the know. They know that gold has fundamental monetary value

Mike Maharrey: Over the last three years. The central banks have officially added over 1000 tons of gold each of the past three years. That's

Mike Maharrey: And if you put that into some perspective, it was averaging around 450 to 500 tons. So it's doubled over that last three year period. And it's interesting to note as well, which banks are doing this. You're looking primarily in emerging markets, banks, India, China, a lot of Eastern European banks are adding gold. So interestingly, it seems to be a lot of the countries that may have a vested interest in not being quite so exposed to the dollar.

And I think it's interesting because you mentioned the fact that it was Roosevelt who demonetized and made gold illegal in a domestic sense. And then we had Nixon who closed the final gold window and made it kind of a, took us off the international gold standard. And both of those times it was in response to massive expansion of government and government spending. We had the New Deal and then the Great Depression and then World War ii. So you've got Roosevelt, he needs more money. We need to borrow and spend more. The Nixon you've got coming on the heels of Johnson's, what was the great society? I get all of the great things that government has done for us. Next up, and then of course you had the Vietnam War. So again, you see this at our expense, at the expense of sound money. You see government benefit.

Stuart Englert: There's a direct parallel between war and government debt and deficits. I mean, I've been researching this the last couple years working on another book.

And it's just phenomenal to see the parallels whenever kingdoms governments get into problems financially, they go to war or they go to war and then get further into financial problems because they're borrowing to try and expand their empires or their regimes, their power, their wealth, and yet increases the indebtedness for the public. And we've become enslaved by it.

Mike Maharrey: Yeah, I think Madison warned that it was, I don't think that, I know Madison warned that war was the fruit of the erosion of every other liberty because it is the mother of taxes. And from there it goes. So really appreciate your insights on these subjects, and I'm sure that this is maybe wetted folks' appetite to read your book. So if you can let folks know where they can find your book and then where they can follow the other work that you're doing.

Stuart Englert: Sure. Well, Mike, it's been good joining you Actually Money Metals in your bookstore. You have copies of my book. It's also available on Amazon as an e-book or paperback. And then I started a Substack late last year, and that's where I wrote the gold legalization story that your organization published. And people can go there. It's at Stewart Angler Substack, and I've only written three articles thus far, and I don't write a lot. I've been more of a book researcher and writer. But when my research reveals something that I think is pertinent where I can tie the past to the President, I like to write these articles to inform people because I think the best way to look forward into the future and potential events in the future is to look back and see what's happened in the past. I think it was Mark Twain that said, history doesn't often repeat, but it often rhymes. Often rhymes.

Mike Maharrey: Yeah. I love that quote. Tease your next book for me.

Stuart Englert: Oh, well, it's Debt Bondage and Financial Servitude. And I've been working on this thing for four or five years. I've read parts of over 500 books, but it talks about how debt becomes, how debt enslaves us, but it's all tied to the monetary system, you understand? And these fiat currencies and these financial scams that we get attracted to. And because we live beyond our means, just like our governments. So it's a very interesting topic, and I hope to come out with the book someday, probably about two thirds finished with it at this point.

Mike Maharrey: Outstanding! Well, that's a great topic. I talk about the national debt all the time, and most people just look at me cross-eyed, like it's no big deal. And I say this all the time, things are perfectly sustainable until they're not. You can kick can down the road, but eventually you run out of road. And I think the debt bubbles that we see, not only with government debt, but consumer debt, corporate debt, eventually that has to catch up. And so I'm glad that you're digging into that. Well, I hope folks will check it out. I hope folks will get your book and really appreciate your insights and would love to have you back again sometime.

Stuart Englert: Well, thanks so much, Mike. Good speaking with you. And all the best in your future endeavors there at Money Medals.

Mike Maharrey: Thank you so much.