The Return To A Gold Standard

On August 15, 1971, US President Richard Nixon addressed the nation in a broadcast that would change the world forever. On that day, he announced the abandonment of the Gold standard. This unplugged the US Dollar from Gold and it became a free-floating currency ever since.

The Gold standard refers to a monetary system in which a country's currency or money supply is directly linked to a specific amount of Gold. This also meant that holders of US Dollars can redeem their cash for Gold whenever they wanted.

The Gold standard provided stability to the currency and often helped control inflation and maintain confidence in the monetary system. However, it also had limitations, and countries eventually moved away from this system due to various economic constraints and the desire for more flexible monetary policies.

The world was slowly moving away from a Gold standard. The first major blow came in the 1930s during the great depression. Then, 1971 was the final blow that took us off of it completely.

This was one of the factors that lead to the inflationary 70s. The financialization of the world economy began. Global central banks had nothing to keep them in check anymore. They can just print infinite amounts of money out of thin air whenever they want.

This has resulted in exactly that. Since that day in 1971, money started to grow on trees.

Fast forward to today, the world economy is at a turning point. Global debt levels are at unprecedented levels. Inflation is at a 40-year high. Interest rates are at their highest point in decades. And it’s only getting worse.

The global geopolitical landscape is also experiencing major shifts since the start of the Ukraine-Russia war. We are now witnessing two major alliances clash on the world stage.

The first one, which has dominated the last century, is the Western world. This is the US and friends. Countries that are part of NATO.

The second alliance is new to the scene. Dubbed the BRICS nations, which stand for Brazil, Russia, India, China and South Africa, these countries have come together in recent years to form a union that can rival the “US and friends” alliance.

These countries all have one thing in common. They are tired of US supremacy and want to push back against the current world order.

Since the Ukraine-Russia war began, this alliance has become even stronger. They have started to move away from the Dollar by brokering deals in other currencies. They even want to set up their own global institutions that can rival the IMF, World Bank and other entities.

The BRICS nations also have another thing in common. They have all been buying Gold in the last decade at a ferocious rate. One can only wonder why?

They understand that they have to unseat the US dollar as the world reserve currency to accomplish their goals and not be vulnerable to sanctions but the West. But they also know that none of their currencies have the power of being the next world reserve currency.

They have another idea in mind.

The BRICS nations have a meeting in Johannesburg later this month where they will discuss various financial, economic and political developments.

One major item on the agenda is a new Gold-backed trade settlement currency to replace the Dollar as the trade medium. If this is true, it represents the most serious challenge to the Dollars’ status as a world reserve currency in a while.

This will be the biggest shakeup in the global financial arena in more than a decade. Countries around the world are taking the initiative to carve their own path in a world where everyone follows the lead of the United States.

Does this mean that we are on the cusp of returning to a Gold standard?

That is not certain. But what is certain is that the current world order is being questioned and challenged by major players all across the globe. The state of global affairs is about to get interesting over the next couple of years.

A major event is due in the fall of this year and this BRICS meeting might light the flame. Something big is going to happen by the end of this year. 2024 is poised to be a massive year in the geopolitical world and things might start kicking into high gear by this fall.

It might be climate change related. It might be war-related. It might have to do with the rise of global tensions coming off the back of the Ukraine-Russia war. Or it might be financially involved since rising interest rates have been putting immense pressure on the global economy.

Whatever it is, just be ready for a major escalation on the global stage in the coming year. The current world order as we know it is about to unravel over the next decade.